Effective from 7 November 2018, Decree No. 1511 makes certain amendments to the business conditions under Decree No. 732 for the establishment of insurance companies and operation of insurance agents. The amendments aim to reduce administrative burdens and facilitate investment in the insurance business sector in Vietnam.

Specific amendments under Decree No. 151

a. Removal of “no accumulated loss” requirement for offshore insurers

Under Decree No. 151, the Ministry of Finance (MOF) has simplified the requirements applicable to offshore organizational shareholders and investors being individuals who intend to establish an insurance company in Vietnam. In particular, Decree No. 151 removes the requirement of “having no accumulated loss up to the date of application for an Establishment and Operation License" for offshore organizational investors and shareholders to invest in local insurance companies in Vietnam.

Given that the above requirement applies to both organizational investors establishing a new insurance company in Vietnam, and also to organizational investors conducting M&A transactions in an existing operating insurance company in Vietnam (e.g., acquiring or subscribing to shares, or purchasing the charter capital in a local insurer), this can be interpreted to mean that an offshore investor will no longer be required to prove that it has not accumulated losses at the time of submitting an application for an Establishment and Operation License to the MOF.

b. Removal of certain requirements imposed onto institutional shareholders in an insurance joint stock company

Under the previous Decree No. 73, within a period of 3 years from the establishment of an insurance joint stock company, the founding shareholders are required to together hold at least 50% of the total number of common shares that are authorized for offer for sale of such joint stock insurance company. Decree No. 151 now removes this requirement for insurance joint stock companies in Vietnam.

However, under Decree No. 151 it remains that a Vietnam-based insurance joint stock company must have at least two institutional shareholders, and that such shareholders must together own at least 20% of the total number of shares of such insurance joint stock company. On this point, by revising "at least two founding institutional shareholders" to "at least two institutional shareholders" (i.e., removing the word "founding"), Decree No. 151 appears to clarify that this requirement applies not only to the founding shareholders at the point of establishment of the local insurance joint stock company, but also covers potential new shareholders following M&A transactions. Essentially, this would mean that an insurance joint stock company must, at all times, from the date of founding, have at least two (2) institutional investors who must together own at least 20% of the total number of shares in such joint stock company.

This requirement only applies to local insurers in the form of a joint stock company, and is not imposed onto limited liability companies

c. Removal of Conditions applicable to Onshore Investors (including domestic and foreign invested companies)

Under Decree No. 73, a onshore investor wishing to establish or invest in an insurance company must operate in either the financial, banking or insurance sector. Decree No. 151 removes this condition from the list of conditions applicable to onshore organizational investors, including foreign invested companies licensed to operate an insurance company in Vietnam, thereby opening up investment opportunities from investors operating in other business sectors as a result.

d. Removal of many requirements on level of experience of insurance agents selling certain insurance products

For insurance agents selling (i) unit-linked insurance, (ii) universal life insurance, or (iii) pension insurance products, Decree No. 151 removes the majority of professional requirements that insurance agents must satisfy under Decree No. 73.

In particular, requirements on having certain previous professional experience have been abolished; insurance agents only need to satisfy the condition of having been trained, and having obtained a certificate of completion of the training courses on the relevant insurance product in order to qualify to sell such insurance product.

e. Reduction of the number of years of operation and extent of experience applicable to foreign investors

Decree No. 151 reduces the number of years of experience an offshore investor must satisfy for the relevant insurance sector. Specifically, the number of years of experience an offshore / foreign investor must have had in the relevant insurance sector has been reduced to 7 years, instead of 10 years as provided in the previous Decree No. 73.


1 Decree No. 151/2018/ND-CP dated 7 November 2018 of the Government providing amendments and supplementation to a number of decrees on conditional business under the management of the Ministry of Finance (“Decree No. 151”).
2 Decree No. 73/2016/ND-CP dated 01 July 2016 of the Government providing detailed regulations on the implementation of Law on Insurance Business and amended Law on Insurance Business ("Decree No. 73").

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