Can individuals contribute capital to establish an insurance enterprise? in Vietnam

Which entities do not have the right to contribute capital to establish an insurance enterprise in Vietnam according to current regulations? How much money must an individual contribute capital to establish an insurance business in the form of a limited liability company?

1. Which subjects do not have the right to contribute capital to establish an insurance enterprise in Vietnam according to regulations?

Any entity that does not have the right to contribute capital to establish an insurance enterprise in Vietnam shall be based on Article 64 of the Law on Insurance Business 2022 as follows:

General conditions for licensing the establishment and operation of insurance enterprises and reinsurance enterprises

1. Conditions for shareholders and members contributing capital to establish:

a) Organizations and individuals have the right to establish and manage enterprises in Vietnam according to the provisions of the Enterprise Law;

b) The organization has legal status and is operating legally; In case of contributing 10% or more of charter capital, the business must be profitable for the last 3 consecutive financial years up to the time of submitting the application for license and meet the financial conditions according to the Government’s regulations;

c) Insurance enterprises and reinsurance enterprises that have been licensed to establish and operate in Vietnam must contribute capital to establish a new insurance enterprise or reinsurance enterprise and must have been profitable for the last 3 consecutive financial years up to the time of submitting the application for license and meet the capital adequacy ratio as prescribed by this Law.

2. Capital conditions:

a) charter capital is contributed in Vietnam Dong and is not lower than the minimum level as prescribed by the Government;

b) Shareholders and founding members are not allowed to use loan capital or investment trust capital from other organizations or individuals to contribute capital.

3. Personnel conditions: have a Chairman of the Board of Directors or Chairman of the Board of Members, Director or General Director, legal representative, Actuarial expert expected to meet the conditions and standards of management capacity, experience and professional expertise specified in Article 81 of this Law.

4. Have an organizational form according to the provisions of this Law and have a draft charter consistent with the provisions of the Enterprise Law.

Subjects that do not meet the general conditions to be granted a license to establish and operate an insurance enterprise cited above do not have the right to contribute capital to establish an insurance enterprise in Vietnam.

In addition, depending on the case of an insurance enterprise established in the form of a limited liability company or a joint stock company, it must also meet the conditions specified in Articles 65 and 66 of the Law on Insurance Business 2022.

2. What is the minimum amount of money an individual contributing capital to establish an insurance business in the form of a limited liability company must contribute?

Pursuant to Article 65 Law of KiInsurance business 2022 as follows:

Conditions for members contributing capital to establish an insurance enterprise or reinsurance enterprise in the form of a limited liability company

Members contributing capital to establish an insurance enterprise or reinsurance enterprise in the form of a limited liability company must be an organization that meets the general conditions specified in Article 64 of this Law and the following conditions:

Accordingly, members contributing capital to establish an insurance enterprise in the form of a limited liability company must be an organization that meets the prescribed conditions.

Therefore, individuals cannot contribute capital to establish an insurance business in the form of a limited liability company.

3. What does an application file for a license to establish and operate an insurance enterprise include?

Dossier to request a license to establish and operate an insurance enterprise includes:

– Document requesting issuance of establishment and operation license;

– Draft charter for insurance enterprises;

– Operational plan for the first 05 years, clearly stating the insurance operations expected to be implemented, risk management model, method of setting up professional reserves, reinsurance program, capital investment, solvency of the insurance enterprise;

– Resume, criminal record card, copies of diplomas and certificates proving capacity, professional qualifications and operations of the person expected to be appointed as Chairman of the Board of Directors or Chairman of the Board of Members, Director or General Director, legal representative, Actuarial expert;

– Level of capital contribution and method of capital contribution, list of organizations and individuals who are founders or members, shareholders expected to contribute 10% or more of the charter capital and documents proving the satisfaction of conditions corresponding to each type of insurance enterprise. specified in Articles 64, 65, 66 and 67 of this Law of those organizations and individuals;

– List of beneficial owners of insurance enterprises. The Government regulates criteria for determining beneficial owners of insurance enterprises and reinsurance enterprises.