The State Bank of Vietnam issued Circular No. 23/2024/TT-NHNN amending some articles of Circular No. 10/2016/TT-NHNN on guidelines of some Decree No. 135/2015/NĐ-CP regulations on outward indirect investment. This Circular takes effect on 12 August 2023 with the following notable points:

Expanding Vietnamese corporates who can implement the share-award program to entities that have relationships with foreign entities through ownership of shares, contributed capital, or other forms. 

Share awards are limited to share awards or other share wards that do not generate cash flow abroad. Accordingly, the stock option has been removed. This amendment is deemed a strict management of indirect investment from individual investors, which have been restricted under Decree 134/2015/ND-CP

Approval for the share-award program by the State Bank of Vietnam has been removed to reduce the administrative procedure. Consequently, the commercial bank where the Vietnamese corporate opens the account for implementing the program will take responsibility to verify the supporting documents. 

In addition, the Vietnamese corporates who implement the share-award program must monthly report to the State Bank of Vietnam on its share-award program, i.e., they must report total foreign currency received from dividends and other legal income related to the outward share-award program and submit with the bank confirmation.

These regulatory changes represent a significant step towards reducing administrative procedures in line with the government's recent strategies. Moreover, they aim to encourage share-award programs for employees while ensuring that no foreign currency flows out of Vietnam.

Dentons LuatViet acknowledges and thanks trainee Khanh Hoang for her contribution to the article.