An initial public offering of shares, commonly called an IPO, is the moment a joint stock company first raises capital from the investing public and enters the discipline of a public company. The framework is Securities Law 54/2019/QH14, used in this article in the consolidated form after Law 56/2024/QH15, together with guiding Decree 155/2020/ND-CP on dossiers and the prospectus. This article covers only first public offerings of shares; public offerings of bonds and private placements of shares are separate angles outside its scope.
IPO conditions in Article 15 of the Securities Law
Article 15 of Securities Law 54/2019/QH14 (consolidated form) sets the core conditions for a joint stock company making a first public offering of shares: contributed charter capital at the time of offering registration of VND 30 billion or more by book value; profitable business operations in the two consecutive years preceding the registration year with no accumulated losses up to the registration year; an issuance plan and a plan for using the proceeds approved by the general meeting of shareholders; and a commitment to bring the shares into listing or registration for trading on the securities trading system after the offering ends.
One ownership-structure condition to read carefully in the current consolidated text is the requirement on the ratio of voting shares held by the remaining shareholders after the offering, tied to the offering reaching a minimum dispersion scale to the public. Clause 2 of Article 15 of the Securities Law provides the conditions for additional public offerings of shares for subsequent offerings; an enterprise that is already a public company does not re-apply the first-offering conditions in Clause 1 of Article 15 for an additional offering, and conversely a first-time IPO enterprise may not borrow the lighter conditions of Clause 2 of Article 15. Article 16 of this Law is the provision on registration of public securities offerings with the State Securities Commission, not a provision setting additional-offering conditions. The VND 30 billion capital threshold in this article is the IPO condition threshold in Article 15, not the threshold for a private placement or for listing.
Registration dossier and the role of the State Securities Commission
The dossier to register a public offering of shares is filed with the State Securities Commission and comprises the central document groups: the offering registration form, the prospectus, the company charter, the decision of the general meeting of shareholders approving the issuance plan and the capital use plan, audited financial statements of the relevant years, and the prescribed commitments, within the detailed framework of Decree 155/2020/ND-CP. The prospectus is the document carrying the highest legal responsibility of the offering: false or misleading information in the prospectus triggers liability of the issuer and of the organisations and individuals signing confirmations.
The State Securities Commission issues the certificate of registration of the public securities offering when the dossier meets the conditions. This certificate is the condition for the offering to proceed on the announced schedule; offering without a certificate or offering contrary to the registered contents is a violation handled in the securities field. The enterprise should count both the dossier completion time and the time the regulator requests amendments and supplements into its capital raising plan, rather than only the nominal review period.
After the IPO: listing, trading registration and disclosure
The end of the offering does not end the obligations. Under the registered commitment, the enterprise must complete bringing the shares into listing or registration for trading on the securities trading system within the statutory period after the offering ends. Delay in performing this commitment is an independent violation, separate from whether the offering succeeded.
From the moment it becomes a public company, the enterprise enters the periodic and extraordinary information disclosure regime of securities law: periodic financial statements, disclosure of extraordinary events within the short prescribed periods, and corporate governance under the framework for public and listed companies. Post-IPO compliance cost is a permanent cost, and an enterprise preparing an IPO should bring this duty into the capital raising decision from the start, rather than treating the IPO as the final destination.
Frequently Asked Questions
What conditions must an enterprise meet to make an initial public offering (IPO) of shares?
Under Article 15 of Securities Law 54/2019/QH14 (consolidated form after Law 56/2024/QH15), a joint stock company making a first public offering of shares must have: contributed charter capital at registration of VND 30 billion or more by book value; profitable operations in the two consecutive years before the registration year with no accumulated losses up to the registration year; an issuance plan and a proceeds use plan approved by the general meeting of shareholders; a commitment to bring the shares into listing or trading registration after the offering; and satisfaction of the requirement on the ratio of voting shares held by the remaining shareholders after the offering under the current consolidated text.
What documents must the public offering registration dossier contain, and which authority issues the registration certificate?
The registration dossier comprises the offering registration form, the prospectus, the company charter, the decision of the general meeting of shareholders approving the issuance plan and the capital use plan, audited financial statements of the relevant years, and the prescribed commitments, within the framework of Decree 155/2020/ND-CP. The authority issuing the certificate of registration of the public securities offering is the State Securities Commission. The prospectus is the central document of the dossier and the main basis of legal responsibility for the offering.
After an IPO, what listing and information disclosure obligations must the enterprise fulfil?
After an IPO, the enterprise must complete the listing or trading registration of the shares on the securities trading system under its registered commitment and within the statutory period. At the same time, as a public company, the enterprise must perform periodic information disclosure (financial statements and governance information) and extraordinary disclosure when an event subject to disclosure arises within the short periods under securities law, together with the corporate governance regime for public companies.
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