What Criminal Violations in Stock Exchange in Vietnam?

Along with the increasingly diversified securities activities, the criminal violations in the stock market are also becoming more and more sophisticated and complex. The securities lawyer in Vietnam is sharing some opinions on the practice of criminal violations in stock exchange in Vietnam to avoid.

Although in Vietnam, violations and crimes committed in the securities sector still account for a small percentage compared to other fields, but these white collar crimes have directly negatively affected trading activities in the market, in particular eroding investors’ confidence, and causing the stock market distortion.

The criminal violations in the stock market could hinder the efficient functioning of the stock market which is a component of a free-market economy, where enterprises raise funds and investors invest and trade. Vietnam is a developing economy and it is getting more serious on prosecuting this crime due to the large scale negative impacts to the financial market.

There are four violations in the securities sector that are defined as crimes, which are: Provision of false information or concealment of information in securities activities; Use of internal information for trading securities; Manipulation of securities market and Forging documents in offering or listing profile as follows:

Provide false information

The law in Vietnam charges person who deliberately provides false information or conceals information in the activities of offering, listing, trading securities, market organization, registration, depositing, clearing or paying for securities. The fine for such activities will be from VND 100,000,000 to VND 2,000,000,000 or up to 02 years’ community sentence or 03 months – 5 years’ imprisonment. Punishments incurred by a corporate legal entity that commits the offenses shall be fined from VND 500,000,000 to VND 5,000,000,000; be banned from operating in certain fields or raising capital for 01 – 03 years.

How insider trading in Vietnam is treated?

Insider trading is also considered a crime in Vietnam but its seriousness has not been emphasized strongly enough as compared with other countries with developed financial market.

Over the 20 years since the stock market in Vietnam has been established, insider traders have not been found or charged yet although the law states that any person who has information about a public company or public fund which has not been published and could remarkably affect securities price of that public company or public fund but and uses such information to deal in securities or discloses it or provides it for another person for trading securities shall be liable to a fine from VND 500,000,000 to VND 2,000,000,000 or face a penalty of 07 months – 03 years’ imprisonment. Punishments incurred by a corporate legal entity that commits the offenses shall be fined from VND 1,000,000,000 to VND 10,000,000,000.

For some reasons, in Vietnam, it has been disputed that there are challenges to prove the crime in the stock market that make the practice of investigating and charging insider trading crime difficult.

Manipulation of stock market in Vietnam

Manipulation of stock market could be in the forms of fraudsters using one or more security accounts linked to each others, to set buy or sell orders in significant volume that create unusual and fake supply and demand, to lure other small investors in great quantity to make buy and sell decisions and the fraudster later benefit by exiting their shares at high price.

Or the fraudster could use pump and dump scheme to manipulate the stock market by spreading misleading information that create a buying frenzy of the stocks to “pump” prices and later “dump” their shares at inflated price.

The the fine for the individual committing the crime is ranging from VND 500,000,000 to VND 4,000,000,000 or a penalty of 06 months – 07 years’ imprisonment; the penalty for the legal entity committing the crime is a fine ranging from VND 2,000,000,000 to VND 10,000,000,000; can be permanently shut down or be banned from operating in certain fields or raising capital for 01 – 03 years depending on the severity of the violation. Recently these criminal activities have been most popular in Vietnam and a number or cases have been prosecuted.

Forging documents

Forging documents in offering or listing profile criminal is a stock market crime in Vietnam. The law states that any person who forges documents of the offering or listing profile shall be liable to a fine of from VND 500,000,000 to VND 2,000,000,000 or face a penalty of 06 months – 07 years’ imprisonment. In addition, the offender might also be liable to a fine of from VND 50,000,000 to VND 250,000,000, be prohibited from holding certain positions because of such criminal record in Vietnam or doing certain works in related fields for 01 – 05 years.

Securities lawyer in Vietnam to distinguish signs of criminal behaviour or administrative violations

There are also disputes among law makers, legal experts and lawyers in Vietnam on whether there are criminal violations or not; or wherether there are administrative violations, or economic or civil violations for acts that could have signs of criminal behaviours. These kinds of arguments are important to help the society to find balance and defend justice in the development of economy and stabilization of the financial market in Vietnam.

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How to Make a Joint Will of Husband and Wife under Vietnam Laws?

How a will lawyer in Vietnam could help?

Under Vietnam culture, marriage is a special relationship that is not considered as a contract. Hence it could become a delicate matter when material comes into play. And talking about death while still living might trigger emotional reaction especially the concerning matters could arise is how to make a will for the assets owned by husband and wife.

