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Establishment of insurance enterprises: Updated registration conditions and procedure

Insurance is one of the conditional businesses. Therefore, what are the registration conditions and procedures for insurance enterprises?

1. Conditions for the establishment of insurance enterprises

Insurance enterprises shall satisfy all the conditions in accordance with Articles 64, 65, 66 of the Law on Insurance Business 2022, Article 11 of Decree No. 46/2023/ND-CP, in particulars:

1.1. Conditions of form of operation

Liability Limited Companies or Joint stock companies

1.2. Conditions on founding shareholders and capital-contributing members

- Organizations and individuals have the right to establish and manage enterprises in Vietnam in accordance with this Law on Enterprises;

- Organizations that have legal status and are lawfully established and operating in Vietnam.

Must operate profitably in the latest 3 consecutive financial years up to the time of submitting the application dossiers for grant of licenses and satisfy the financial conditions prescribed by the Government, in case of contributing 10% or more of the charter capital, as follows:

Any capital-contributing organization that operates in a line of business subject to the legal capital or minimum (charter) capital requirement shall ensure that the shareholders’ equity minus the required minimum (legal/charter) capital is greater than or equal to its estimated capital contribution;
If the capital-contributing organization is established and operated in accordance with the Law on Credit Institutions, the Law on Insurance Business, and the Law on Securities, it must maintain and satisfy the requirements of financial safety and be permitted to contribute capital by a competent authority in accordance with the law. If the applicable law does not require it to obtain written permission from a competent authority, the capital-contributing organization must have a written certification thereof;
If the capital-contributing organization is a foreign insurer/reinsurer or a foreign financial/insurance corporation, it must maintain and satisfy the requirements of financial safety and be permitted to establish an insurer/reinsurer in Vietnam by a competent authority of the country where such organization is headquartered.
If such permission is not required by such country, the organization shall obtain a statutory written confirmation of such non-requirement by a competent authority/organization/person under the law of such country.
It has made financial statements, which must be audited and given unqualified opinions, in 03 consecutive years preceding the year in which the application dossier for the establishment and operation license is submitted.

Insurance enterprises and reinsurance enterprises that have been granted establishment and operation licenses in Vietnam and contribute capital to establish new insurance enterprises, reinsurance enterprises must operate profitably in the latest 3 consecutive financial years up to the time of submitting the application dossiers for grant of licenses and satisfy the capital adequacy ratio as prescribed by this Law.

1.2.1. Conditions for capital-contributing members of liability limited companies

For foreign organizations:

- Being insurance enterprises, reinsurance enterprises, foreign financial or insurance groups;

- Being certified by foreign competent authorities that the insurance enterprises, reinsurance enterprises, foreign financial or insurance groups have not seriously violated the provisions of the law on insurance business of the countries where the enterprises are headquartered within 3 consecutive years up to the time of submitting application dossiers for grant of licenses;

- The proposed field of application for grant of permit to perform in Vietnam is the field in which insurance enterprises, reinsurance enterprises, foreign financial or insurance groups are directly engaged or have subsidiaries to perform for at least the last 7 consecutive years;

- Having the total property of not less than USD 2 billion in the year immediately preceding the year in which application dossiers for grant of establishment and operation licenses are submitted;

- Committing to support in finance, technology, corporate governance, risk management, executive and operations for insurance enterprises and reinsurance enterprises to be established in Vietnam; ensuring that the insurance enterprises and reinsurance enterprises shall comply with regulations on financial safety and risk management in accordance with this Law;

- Insurance enterprises, reinsurance enterprises, and foreign financial or insurance groups meeting the conditions may authorize subsidiaries specializing in offshore investment to establish insurance enterprises or reinsurance enterprises in Vietnam.

