Checklist for Private Placement of Shares

Checklist for private placement of shares: conditions, procedures and easy-to-miss points

A private placement is the fundraising channel many joint-stock companies choose when they want to raise capital quickly from a defined group of investors, without the complex public-offering procedure. The price of that "speed" is strict legal conditions on who may buy, transfer lock-ups, and the duty to register with the State Securities Commission (SSC).

This article is an 8-item private placement of shares Vietnam checklist for the registration dossier under the Law on Securities 2019 and Decree 155/2020/ND-CP, plus the mistakes that most often trigger requests for amendment and supplementation.

Table of Contents

1. What a private placement is — vs. a public offering
2. Offering conditions
3. The 8-item SSC registration dossier checklist
4. Procedure
5. Mistakes that most often trigger amendment requests
6. Transfer restrictions and consequences of breach
7. When a private placement turns the company public
8. FAQ
9. When to work with a lawyer
10. References

1. What a private placement is — vs. a public offering

Under the Law on Securities 2019, a private placement of shares means offering to fewer than 100 investors, excluding professional securities investors. That is the core distinction from a public offering (offered to 100 or more investors, or to unidentified investors).

Scope of this article: the SSC registration procedure below applies to public companies placing shares privately under the Law on Securities 2019. Non-public joint-stock companies proceed mainly under the Law on Enterprises 2020.

The consequence of being "private": SSC registration is lighter, no full prospectus publication as in a public offering — but privately placed shares carry transfer lock-ups: minimum 03 years for strategic investors and minimum 01 year for professional securities investors, from the offering's completion date. Private-placement buyers must accept this low liquidity — it is the price of buying on preferential terms.

2. Offering conditions

A company wishing to privately place shares must meet the conditions of the Law on Securities 2019, including:

• an offering plan approved by the General Meeting of Shareholders (GMS) — covering investors, quantity, offering price, use of proceeds;
• financial conditions, no accumulated losses as prescribed (unless otherwise provided);
• a plan for using the proceeds;
• compliance with foreign ownership ratio rules (if foreign investors participate).

Special note on strategic investors: the law allows the company to select strategic investors against criteria set by the GMS; strategic investors typically buy at preferential prices but bear the longest lock-up (03 years) and may commit to supporting the company in governance, technology and markets.

3. The 8-item SSC registration dossier checklist

Item 1 — Private placement registration form

The statutory form signed by the legal representative, stating company information, share type, quantity, offering price, target investors, expected timeline. Why it matters: this is the "opening" document for SSC acceptance; the information declared must match the offering plan and the GMS resolution exactly.

Item 2 — GMS resolution approving the offering plan

The resolution must clearly state: number of shares offered, offering price (or pricing principles), target investors (list of strategic investors, selection criteria), use of proceeds, and the plan for unsold shares. Common trap: resolutions approving in general terms and "authorizing the Board to decide everything" without the core contents — the SSC will require a re-meeting.

Item 3 — Detailed offering plan

An explanatory document: basis for pricing, dilution analysis for existing shareholders, detailed use-of-proceeds plan per item, strategic-investor commitments (if any). Why it matters: the SSC assesses the offering's reasonableness through this document; an abnormally low offering price without justification draws scrutiny.

Item 4 — Financial statements

The latest audited annual financial statements (and reviewed semi-annual statements if the filing date is far from the annual audit). Why it matters: proving the company meets the financial conditions for the offering; the FS figures are the SSC's reference for cross-checking the use-of-proceeds plan.

Item 5 — Documents on participating investors

The list of expected investors, documents proving professional-securities-investor status (where applicable) and strategic-investor dossiers (financial capacity, experience, support commitments). Note: correctly identifying professional-securities-investor status determines the "fewer than 100 investors" count — getting this wrong can turn a private placement into an unlawful public offering.

Item 6 — Approvals of competent authorities (if any)

Applies where the company operates in a specially regulated sector (banking, insurance, securities…) or where foreign investors participate and foreign ownership ratio conditions or share-purchase approvals under the Law on Investment must be satisfied.

Item 7 — Commitments of related organizations and individuals

The company's commitment to the dossier's truthfulness, strategic investors' commitments on holding periods and company support, and non-breach of transfer lock-ups.

Item 8 — Other documents as required by the SSC

During appraisal the SSC may request supplementary explanations. Prepare internal documents in advance (Board meeting minutes, valuation materials, in-principle agreements with investors) for quick responses.

