The investment conditions for non-life insurance business for foreign enterprises in Vietnam.

The non-life insurance business in Vietnam is increasingly developing, and foreign investment enterprises view Vietnam as a potential market for the growth of this industry. So, in order to invest in Vietnam, what legal conditions must foreign enterprises meet? The following content will assist businesses in the process of applying for and obtaining a business license in Vietnam.

1. Legal Basis:

   • Insurance Business Law 2022

   • Decree 80/2019/ND-CP

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2. Conditions for foreign non-life insurance enterprises:

For organizations or individuals participating in capital contribution:

• Not falling under the prohibited categories as stipulated in Clause 2, Article 18 of the Enterprise Law.

• Organizations or individuals participating in capital contribution must contribute in cash and cannot use borrowed capital or entrusted investment capital from other organizations or individuals for capital contribution.

• Organizations contributing 10% or more of the charter capital must have been operating profitably for the 3 consecutive years before the submission of the application for the business license and must not have any accumulated losses at the time of submitting the application.

• In the case of an organization participating in capital contribution being an insurance company or reinsurance company already licensed to establish and operate in Vietnam, it must have been profitable for the 3 most recent consecutive financial years before submitting the application and meet the capital safety ratio according to the regulations of this Law.

For the proposed insurance or insurance brokerage company:

• The charter capital must be contributed in Vietnamese Dong and not less than the minimum level as prescribed by the Government.

• The company type and its charter (for insurance companies, insurance brokers) must be in accordance with the law.

• There must be a manager or supervisor for the company and its proposed branch.

3. Procedure for establishing a foreign-invested insurance company:

Step 1: Prepare the application:

The application includes:

• Application for a license in the form prescribed in Annex I of Decree 46/2023/ND-CP.

• Draft company charter.

• A 5-year operational plan aligned with the proposed business area, clearly outlining the content as required.

• Personal documents of the foreign individual(s); resume, copies of diplomas, certificates, and other documents proving compliance with the qualifications and standards for managing the proposed company.

• List of capital contributors for a Limited Liability Company; documents of shareholders for a Joint Stock Company.

• A confirmation from a bank allowed to operate in Vietnam about the charter capital deposited in a blocked account at the bank.

• Documents from the competent state agency confirming that the Vietnamese organization contributing capital meets financial safety conditions and is permitted to contribute capital to establish the insurance company under the relevant laws.

• Power of attorney (if any).

Step 2: Submit the application:

• Submit the application to the Ministry of Finance.

Step 3: Receipt and resolution:

The Ministry of Finance will notify in writing if additional documentation is required within 30 days from the date of receiving the application. If the application is not complete or valid, the Ministry will request corrections.

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