Subsidiaries specialized in offshore investment must have a total property of not less than USD 2 billion in the year immediately preceding the year in which application dossiers for grant of establishment and operation licenses are submitted;

For Vietnam organizations:

Having total property not less than VND 2,000 billion in the year immediately preceding the year in which application dossiers for permits are submitted;

1.2.2. Conditions for capital-contributing members of joint stock companies

- There are at least 2 institutional shareholders and each shareholder meets the following conditions:

Contributing 10% or more of the charter capital.
The conditions specified in Article 65 of this Law;

- An individual shareholder may not contribute more than 10% of the charter capital.

1.3. Condition on capital:

- Charter capital in Vietnam dong, may not use borrowed capital or investment trust capital of other organizations or individuals to contribute capital.

- The minimum charter capital of any life insurer:

Providing life insurance (excluding united-linked insurance and pension) and health insurance: VND 750 billion;
Providing the insurance as mentioned at Point a of this Clause, including unit-linked insurance or pension: VND 1,000 billion;
Providing the insurance as mentioned at Point a of this Clause, including both unit-linked insurance and pension: VND 1,300 billion.

- The minimum charter capital of any non-life insurer:

Providing non-life insurance (excluding aviation insurance, satellite insurance) and health insurance: VND 400 billion;
Providing non-life insurance (excluding aviation insurance, satellite insurance) and health insurance: VND 450 billion;
Providing non-life insurance (excluding aviation insurance, satellite insurance) and health insurance: VND 500 billion.

The minimum charter capital of any health insurer: VND 400 billion.

- Insurance enterprises which are established, organized and operated before July 01, 2023 have lower charter capital than market level must supplement charter capital and make a full deposit in accordance with law provisions.

1.4. Condition of human resources

1.4.1. General conditions and criteria

- Have the right to manage enterprises in accordance with the Law on Enterprises;

- Have not been administratively sanctioned in the field of insurance business, have not been disciplined in the form of dismissal due to a violation of internal procedures for 03 consecutive years before the time of appointment; have not been prosecuted by a competent agency as prescribed by law at the time of election or appointment.

1.4.2. Conditions and criteria for Chairpersons of Boards of Directors, Chairpersons of Members’ Councils, members of Boards of Directors, members of Members’ Councils:

- Above general conditions and criteria:

- The incumbent has a university degree or any higher degree.

- Chairpersons of Boards of Directors, Chairpersons of Members’ Councils have directly worked in the field of insurance, finance or banking for at least 5 years or are persons in charge of management, execution, control in an enterprise operating in the field of insurance, finance or banking for at least 3 years; members of Boards of Directors, members of Members’ Councils have directly worked in the field of insurance, finance or banking for at least 3 years or are persons in charge of management, execution, control in an enterprise operating in the field of insurance, finance or banking for at least 3 years.

1.4.3. Conditions and criteria for Director or General Director and at-law representatives:

- Above general conditions and criteria;

- Possess a university or higher degree in insurance business. Those who do not possess such a degree must possess a university or higher degree in another discipline and an insurance certificate granted by an insurance training institution lawfully established and operating in Vietnam or abroad;

- Have at least 5 years of working experience in the field of insurance, finance or banking, including at least 3 years of acting as a manager or controller of an insurance enterprise, reinsurance enterprise or foreign branch.

He/she shall reside in Vietnam during his/her incumbency.

1.4.4. Conditions and criteria for the managers not included in 02 above cases

- Above general conditions and criteria:

- Possess a university or higher degree in insurance business. Those who do not possess such a degree must possess a university or higher degree in another discipline and an insurance certificate suitable for the enterprise’s type of insurance permitted to be provided that is granted by an insurance training institution lawfully established and operating in Vietnam or abroad;

- Have at least 3 years of working experience in the field of insurance, finance, banking or in the professional field where they are expected to work. Particularly for heads of professional divisions, at least 3 years of working experience in the field of insurance or professional field where they are expected to work is required;

He/she shall reside in Vietnam during his/her incumbency.

