On 28 June 2024, the State Bank of Vietnam (“SBV”) has promulgated Circular No. 23/2024/TT-NHNN (“Circular 23”)1 to amend and supplement several articles of Circular No. 10/2016/TT-NHNN dated 29 June 2016 (“Circular 10”) regulating offshore indirect investment. Circular 23 shall take effect as from 12 August 2024 and has stipulated noteworthy changes with respect to the offshore stock award plans for Vietnamese employees in Vietnam. Key highlights are captured as follows:
- Extension of eligible organizations involved in an offshore stock award plan in Vietnam
a. A foreign organization adopting an offshore stock award plan
Under Circular 10, a foreign organization adopting the offshore stock award plan is defined as “the organization established under the law of a foreign country and having presence in Vietnam”. This leads to a practical understanding that the [offshore] issuing organizations only comprise of those who fully owns/invests in a Vietnamese subsidiary and, to a certain extent, narrows down the scope of eligible issuing organization. The Circular 23 has clarified and extended such definition by removing the sentence “having commercial presence in Vietnam” to give a broader and full understanding on an eligible issuing organization. Given such, a foreign organization adopting the offshore stock award plan is defined under the Circular 23 as “the organization established under the law of a foreign country”.
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* MY Hong Tu Tieu (LL.B) is an Associate of TND Legal.(Please find here)
1 https://vbpl.vn/TW/Pages/vbpq-toanvan.aspx?ItemID=168113&Keyword=23/2024/TT-NHNN (accessed on 30 July 2024).