Listing Offshore: A way to prove Vietnam companies worthy to invest

Sometimes I have found some companies are very attractive to invest thanks to (1) favorable business conditions; (2) enforced competitive advantages and (3) attractive prices. The sadness is they lack of international standard regard corporate governance.

For some, they haven’t had independent board member(s). Some have made use of loopholes regard low standards in corporate governance in Vietnam business practice.

I do believe to protect investors from mistreatments – fair evaluation, there are many things needed to do to improve the current status quo. Among of them are:

(1) Improvements on corporate governance practice.

(2) Firms need to be transparent regard their corporate governance. One of the way to prove they protect their shareholders is they must aim high standards when it comes to listing. If they are good/superb, why don’t they self-require to be listed on international bourses to raise international fund and compete on regional/international markets?

In the long run, it is a must to listing offshore, because when you aim big, you reach high and prove you are not parasitic on the opaque business environments in Vietnam. Waiting on the reform of Vietnam financial markets, including capital market is not enough to prove themselves. Sail the wind and go abroad to catch up the opportunities, even it’s more competitive and harsher!

Below is my accidential reading on this topic: LISTING OFFSHORE. I found it very persuading me to investigate more on this topic later.

Hope you enjoy it!

Listing offshore: why don’t Vietnamese companies seek greener pastures?

When Vingroup announced its plan to list on Singapore’s Stock Exchange (SGX) in 2014, it was considered that such a listing would pave the way for local companies to quickly follow suit; especially, as Vietnam could benefit from foreign demand. Since then, like many other Vietnamese aspirants before it, Vingroup’s offshore IPO launch was put off. Still, why hasn’t there been a homegrown Vietnamese company listed on a foreign bourse yet?

In general, Vietnamese companies would require between two to three years to prepare for an overseas listing. This is largely due to differences between international and Vietnamese accounting standards and the high standards required for corporate governance and internal controls in overseas stock exchanges. Nevertheless, it is expected that many companies will be listed on foreign stock exchanges in the future, as more and more Vietnamese companies look to raise capital through a different channel. As part of an important, long-term strategy for a Vietnamese company, timing would be key, as well as readiness; rather than merely economic conditions and external factors. An overseas listing would enhance a Vietnamese company’s image both domestically and internationally.

While in an economic crisis, the value of the business might not be as high as management expects. On the other hand, the chances for successfully listing in overseas markets might be higher, as, practically speaking, an overseas exchange, professional advisers and relevant parties will be conscientiously making more efforts in the listing process.

Despite tough economic times, overseas listings continue to take place in the Asian region, such as on SGX and Hong Kong Stock Exchange (HKEx).

There have been several companies in Vietnam that have successfully listed on overseas stock exchanges. Vedan International has been listed on HKEx since 2003; Vietnam Manufacturing and Export Processing has been listed since 2007 and Luks Group (Vietnam Holdings) since 1987. Other companies which have significant operations in Vietnam – such as PXP Vietnam Asset Management, Vietnam Holdings, VinaCapital, Vietnam Property Fund and XP Power – are listed on the London Stock Exchange. However, these companies were mainly owned by foreign shareholders prior to their IPOs.

Thus, it is arguable that there are no grassroots Vietnamese companies listed overseas. There are several reasons why many difficulties are encountered, including: (i) commercial reasons (price is not right, poor cost-benefit ratios); (ii) legal framework; and (iii) compliance with overseas stock exchange rules.

Commercial reasons

Benefits. A successful overseas listing would provide broader access to capital by creating an international market for the company’s shares. It would enhance the company’s profile, align the company to international corporate governance and transparency standards, widen and diversify its shareholder base and increase trading liquidity. Since very few Vietnamese stocks trade overseas, this would play a positive impact on the valuation of the company.

Costs. Maintaining a listing overseas requires the company to incur additional costs and commit resources to ensure the fulfilling of additional and continuous obligations and reporting requirements.

Legal requirements

Decree 58 (dated 20 July 2012), implementing the amended Law on Securities, simplifies the documents and procedures required for a Vietnamese company to register its proposed offshore offering and listing with the State Securities Commission.

For a Vietnamese company to list on an overseas exchange (in addition to the overseas exchange’s own requirements), it must meet the following general conditions for listing offshore: (i) its business does not fall within areas where foreign ownership is prohibited – if there is a restriction on foreign ownership for a certain shareholding percentage, such percentage must be complied with; and (ii) a resolution on listing overseas must have been adopted by its board of directors or general shareholders’ meeting, pursuant to its charter.

A potential Vietnamese issuer, in which the State has a controlling interest, or which is regulated by a specific authority, such as the State Bank of Vietnam, may need additional approval for its proposed overseas listing and also for its post-listing obligations on the overseas exchange, as well as any proposed changes in its organisational or management structure in connection with the overseas listing.


A Vietnamese company looking to list overseas would have to comply with the overseas exchange’s rules, as required from time to time. Usually, this would mean the disclosure of information which materially affects the company’s share price, and including internal company information, such as the appointment of officers, acquisition of assets, winding up or judicial proceedings.

Practical considerations

The main practical issues which face Vietnamese companies seeking to list overseas, include: (i) the application of international accounting standards (IFRS) in preparing financial statements – almost all Vietnamese companies use Vietnamese Accounting Standards (VAS) to prepare their financial statements and there are significant differences between the two standards; (ii) overseas exchanges require a high level of corporate governance and strong internal controls – the company may be required to implement additional corporate governance measures acceptable to the overseas exchange, e.g., to safeguard shareholders’ interests, the resolution of conflicts of interest and internal control mechanisms to ensure related party transactions will be carried out at an arm’s length basis and on normal commercial terms, and most Vietnamese companies are not ready for this; and (iii) lack of resources to ensure regulatory compliance with rules and regulations after listing on the overseas stock exchange.


To conclude, Vietnamese companies should weigh the costs and benefits of listing overseas according to their plans and goals. While many Vietnamese companies would clearly meet the financial requirements to list on an overseas exchange, this is only one of many requirements. A Vietnamese company would need time to prepare the valuation, strategy, select the listing venue, financial reporting, risk management, historical track record, legal and financial due diligence, and corporate governance.

Furthermore, an interested company would need the assistance of professional advisers to conduct an overseas readiness assessment before incurring time and resources to embark on their listing journey.

Is there a Vietnamese company ready to step up for the challenge?

Kent Wong is a partner and Head of Banking & Capital Markets at VCI Legal. He can be contacted by email:

© Financier Worldwide


P/S: Regard the topic Corporate Governance in Vietnam, some wonderful sources I have read so far I’m pleased to share with you as belows:

Corporate Governance in Vietnam_1Corporate Governance in Vietnam_2Corporate Governance in Vietnam_3

Those above images is from this document: Corporate Governance Practice in Vietnam_Article

Another helpful ones:

  1. Corporate Governance_OECD
  2. G20-OECD+CG+Principles_English-Vietnamese+by+IFC
  3. Three big questions searching for independent board member(s):

Especially the practice presented by IFC with the cooperation with G20 & OECD is one of the succinct useful practical material to me.

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