4. Procedure

1. Internal preparation: the Board builds the offering plan → convenes the GMS → approves the resolution;
2. File the registration dossier with the SSC (01 set);
3. SSC appraisal of completeness and validity; may request amendments/supplements;
4. SSC issues written approval — only from this point may the company proceed with the placement;
5. Execute the placement within the permitted period; report the offering results;
6. Register the charter-capital change with the business registration authority after completion; observe the transfer lock-ups on the placed shares.

5. Mistakes that most often trigger amendment requests

• GMS resolution missing core contents, with blanket authorization to the Board;
• Misidentifying professional-securities-investor status, exceeding the 100-investor threshold;
• Offering price without valuation basis, excessive dilution of existing shareholders without explanation;
• Generic use-of-proceeds plan ("supplementing working capital") without item details;
• Foreign investors involved but foreign ownership ratio conditions unresolved;
• Filing when the audited FS is already "stale" against update requirements.

6. Transfer restrictions and consequences of breach

Privately placed shares cannot be freely transferred right away. The lock-up runs from the closing date of the offering:

• Strategic investors: minimum 3 years;
• Professional securities investors: minimum 1 year.

Exceptions (transfers among professional investors, court/arbitration awards, inheritance) remain subject to sector regulations. The company must track restricted shareholders and refuse to register transfers that breach the lock-up.

Breaching the restriction can render the transfer void and trigger administrative penalties. In practice, disputes often arise when a strategic investor wants an early exit — the cleaner path is usually renegotiation with the company (e.g., a share buyback if the charter allows and the Enterprise Law conditions are met) rather than an off-book transfer.

7. When a private placement turns the company public

A successful private placement can push the company over the public-company thresholds (contributed charter capital of VND 30 billion or more, with at least 10% of voting shares held by at least 100 non-major shareholders, under the Securities Law 2019). The company must then file for public-company registration with the SSC within the statutory deadline and start complying with disclosure and public-company governance duties — a compliance "jump" many companies are unprepared for. Tip: assess the likelihood of becoming public when designing the offering plan, and prepare disclosure machinery and internal audit in advance.

FAQ

Q: How does a private placement differ from a public offering?

A: A private placement is offered to fewer than 100 investors (excluding professional securities investors), with simpler SSC registration than a public offering — but the shares carry transfer lock-ups: minimum 3 years for strategic investors and 1 year for professional securities investors from completion of the offering.

Q: Can a public company do a private placement?

A: Yes. A public company privately places shares under the Law on Securities 2019 and must register with the State Securities Commission. A non-public joint-stock company places shares under the Law on Enterprises 2020 — no SSC registration — but must follow the Enterprise Law's share-offering rules (general meeting approval, pre-emptive offer to existing shareholders in certain cases). Note: if the placement pushes the company over the public-company thresholds, it must register as a public company with the SSC.

Q: Can foreign investors buy privately placed shares?

A: Yes, subject to the maximum foreign ownership ratio under market-access conditions for foreign investors and the foreign ownership rules on the securities market.

Q: Where is the dossier filed and how long does it take?

A: Filed with the State Securities Commission. The SSC reviews the dossier for completeness and validity and issues a written approval; only after approval may the company proceed with the placement. Processing time follows securities law.

Q: Must the placement price equal par value?

A: No. The general meeting sets the price based on valuation (usually referencing the market price for listed/registered companies, or an independent valuation). But an unreasonably low price may draw complaints from existing shareholders about dilution and SSC questions during review — the plan should clearly explain the valuation basis.

Q: What should foreign investors watch when buying privately placed shares?

A: Beyond the offering conditions, foreign investors must respect the company's foreign ownership cap (foreign room) — especially in conditional market-access sectors. If the purchase would breach the cap, the deal cannot close. Confirm remaining foreign room with the custodian securities company before committing.

When to work with a lawyer

Work with a lawyer when: building the offering plan and drafting the GMS resolution; identifying professional-securities-investor and strategic-investor status; foreign investors participate; or the dossier has already drawn repeated SSC amendment requests. FLAT Law Firm accompanies companies through capital raisings — hotline 0988424851.

References

• Law on Securities 2019 (No. 54/2019/QH14), effective 01/1/2021.
• Decree 155/2020/ND-CP dated 31/12/2020 detailing the Law on Securities, effective 01/1/2021.
• Cross-checked via the Official Gazette and thuvienphapluat.vn at the time of writing (28/9/2026).

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