Tiếng Việt
中文Yes, a reinsurance company may be organized as a limited liability company. The forms of organization of a reinsurance company are provided in Article 62 of the Law on Insurance Business 2022:
“Forms of organization of insurance enterprises and reinsurance enterprises
1. Joint-stock company.
2. Limited liability company.”Related services
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Accordingly, a reinsurance company may be organized as a limited liability company.
1. May capital-contributing members use borrowed capital to establish the company?
No. Under Article 64 of the Law on Insurance Business 2022:
“General conditions for granting establishment and operation licenses to insurance enterprises and reinsurance enterprises
1. Conditions on founding shareholders and capital-contributing members:
a) Organizations and individuals entitled to establish and manage enterprises in Vietnam under the Law on Enterprises;
b) Organizations having legal person status and operating lawfully; where participating with 10% or more of the charter capital, they must have been profitable in the 03 consecutive most recent fiscal years up to the time of filing the license application and meet the financial conditions prescribed by the Government;
c) Insurance enterprises and reinsurance enterprises licensed to be established and operate in Vietnam that contribute capital to establish a new insurance or reinsurance enterprise must have been profitable in the 03 consecutive most recent fiscal years up to the time of filing the license application and meet the capital adequacy ratio prescribed by this Law.
2. Conditions on capital:
a) Charter capital contributed in Vietnamese Dong and not below the minimum level prescribed by the Government;
b) Founding shareholders and capital-contributing members may not use borrowed capital or investment-entrusted capital of other organizations or individuals to participate in capital contribution.
3. Conditions on personnel: having a Chairman of the Board of Directors or Chairman of the Members’ Council, Director or General Director, legal representative, and proposed actuary meeting the conditions and standards of management competence, experience, and professional expertise prescribed in Article 81 of this Law.
4. Having a form of organization as prescribed by this Law and a draft charter consistent with the Law on Enterprises.”
Under this provision, capital-contributing members of a reinsurance company may not use borrowed capital to participate in capital contribution for establishing the company.
2. Must capital-contributing members of a reinsurance company be organizations?
For a reinsurance company in the form of a limited liability company, Article 65 of the Law on Insurance Business 2022 provides:
“Conditions for capital-contributing members establishing insurance enterprises and reinsurance enterprises in the form of limited liability companies
Capital-contributing members establishing insurance enterprises and reinsurance enterprises in the form of limited liability companies must be organizations, meeting the general conditions in Article 64 of this Law and the following conditions:
1. Conditions for organizations established under foreign law:
a) Being a foreign insurance enterprise, reinsurance enterprise, financial group, or insurer;
b) Being certified by the foreign competent authority as not having seriously violated insurance business laws of the country where its head office is located during the 03 consecutive most recent years up to the time of filing the license application;
c) The line of business proposed for licensing in Vietnam is a line that the foreign insurance enterprise, reinsurance enterprise, financial group, or insurer is directly conducting or has a subsidiary conducting for at least the 07 consecutive most recent years;
d) Having total assets of not less than USD 2 billion in the year immediately preceding the year of filing the application for the establishment and operation license;
dd) Committing to support the insurance enterprise or reinsurance enterprise proposed to be established in Vietnam in finance, technology, corporate governance, risk management, administration, and operations; ensuring that such enterprise complies with the rules on financial safety and risk management under this Law;
e) A foreign insurance enterprise, reinsurance enterprise, financial group, or insurer meeting the conditions in Points b, c, d, and dd of this Clause may authorize a subsidiary specializing in outbound investment to establish an insurance or reinsurance enterprise in Vietnam. Such subsidiary must meet the conditions in Point d of this Clause;
2. Conditions for economic organizations established under Vietnamese law: having total assets of not less than VND 2,000 billion in the year immediately preceding the year of filing the license application;
3. Based on Point d, Clause 1 and Clause 2 of this Article, the Government prescribes the specific minimum total asset levels suitable for each period.”
Accordingly, capital-contributing members establishing a reinsurance company in the form of a limited liability company must be organizations, and must meet the general conditions in Article 64 and the conditions in Article 65 of the Law on Insurance Business.
Notes on applying current legal provisions
This article belongs to the Enterprise & M&A Knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions.
Legal provisions may change depending on timing, locality, dossier type, and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, please contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.
Common risks to note
- Applying legal documents that have been amended, supplemented, or replaced.
- Preparing incomplete dossiers, documents, or evidence.
- Misunderstanding the applicable conditions, procedures, time limits, or competent authority.
- Signing, filing, or conducting transactions without fully assessing legal risks.
How can ANT Legal help?
ANT Legal assists in reviewing specific situations, checking dossiers, identifying the applicable legal basis, advising on handling plans, and representing you in working with individuals, organizations, or competent authorities when necessary.
For quick advice, you may contact a lawyer at 0966.475.966.
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