VietNamNet Bridge - Analysts predicted that businesses would rush to open their doors widely to welcome foreign investors once the government raises the ceiling to 100 percent. However, this has not happened.


Contrary to all predictions, there have been not many reports about businesses’ plans to lift the foreign ownership ratio ceiling in this shareholders’ meeting season. 

Analysts noted that a large number of businesses do not belong to the 267 conditional business fields, and therefore, have full rights to decide whether to offer larger room in their enterprises to foreign investors. 

Some companies just need to amend their operation regulations to be able to give more room to foreign investors.

According to the HCMC Securities Company (HSC), the time needed to amend the regulations is a couple of weeks. 

However, many companies were still hesitating to make a decision.

There are two reasons behind their hesitance, according to HSC. First, some companies still have large room for foreign investors, i.e. the volume of shares being held by foreign investors still has not hit the currently set ceiling. 

Second, there are legal issues.

Analysts predicted that businesses would rush to open their doors widely to welcome foreign investors once the government raises the ceiling to 100 percent. However, this has not happened.

MWG and HCM, for example, may fear they would meet limitations in operation once they become foreign-owned companies.

Meanwhile, STK fears it may have to expose more information when becoming a foreign-owned company.

HSC said it was understandable why few companies want to raise the foreign ownership ratio to 100 percent, even though the Decree 60 which took effect last September, allows this. 

It is still necessary to issue some more legal documents to guide the implementation of the new policy. Businesses would still be hesitant until the legal framework is perfectly clear. 

According to HSC, businesses can expect the changes in the definition about ‘foreign invested enterprises’. 

The State Securities Commission (SSC) has recently mentioned the possibility of raising the foreign ownership ratio threshold from 51 percent to 65 percent to identity whether businesses are foreign owned. If this becomes legal, expected in this year, this would help businesses offer larger room to foreign investors.

However, it is still unclear if other ministries agree with the SSC’s viewpoint.

In fact, there are many reasons why only a few of businesses have decided to offer more room to foreign investors. 

Hoa Sen Group in mid-2014 decided to raise the foreign ownership ratio to 60 percent. However, no further move has been taken so far. 

A source said that Le Phuoc Vu, president of Hoa Sen, has changed his intention and his plan has been canceled. 


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