Vietnamese law firm YKVN and its international counterpart Latham and Watkins They helped automaker VinFast with its merger and NASDAQ listing.
VinFast is a subsidiary of the Vietnamese Vingroup. Its listing on the Nasdaq Stock Exchange in August came through a merger with special purpose acquisition company Blackspeed.
After VinFast, Vietnamese internet company VNG has filed for an IPO in the United States. Vietnamese retailer The CrownX, e-commerce platform Tiki and Bamboo Airways have expressed similar plans. However, achieving this is not easy.
In 2021, Vietnam-based loyalty and analytics platform Society Pass makes its debut on Nasdaq. Hanoi-based construction company Cafico did the same in 2008, only to be dropped from the list three years later.
“The current regulatory framework (in Vietnam) is not yet fully equipped to facilitate the direct listing of a Vietnam-registered company on an offshore exchange,” said Trung Nhat Quang, managing partner of Ho Chi Minh City-based YKVN. Asian Business Law Journal.
“There are many logistical challenges, including the need to address issues such as the possibility of substituting locally owned shares for those held abroad, as well as mechanisms for distributing dividends to external shareholders.”
Truong said a formal agreement between the Vietnamese stock exchange and its overseas counterparts such as Nasdaq was required to enable dual listings on the two stock exchanges.
“Hence, local companies seeking to list their Vietnamese businesses are exploring alternative paths,” Trung said. “One such viable alternative is the listing of the offshore entity that owns the Vietnamese business,[which was]the approach that VinFast took recently by listing on the Nasdaq.”
The reorganization of VinFast Vietnam to establish VinFast Auto as an offshore holding entity in Singapore was a pioneering initiative. The complex process involved a series of strict Vietnamese regulatory procedures and approvals, including an overseas investment permit from the Ministry of Planning and Investment.
“These approvals were necessary to enable Vingroup and Vietnam Investment Group, the controlling shareholders of VinFast Vietnam, to set up the offshore listing entity, VinFast Auto, in Singapore, with the ability to own 99.9% in VinFast Vietnam,” Truong said.
Following the IPO process, VinFast will be subject to ongoing compliance in jurisdictions, such as Singapore or the United States, where the company is listed. The automaker has imported about 2,100 electric vehicles into the United States.
Truong led a team based in Ho Chi Minh City that included partner Nguyen Van Hai and attorney Ho Anh Tuyet. Meanwhile, Singapore-based Latham Partners Sharon Lau and Stacey Wong, and Tokyo Partner Noah Karr, led their firm team with the help of Singapore-based colleagues Elizabeth Ong, Serada Chayapongonglerd, Isha Joel, Jivi Katyo, and Huang Peijun.
The Vietnamese auto industry is expected to continue its growth trajectory this year, with an expected compound annual growth rate of 25% between 2020 and 2025.
“The industry has traditionally been dominated by foreign automakers; However, local brands such as VinFast are gaining significant market share thanks to government support and investment in research and development.
The Vietnamese government has approved some preferential tax policies including exemption from special taxes and reduction of electric vehicles, as well as waiver of registration fee for three years. Manufacturers of electric or renewable energy vehicles, vehicles with low fuel consumption, or vehicles with low or no emissions will benefit from a corporate income tax of 10%, down from the standard of 20%, plus exemptions from land lease fees for 19 years. . years.