We have come across such situations and as a will lawyer in Vietnam, we could help the potential client to understand the need to have a will and have the estate planning. But to get a will and statement service in Vietnam for a joint will or separate will could also be a question. The following will discuss the matter in details.

In fact, a few spouses desire to make joint will to dispose of their common assets. The prevailing law does not yet stipulate joint testament of husband and wife. Hence how to proceed with the application of law for the cases where husband and wife intend to make joint testament?

Legal grounds for joint will and statement in Vietnam

In the legal document system, the “joint testament of husband and wife” was most recently stipulated in the Civil Code 2005, which has now been superseded by the Civil Code 2015. Accordingly, it can be understood that: a joint testament of husband and wife is an expression of the will of the spouses intending to transfer the common assets of the spouses to another person after the death of both husband and wife. With regard to joint testament of husband and wife, the Civil Code 2005 devotes three articles stipulating particulars of this type of testament including concept; amendment, supplementation, replacement, cancellation; legal effect.

Under the abovementioned understanding, after the Civil Code 2005 expires, among prevailing legal documents, especially the Civil Code 2015 directly regulating inheritance and testament by its sphere, there is no provision on “joint testament of husband and wife”. Thus, the joint testament of husband and wife is not recognized but also not prohibited by the law.

Therefore, it is possible to apply the law for cases where spouses intend to make “joint testament of husband and wife by the understanding of the Civil Code 2005” after the Civil Code 2005 is no longer valid as follows:

Joint testament of husband and wife as a type of testament

According to the basic principles of civil law, individuals shall establish, perform and terminate their civil rights and obligations on the basis of free, voluntary undertaking, agreement; any undertaking or agreement which does not violate a prohibition of law or is not contrary to social morals shall be binding on the parties and be respected by other subjects; the establishment, performance and termination of civil rights and obligations may not infringe upon national or ethnic interest, public interest, or legitimate rights and interest of other people.

Accordingly, husband and wife are completely free to agree on the making of a testament that expresses the joint will of both husband and wife towards common assets but must comply with the law on testament.

As such, to be protected as a legitimate testament and as a legitimate testament under Civil Code 2015, apart from general regulations on testament, the joint will of husband and wife shall comply with following regulations:

Firstly, to be a legitimate testament:

First, common will shall first be a testament as provided by law, which is for the purpose of transferring the common assets of husband and wife to other people after the death of both husband and wife.

Second, the testament shall satisfy the criteria of legitimate testament, including: i) the testator was of sound mind when he/she made the testament; and he/she was not deceived, threatened or coerced; ii) the contents of the testament do not contravene the prohibition of law or contrary to social morals; the testament shall be made in writing, it may be made orally if it is unable to be made in writing.

The testament of the incapacitated or the illiterate shall be made in writing notarized or certified by a witness. A written testament which is not notarized or certified shall be deemed lawful only if the testator is of sound mind when he/she made the testament; and he/she was not deceived, threatened, coerced; contents of the testament does not breach the prohibition of law, not contrary to social morals; formality of the testament complies with the law.

An oral testament shall be deemed lawful only if the testator orally expressed his or her last wishes before at least two witnesses who recorded those wishes in writing and signed or fingerprinted the document immediately after the testator orally expressed his or her last wishes. Such testament must be certified by a notary public officer or an authorized agency, verifying signatures or fingerprints of the witnesses within five working days of the of expressing the last wishes.

Secondly, to amend, supplement, supersede, cancel:

Testators may amend, supplement, supersede or cancel the testament at any time, as a result, spouses may amend, supplement, supersede, cancel the made testament at any time upon mutual agreement.

Thirdly, the time of effectiveness:

The testament shall come into effect as of opening the inheritance. On the other hand, the time of opening the inheritance shall be the time when the testator dies. Therefore, the time of effectiveness of the joint testament shall be from when both husband and wife die.

Joint testament of husband and wife as a conditional contract.

Also based on the free, voluntary undertaking, agreement of civil law subjects, husband and wife have right to make a civil contract agreeing on the disposal of common assets that may occurring rights and obligations of the third person; meanwhile, defining the specified event where both husband and wife die as the time of commence of the contract and it is not obliged for the contract to be implemented by spouses themself. As such, to be protected and as protected as a civil contract, the joint testament of husband of wife shall comply with civil contract law.

Firstly, to be the conditional contract as provided by law:

As a civil contract, the joint testament of husband and wife shall be the agreement between husband and wife on occurrence, modification, or termination of rights, obligations to the common assets of husband and wife.

