A Vietnamese company may only proceed with offshore initial public offering (IPO) procedures in accordance with foreign laws after obtaining approvals from the State Securities Commission of Vietnam (SSC) for overseas listing of shares or depository receipts. This option is subject to conditions and procedures under the securities laws of Vietnam, which primarily include the Law on Securities of 2019 and its guiding Decree No. Dual Listing Dual listing allows a company to be concurrently listed on a Vietnamese stock exchange and on one or more foreign stock exchanges, such as those in Singapore, the U.S. ![]() In general, to list on a foreign stock exchange, a Vietnamese company can consider the options of either (i) dual listing or (ii) restructuring as a subsidiary of an offshore parent who will list overseas. However, the process for overseas listing is costly and time-consuming, and companies would be well advised to gain a basic understanding of the process before deciding to enter foreign stock markets. These overseas listings offer undeniable advantages, such as access to capital at high valuation, the improvement of corporate management and internal control with higher transparency and efficiency, the enhancement of stock liquidity for foreign shareholders, and increased visibility on the global market. In recent years, Vietnamese companies have shown increased interest in listing their shares or depository receipts (where a bank acts as custodian of underlying shares) on foreign stock exchanges. Domestic companies may be subject to a capital gain at the prevailing rate of 20%, and foreign companies may be subject to 15% withholding tax on gains from a sale if payment is made from or in Thailand-though this rate may be reduced or exempted under the relevant Double Tax Agreements.įor more information on Thailand’s security-related tax requirements, or on any aspect of taxation in Thailand, please contact Auaychai Sukawong at. However, Thai and foreign individual investors can still be exempted from personal income tax on capital gains. Securities traders may be subject to other tax implications besides FTT, such as capital gains tax and stamp duty, if a security is traded outside the SET. Exempted persons include registered market makers, the Social Security Office, provident funds, the Government Pension Fund, aid funds under the Private School Act, retirement mutual funds, and the National Savings Fund, among others. The securities subject to FTT include shares (both ordinary and preference), warrants, derivative warrants, exchange traded funds, depositary receipts, mutual fund units, and transferable subscription rights. Under the current draft, the imposition of FTT will be implemented in two phases, with an initial reduced rate as detailed in the table below. Under this arrangement, securities sellers and investors do not have any duty to remit SBT, and sellers have no reporting obligations regarding sale transactions. However, the draft law stipulates that securities brokers are to withhold FTT from the gross share sales income and remit it to the Revenue Department on behalf of the securities seller within the 15th (or 23rd, depending on circumstances) day of the next month through the Revenue Department’s e-filing platform. Generally, securities sellers are the ones liable for FTT. It is an indirect and transactional tax (similar to a sales tax) and is imposed on gross receipts, not on value added at each stage of manufacturing, trading, or service like VAT. ![]() The draft legislation approved by the cabinet in November 2022 aims to repeal the SBT exemption on securities trading on the SET and impose an FTT, which is a kind of SBT imposed on a specific commercial transaction. ![]() The sale of securities on the SET has been exempt from specific business tax (SBT) since December 1991 in an effort to promote trading on the secondary market and boost the domestic economy. If the legislation is ultimately passed, the FTT will be applied to transactions starting in April 2023. The cabinet’s decision, which came on November 29, 2022, sets Thailand on a path to repeal a tax exemption that has been in place for over 30 years. Thailand’s cabinet has approved draft legislation to impose a financial transactions tax (FTT) on securities trading in the Stock Exchange of Thailand (SET).
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