Conditions for Investment in Non-Life Insurance Business by Foreign Enterprises in Vietnam

Non-life insurance business in Vietnam is increasingly developing, and foreign enterprises view Vietnam as a potential market for the growth of this industry. So, what legal conditions do foreign enterprises need to meet to invest in Vietnam? The following information will assist businesses in the process of application, understanding, and obtaining a business license in Vietnam.

1. Legal Basis:

• Insurance Business Law 2022

• Decree 80/2019/NĐ-CP

2. Conditions for Foreign Non-Life Insurance Enterprises:

For organizations and individuals participating in capital contribution:

• They must not fall under the restricted categories specified in Clause 2, Article 18 of the Enterprise Law.

• Organizations and individuals contributing capital must contribute in cash and cannot use borrowed funds or investment funds from other organizations or individuals.

• Organizations contributing 10% or more of the charter capital must have been profitable for the three consecutive years prior to the submission of the application for a license and must not have accumulated losses at the time of submission.

• If the contributing organization is an insurance or reinsurance company licensed to operate in Vietnam, it must have been profitable for the last three financial years and meet the capital adequacy ratio requirements as stipulated by law.

For the insurance or insurance brokerage business to be established:

• The charter capital must be in Vietnamese Dong and not be lower than the minimum amount set by the government.

• The business type and company charter (for insurance and insurance brokerage companies) must comply with legal regulations.

• There must be a manager or supervisor for the business or branch being established.

  
  

3. Procedures for Establishing a Foreign-Invested Insurance Business:

Step 1: Prepare Documents:

The documents must include:

• Application for a license as per the form in Annex I of Decree 46/2023/NĐ-CP.

• Draft company charter.

• A 5-year operation plan that aligns with the proposed business field, clearly stating the required contents.

• Personal identification documents of the foreign investor; CV, copies of diplomas, certificates, and other documents proving the qualifications and standards for the proposed company manager.

• List of capital contributors for a limited liability company (LLC); shareholder documents for a joint-stock company (JSC).

• Bank confirmation of the paid-up charter capital deposited in a blocked account at a bank in Vietnam.

• Documentation from the competent state authority confirming that the Vietnamese organization has met financial safety conditions and is permitted to contribute capital to the establishment of an insurance company as per the specialized legal regulations.

• Power of attorney (if any).

Step 2: Submit Documents:

Submit documents to the Ministry of Finance.

Step 3: Reception and Resolution:

The Ministry of Finance will notify in writing if additional documents or modifications are required within 30 days from the receipt of the application.

Within 60 days from receiving a complete and valid application, the Ministry of Finance will issue the business license. If the application is denied, the Ministry of Finance will provide a written explanation of the reasons.