Hereunder rights and obligations may occur to the third person, must not be performed by husband and wife themselves. Not an ordinary civil contract, the joint testament of husband and wife is a conditional contract under whereby the performance depends on the occurrence, modification, or termination of a certain event. Thus, in this contract, husband and wife will agree on the time of division of the common assets.

Secondly, to amend, supplement, supersede, terminate, cancel:

As provided by contract law, husband and wife may negotiate to amend, supplement the joint testament. Spouses may also agree on replacing the made joint testament by a new joint testament after terminating the made joint testament or completely terminating the joint testament in accordance with regulations on contract termination. The notable point of cancelation, termination of the joint testament as a contract is the fact that husband and wife may unilaterally cancel, terminate in accordance with law.

Thirdly, the time of effectiveness:

Not as a testament, stated contract may take effect as of the time of entering contract or the time upon mutually agreed, nevertheless, the effectiveness of the contract is inherently not critical as the establishment, change, and termination of common assets.

For that reason, it is understood that the contract shall take effect from the time as mutually agreed by both husband and wife, otherwise as the time of entering contract. Despite that, apart from the effectiveness of the contract, spouses must also concur on the time of division of the common assets. It is noteworthy that for the purpose of division of the bequests, the abovementioned time shall not fall in the time when it is stated to divide the common assets of husband and wife during the marriage period as prescribed by law on marriage and family.

Application of law to resolve matters relating husband and wife joint testament

Not provided by law, in cases where spouses desire to make joint testament but it is neither applicable for by abovementioned provisions nor agreed upon by the parties, customs can be applied but the customs must not contravene the basic principles of civil law.

If practices are unavailable, provisions of the law governing analogous civil relations shall be applied. Where analogous law cannot be applied, the basic principles of civil law, case law or equity shall be applied.

In short, because the law leaves open joint testaments of husband and wife, thus, husband and wife who have the will to execute a joint testament shall freely agree in the form of a testament or conditional contract according to the corresponding provisions. For related issues that are not reached with an agreement, customary practices, analogy of law, basic principles of civil law, case law, and equity shall be sequentially applied to resolve. The individuals are recommended to consult with a will lawyer in Vietnam to help with will and statement service in Vietnam under Vietnam laws.

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How to Obtain Business Registration Certificate in Vietnam?

How to Obtain Business Registration Certificate in Vietnam?

Every organization and individual wishing to set up a foreign owned company in Vietnam shall need to meet some specifics conditions as promulgated under the Law on Investment and Law on Enterprise. In specific areas being considered as conditional investment, the investor shall also need to consult with the law governing the area of investment. Once the investment registration certificate is completed, the investor has the obligation to apply for enterprise registration.

The procedure to register for a certificate of enterprise registration of a joint stock company or limited liability with two or more members are herein mentioned:

Dossiers:

i) Application form for enterprise registration

ii) The company’s charter.

iii) A list of founding shareholders and shareholders being foreign investors/ a list of capital contribution members.

iv) Valid copies of:

Copies of the ID card or other ID papers of founding shareholders and foreign investors/members being individuals; list of authorized representatives of foreign shareholders being organizations.

Decision on establishment, certificate of business registration, or an equivalent document of the organization and the letter of authorization; the ID card or other ID papers of the authorized representatives of founding shareholders and foreign investors being organizations.

If shareholders are foreign organizations, the copy of the certificate of business registration or an equivalent document must be notarized, legalized and authenticated.

The Certificate of Investment registration of the foreign investors as prescribed by the Law on Investment.

State Authority: Business registration office of the province where the enterprise’s headquarters is situated.

Period: within 03 working days from the full receipt of the dossiers

Result: Business registration office shall issue the certificate of enterprise registration or if the application is not satisfactory, business registration office shall inform the applicant of necessary revisions and supplementation to company.

In general, Vietnam government encourages foreign direct investment. If the investor faces challenges at state authority, whom do not issue notification or request of supplementation to the application for enterprise registration, the investor cold lodge a complaint as prescribed by regulations of law on complaints and denunciation to the state authority to protect its right in doing business and investment in Vietnam. A law firm in Vietnam with expertise in both business registration and dispute resolution could assist the investor in the process.

The enterprise is entitled to do business from the issuance date of the certificate of enterprise registration. For conditional business lines, enterprises are entitled to engage in conditional business lines if they satisfy all conditions and are capable to maintain fulfillment of such conditions throughout their operation.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.




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