2. Process and procedure for establishment of insurance enterprises

Pursuant to Article 12, 13 and 16 of the Decree No. 46/20238/ND-CP, the application procedure for the establishment and operation license of a insurance enterprises are as follows:

Step 1: Organizations and individuals proposes the dossiers of application for establishment and operation licenses

* For the liability limited companies

No.	Documents
1	An application for grant of the License made using the form provided in Appendix I to this Decree.
2	The draft charter of the enterprise;
3	A plan on the first 05 years’ operation suitable to the line of business to be licensed, in which the types of insurance to be deployed, target market, distribution channel, technical reserving methodology, reinsurance program, capital investment, business efficiency, solvency, internal control, internal auditing, risk management, information technology of the insurer/reinsurer.
4	A true copy of the citizen identity card/people’s identity card/passport; a criminal record certificate or equivalent foreigner’s paper specified by the applicable foreign law; the curriculum vitae, true copies of diplomas, certificates and other documents proving the qualifications and eligibility of the person to be appointed as Chairperson of the Members’ Council, Director/General Director, at-law representative or appointed actuary of the insurer/reinsurer.
5	A list of members enclosed with the documents as follows: A true copy of the establishment decision or the business registration certificate or another equivalent paper; A true copy of the company’s charter; The decision by the authorized person of the capital-contributing organization on such organization’s contribution of capital to establish the insurance company; The power of attorney and a copy of the citizen identity card, people’s identity card or passport of the duly authorized representative of the capital-contributing organization; True copies of the audited financial statements in 03 consecutive years preceding the year in which the application dossier is submitted. In the case where a foreign insurer/reinsurer or a foreign financial/insurance corporation authorizes its subsidiary to contribute capital to establish an insurer/reinsurer in Vietnam, true copies of such subsidiary’s audited financial statement in 03 fiscal years immediately preceding the year, in which the application dossier is submitted, are also required. The audited financial statements of the insurer/reinsurer or the foreign financial/insurance corporation or its subsidiary. It has made financial statements, which must be audited and given unqualified opinions, in 03 consecutive years preceding the year in which the application dossier for the establishment and operation license is submitted. The foreign insurer’s power of attorney for its subsidiary specializing in making offshore investment and its commitment to take joint responsibility with the subsidiary for the capital contribution and obligation to establish an insurer in Vietnam (in the case where a foreign insurer authorizes its subsidiary specializing in making offshore investment to establish an insurer in Vietnam); Written commitments of the foreign insurer/reinsurer or the foreign financial/insurance corporation to providing financial, technological, corporate governance, risk management, administration and operation support to the insurer/reinsurer to be established in Vietnam; ensuring that such insurer/reinsurer complies with the Law on Insurance Business regarding assurance of financial prudence and risk management; Documentary proof of the compliance having the total asset value not lower than USD 2 billion in the year preceding the year of submission of the license application dossier of the foreign insurer’s/reinsurer’s or the foreign financial/insurance corporation’s capital contribution.
6	A list of beneficial owners, including their full name, date of birth, people’s identity card/citizen identity card/passport number, nationality (in the case where one has multiple nationalities, all his/her nationalities and registered residences in the countries of nationality must be listed therein), residential address in Vietnam (if any), percentage of direct and indirect ownership in the insurer/reinsurer to be established.
7	A certification by a bank licensed to operate in Vietnam of the charter capital deposited at a frozen account opened at the bank, which must not be less than the minimum charter capital, as specified in Article 35 of this Decree. Within that, the amount each member has contributed, the frozen amount, the purpose of freezing, the frozen period, and requirements for unfreezing shall be specified therein.
8	A minutes of the meeting of members (to be included in the application dossier for establishment of a limited liability company with 2 or more members) which records: Agreement to contribute capital to establish the limited liability insurer/reinsurer, enclosed with the list of members; Adoption of the company’s charter.
9	The written confirmation by a competent authority of the country where the capital-contributing foreign insurer/reinsurer or financial/insurance corporation is headquartered that: The foreign insurer/reinsurer or the foreign financial/insurance corporation is permitted to establish an insurer/reinsurer in Vietnam. If such permission is not required by such country, it shall obtain a statutory written confirmation of such non-requirement by a competent authority/organization/person under the law of such country; The foreign insurer/reinsurer or the foreign financial/insurance corporation is operating in the line of business in which it expects to operate in Vietnam; The foreign insurer/reinsurer or the foreign financial/insurance corporation is in a sound financial state and fully satisfies the regulatory requirements in the country where it is headquartered; It has not seriously violated the law on insurance business of the country where it is headquartered for 03 consecutive years before the application dossier for the establishment and operation license is submitted.
10	A relevant State authority’s written confirmation that the Vietnamese capital-contributing organization satisfies the requirements of financial safety and is permitted to contribute capital to establish an insurer/reinsurer in accordance with the law. If the applicable law does not require it to obtain written permission, the capital contributing organization must have a written certification.
11	Written commitments of members on their eligibility for being granted the license in accordance with Article 11 of this Decree and Article 65 of the Law on Insurance Business.
12	A document proving that the capital-contributing organization operating in a line of business subject to the minimum (legal/charter) capital requirement satisfies the requirements specified in Clause 2, Article 63 of this Decree.
13	A written authorization for an individual or organization to carry out licensing procedures on behalf of the members.

