The laws of Vietnam are complex and new legislation is constantly being introduced. What follows is no more than an introductory overview that we hope will assist investors to decide which areas of law they will need to research further.

This summary is, necessarily, selective and is no substitute for detailed legal advice.

1. This term is used broadly to equate with "privatisation". The concept was new to Vietnam when it was introduced in 1990.

2. Decision No 202/CT was passed in 19)2 and began the experimental process. It was followed by an "Instruction" from the Prime Minister (No 84-TTG) dated 4 March, 1993. Decision No 202/CT was accompanied by Decision No 203/CT. Together, they set out the types of enterprise intended for equitization and the initial enterprises selected.

3. The concept was that the equitization would be effected in the following ways:-

- selling shares to the staff of the enterprise;
- selling shares to domestic, social and economic organisations;
- selling shares to Vietnamese individuals.

4. The shares were to be sold by the company itself or a bank. Once the enterprise was selected and equitized, it would operate under the Company Law, which governs domestic Vietnamese companies.

5. Perhaps the best known of the equitizations was that of Legamex, a garment enterprise, where shares valued in excess of Dong ten billion (approximately US$ 900,000.00) were issued. Later, the equitization of Legamex was halted by the Ministry Finance on the basis, apparently, that irregularities had been discovered.

6. So far we have been able to ascertain, 5 enterprises have completed the process of equitization and are now believed to be profitable. About another 20 enterprise hive apparently, completed the formalities for equitization. The State must retain at least thirty percent of the shares after equitization.

7. A Decision of the Prime Minister on 20 June, 1995 established a Government Department to take responsibility for the establishment of a stock market in Vietnam. Under the Decision, the duties of the Department are to:-

- prepare legislation for the establishment of a stock market;
- to train staff to manage a stock market;
- to co-operate with "international organisations" in organising a stock market in Vietnam.

The Department heads are the Vice Minister of Finance, the Deputy Governor of the State Bank, the Vice Minister of Justice and the Vice Chairman of the State Planning Committee.

The development of a stock market in Vietnam is in its very early stages. Its intended relationship to the programme of equitization has not been made clear.

NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

If you would like further advice please contact: David Ellis, Johnson Stokes & Master, 16th Floor, Princes Building, 10 Chater Road, Hong Kong; Tel 2843 4226; Fax no. : 2845 9121. Alternatively do a text search "Johnson Stokes and Master" and "Business Monitor".