Vietnam: private placement locks and the six-month gap

A conversion price referenced to future market prices is not usable by a Vietnam-listed company. Article 31 of the Law on Securities 2019 restricts transfer of privately placed shares and convertible bonds for one year, three years for a strategic investor, and requires at least six months between placements. What is available instead is a rights issue or a public offering.

Key takeaways

• Two tranches a year is the ceiling. The interval between two private placements of shares, convertible bonds or warrant-linked bonds must be at least 6 months from the closing date of the previous one.
• Then the stock is immobilised. One year for a professional securities investor, three for a nhà đầu tư chiến lược or strategic investor, from the end of the tranche.
• Pricing is not the problem. The general meeting resolution must state the number of shares and either the offering price or the principles for determining it, so a formula is expressly contemplated.
• The one exit is private. Transfer between professional securities investors is permitted inside the restricted period, as are transfers under a court judgment, an arbitral decision or by inheritance. Selling into the order book is not.
• Foreign funds got a promotion in 2025. Under Law No. 56/2024/QH15, in force from 1 January 2025, foreign investors are treated as professional securities investors without a financial test, which puts them on the one-year clock rather than the three-year one.

The arithmetic that closes the door

Take the two rules together and the structure disappears without anyone having to prohibit it. A chào bán riêng lẻ, a private offering, may be launched no sooner than 6 months after the last one closed, and whatever is issued cannot be transferred into the market for at least a year. A provider drawing down monthly against a moving VWAP would need a dozen offerings a year and a liquid exit after each; Vietnam permits two offerings and no exit at all for twelve months.

That is a different closure from the pricing-formula markets. India and China compute a minimum price a refixing strike cannot meet. Vietnam lets the parties agree the price, then removes the liquidity the price was discounting. It is nearer to Taiwan, where privately placed securities are frozen outright.

Article 31, and what the meeting has to decide

Private placement by a public company sits in Article 31 of the Law on Securities No. 54/2019/QH14, in force since 1 January 2021 and implemented by Decree 155/2020/ND-CP. The eligible subscribers are strategic investors and professional securities investors, nobody else. The general meeting approves the issuance plan and the plan for using the proceeds, and the resolution specifies the number of shares and the offering price or the principles for determining it. The offering is then registered with the State Securities Commission, the UBCKNN. That is a regime built for a named investor taking a considered stake after a shareholder debate, and it does not pretend otherwise.

One year, three years, and the one way out

The restriction attaches to privately placed shares, trái phiếu chuyển đổi or convertible bonds, and warrant-linked bonds equally, so moving the economics into a hybrid does not shorten the clock. A strategic investor is one the general meeting has selected for its financial and technical capacity and which has committed to a lock-up of at least three years, so that classification is chosen rather than imposed. The permitted transfers inside the restricted period are to another professional securities investor, under a court judgment or arbitral decision, or on inheritance. A fund can sell its position to another fund. It cannot sell the shares.

Room ngoại, and the account the money moves through

A second gate applies to a foreign subscriber. Every public company has a permitted foreign ownership ratio, known in the market as room ngoại, and where the room is full the shares cannot be acquired whatever the issuer has agreed. Foreign portfolio money also moves through an indirect investment capital account, which is where repatriation is administered. Neither point closes the market alone; both add time to a structure that has already run out of it.

What Vietnam does support

Vietnam raises equity capital successfully, through rights issues to existing shareholders, public offerings, and negotiated strategic stakes taken by banks and industrial partners who intend to hold for years. An issuer looking for the instrument described elsewhere on this site should read how equity facilities work and convertible notes for listed issuers, and, if the group also has a United States listing, what actually makes shares free trading there.

Related markets and reading

• All markets
• Indonesia
• Who we fund

Primary sources

• State Securities Commission of Vietnam

Orientation

Commentary, press and unofficial texts: useful for orientation, never the citation of record.

• Guidance on the implementation of the Law on Securities 2019 and Decree 155/2020
• Vietnam's amended Securities Law, Law No. 56/2024/QH15

Financing a Vietnamese listed issuer: frequently asked questions

Can a Vietnamese public company issue a convertible bond with a floating conversion price?

Pricing is not the obstacle. The general meeting resolution has to specify the number of shares and either the offering price or the principles for determining it, so a formula is contemplated. The obstacle is what happens next: privately placed convertible bonds and the shares they produce are transfer-restricted for at least a year, and no further placement may be launched for six months. A price that floats has nothing to float against.

How long are privately placed shares restricted in Vietnam?

At least one year for a professional securities investor and at least three years for a strategic investor, running from the day the offering tranche ends. The restriction covers privately placed shares, convertible bonds and warrant-linked bonds alike, so structuring around it by using a convertible instead of stock does not help.

Can an investor sell anything during the restricted period?

Only to another professional securities investor, or under an effective court judgment, an arbitral decision, or by inheritance. That carve-out lets a fund transfer a position privately; it does not let anyone sell into the market. For a capital provider whose exit is the order book, the difference is the whole transaction.

Is a drawdown facility possible for a Vietnamese listed company?

No. Successive private placements must be at least six months apart, measured from the end of the previous one, and each needs its own general meeting resolution and its own registration with the State Securities Commission. At best that is two tranches a year, each of them registered in advance and locked afterwards, which is not a facility in any usable sense.