With the introduction of Decree 162/2024/ND-CP, the regulatory framework for obtaining credit fund licenses has been updated to ensure transparency and stability in the financial sector.
Introduction
Obtaining a credit fund license in Vietnam requires careful attention to regulatory requirements and thorough preparation. This comprehensive guide will walk investors through the requirements for securing a credit fund license under the latest regulations.
Prerequisites for Investors
Financial Requirements (Article 10 Decree 162/2024/ND-CP, Article 10 Circular 29/2024/TT-NHNN)
- The member’s capital contribution includes the capital contribution that establishes membership status and supplementary capital contributions:
- The minimum capital contribution that establishes membership status is 300,000 VND and is stipulated in the Charter;
- The supplementary capital contribution is carried out according to the provisions in the Charter.
- The total maximum capital contribution of a member in a People’s Credit Fund shall not exceed 10% of the charter capital of the People’s Credit Fund or a lower ratio as specified in the Charter.
- Proof of financial stability and sustainable funding sources
- Clear documentation of investment capital origin
Legal Status Requirements (Article 10 Decree 162/2024/ND-CP, Article 8 Circular 29/2024/TT-NHNN)
- Valid business registration in the home country
- Clean legal record and compliance history
- Proper corporate governance structure
Specifically:
- Individuals: Vietnamese citizens aged 18 and above, residing or temporarily residing within the area of operation of the credit fund, who have no criminal record and whose legal capacity is not restricted.
- Households: Members must reside within the area of operation of the fund, share assets for production and business purposes, and designate a legal representative to exercise their rights and obligations.
- Legal Entities: Must be a legally operating organization (excluding social funds and charitable funds) with a headquarters located within the area of operation of the credit fund, with a legal representative or authorized person participating.
Step-by-Step Application Process
1. Initial Assessment and Preparation
Begin by thoroughly assessing your organization’s eligibility and gathering necessary resources. This includes:
- Legally:
● Establish a preparatory committee responsible for drafting the establishment project, the Fund’s charter, and other necessary documents.
● Draft the establishment project.
● Draft the Fund’s charter.
● Meet the conditions for founding members. - Financially:
● Minimum charter capital.
● Raise capital contributions from at least 30 members. - Personnel: Select managers, operators, and members of the supervisory board.
- Location: Choose the location for the headquarters.
2. Document Compilation
Prepare the following essential documentation:
- The Charter of the People’s Credit Fund
- Minutes of the meeting of the founding congress of the People’s Credit Fund.
- The resolution of the founding congress on the approval of the Charter, the election of the Chairman and other members of the Board of Directors, the Head of the Supervisory Board, and other members
- The decision of the Board of Directors of the People’s Credit Fund on the appointment of the Director of the People’s Credit Fund
- Documents proving the ownership or legal right to use the location of the head office.
For details on Required Documentation, refer to this Article: Complete Guide to Credit Fund Licensing Requirements in Vietnam 2024
3. Submission Procedure
Submit your application package to the relevant Vietnamese authorities, ensuring:
- Required fees are paid: 200.000 VND
- Submission follows official channels: Apply directly to the State Bank of Vietnam branch in the province or city, or send it via postal service.
- The application review period is 180 days from the date of receiving the complete and valid application.
4. Review Process
During this phase:
- Check the validity, completeness, and accuracy of the application.
- Assess the legal, financial, and personnel capacity of the Fund.
- Request additional information (if needed).
- Evaluate the establishment proposal and the Fund’s business plan.
Compliance Requirements
Ongoing Obligations
Once licensed, credit funds must maintain:
- Compliance with the Charter: Operate in accordance with the content specified in the approved Charter of the Fund.
- Reporting: Fulfill regular and ad-hoc reporting obligations to the State Bank of Vietnam regarding the Fund’s operations and finances.
- Inspection and supervision: Subject to inspection and supervision by the State Bank of Vietnam and other competent authorities.
- Legal compliance: Fully comply with the legal provisions related to banking operations, cooperatives, and other relevant laws.
Capital Maintenance
Ensure ongoing compliance with:
- Minimum charter capital: Always ensure that the minimum charter capital equals the statutory capital required by the government at the time of applying for the license.
- Safety ratios in banking operations: Comply with the safety ratios for banking operations as prescribed by the State Bank of Vietnam.
- Financial situation: Maintain a healthy financial condition, profitable operations, and ensure liquidity.
Common Challenges and Solutions
Typical Obstacles
Investors often face:
- Legal requirements and administrative procedures: Compliance with legal regulations and licensing procedures can be complex, requiring a deep understanding of government regulations.
- Capital requirements and member mobilization: Ensuring sufficient minimum charter capital and recruiting enough members can be challenging, especially for new funds.
- Financial management and compliance with standards: The fund must maintain financial stability, comply with financial safety requirements, and submit regular reports to the regulatory authorities.
Solutions and Best Practices
To overcome these challenges:
- Hire professional legal advisors to understand regulations clearly and help prepare accurate and complete documentation. Regularly update information on legal changes to avoid mistakes.
- Develop a clear capital mobilization plan from individuals and organizations to ensure the required number of members. Seek strategic partners or potential investors to contribute to the charter capital.
- Implement a professional financial management system, maintaining transparent and accurate financial reports. Strengthen the internal control team to comply with financial safety requirements and report to the State Bank.
Conclusion
Obtaining a credit fund license in Vietnam requires careful planning, thorough preparation, and attention to detail. By following this guide and ensuring compliance with all requirements under Decree 162/2024/ND-CP, investors can navigate the application process more effectively.
For more information about specific requirements or to begin the application process, contact the relevant Vietnamese financial authorities or seek professional legal counsel.
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