*For the joint stock companies:

No.	Documents
1	An application for grant of the License made using the form provided in Appendix I to this Decree.
2	The draft charter of the enterprise;
3	A plan on the first 05 years’ operation suitable to the line of business to be licensed, in which the types of insurance to be deployed, target market, distribution channel, technical reserving methodology, reinsurance program, capital investment, business efficiency, solvency, internal control, internal auditing, risk management, information technology of the insurer/reinsurer.
4	A true copy of the citizen identity card/people’s identity card/passport; a criminal record certificate or equivalent foreigner’s paper specified by the applicable foreign law; the curriculum vitae, true copies of diplomas, certificates and other documents proving the qualifications and eligibility of the person to be appointed as Chairperson of the Members’ Council, Director/General Director, at-law representative or appointed actuary of the insurer/reinsurer.
5	Profiles of individual founding shareholders, each consists of: A true copy of the citizen identity card/people’s identity card/passport; and a criminal record certificate or equivalent foreigner’s paper specified by the applicable foreign law; A bank’s certification of his/her deposit balance in VND or a freely convertible currency.
6	Profiles of institutional shareholders contributing 10% or more of the charter capital, each consists of: A true copy of the establishment decision or the business registration certificate or another equivalent paper; A true copy of the company’s charter; The decision by the authorized person of the capital-contributing organization on such organization’s contribution of capital to establish the insurance company; The power of attorney and a copy of the citizen identity card, people’s identity card or passport of the duly authorized representative of the capital-contributing organization; In the case where a foreign insurer/reinsurer or a foreign financial/insurance corporation authorizes its subsidiary to contribute capital to establish an insurer/reinsurer in Vietnam, true copies of such subsidiary’s audited financial statement in 03 fiscal years immediately preceding the year, in which the application dossier is submitted, are also required. In the case where a foreign insurer/reinsurer or a foreign financial/insurance corporation authorizes its subsidiary to contribute capital to establish an insurer/reinsurer in Vietnam, true copies of such subsidiary’s audited financial statement in 03 fiscal years immediately preceding the year, in which the application dossier is submitted, are also required. The audited financial statements of the insurer/reinsurer or the foreign financial/insurance corporation or its subsidiary must make financial statements, which must be audited and given unqualified opinions, in 03 consecutive years preceding the year in which the application dossier for the establishment and operation license is submitted; The foreign insurer’s power of attorney for its subsidiary specializing in making offshore investment and its commitment to take joint responsibility with the subsidiary for the capital contribution and obligation to establish an insurer in Vietnam (in the case where a foreign insurer authorizes its subsidiary specializing in making offshore investment to establish an insurer in Vietnam); Written commitments of the foreign insurer/reinsurer or the foreign financial/insurance corporation to providing financial, technological, corporate governance, risk management, administration and operation support to the insurer/reinsurer to be established in Vietnam; ensuring that such insurer/reinsurer complies with the Law on Insurance Business regarding assurance of financial prudence and risk management; Documentary proof of the compliance with Point b, Clause 1, Article 65 of the Law on Insurance Business of such organization’s capital contribution.
7	Profiles of institutional shareholders contributing less than 10% of the charter capital, each consists of: A true copy of the establishment decision or the business registration certificate or another equivalent paper; A true copy of the company’s charter; The decision by the authorized person of the capital-contributing organization on such organization’s contribution of capital to establish the insurance company; The power of attorney and a copy of the citizen identity card, people’s identity card or passport of the duly authorized representative of the capital-contributing organization; A true coy of the audited financial statement in the year immediately preceding the year in which the application dossier for the establishment and operation license is submitted.
8	A list of beneficial owners, including their full name, date of birth, people’s identity card/citizen identity card/passport number, nationality (in the case where one has multiple nationalities, all his/her nationalities and registered residences in the countries of nationality must be listed therein), residential address in Vietnam (if any), percentage of direct and indirect ownership in the insurer/reinsurer to be established.
9	A certification by a bank licensed to operate in Vietnam of the charter capital deposited at a frozen account opened at the bank, which must not be less than the minimum charter capital. Within that, the amount each shareholder has contributed, the frozen amount, the purpose of freezing, the frozen period, and requirements for unfreezing shall be specified therein.
10	Minutes of the meeting of shareholders which records: Their agreement to contribute capital to establish the joint-stock insurer/reinsurer, enclosed with a list of shareholders and founding shareholders; Adoption of the company’s charter.
11	Written authorization for an individual or organization to carry out the procedures for being granted the establishment and operation license on behalf of the shareholders.
12	A relevant State authority’s written confirmation that the Vietnamese capital-contributing organization satisfies the requirements of financial safety and is permitted to contribute capital to establish an insurer/reinsurer in accordance with the law. If the applicable law does not require it to obtain written permission, the capital contributing organization must have a written certification.
13	A written authorization for an individual or organization to carry out licensing procedures on behalf of the members.
14	The written confirmation by a competent authority of the country where the capital-contributing foreign insurer/reinsurer or financial/insurance corporation is headquartered that: The foreign insurer/reinsurer or the foreign financial/insurance corporation is permitted to establish an insurer/reinsurer in Vietnam. If such permission is not required by such country, it shall obtain a statutory written confirmation of such non-requirement by a competent authority/organization/person under the law of such country; The foreign insurer/reinsurer or the foreign financial/insurance corporation is operating in the line of business in which it expects to operate in Vietnam; The foreign insurer/reinsurer or the foreign financial/insurance corporation is in a sound financial state and fully satisfies the regulatory requirements in the country where it is headquartered; It has not seriously violated the law on insurance business of the country where it is headquartered for 03 consecutive years before the application dossier for the establishment and operation license is submitted.
15	Written commitments of shareholders on their eligibility for being granted the license in accordance with Clause 1, Article 11 of this Decree and Article 66 of the Law on Insurance Business.
16	A document proving that the capital-contributing organization operating in a line of business subject to the minimum (legal/charter) capital requirement satisfies the requirements specified at Point a, Clause 1, Article 11 of this Decree.

*Establishment of insurance enterprises: Updated registration conditions and procedure (Illustration)*

Step 2: Submit the dossier

Submit the dossier directly to the Ministry of Finance by:

- Directly at the Ministry of Finance; or

- Sending by post; or

- By online public service system if satisfying all the conditions for application:

Step 3: Resolution of the dossier

- Within 30 days after an application dossier for a license is received, if it is deemed incomplete and invalid, the Ministry of Finance shall serve a written notice requesting supplementation and modification thereof.

The time limit for supplementation and modification of a dossier is 6 months after the notice is served. If a dossier is not supplemented and modified within such period of time, the Ministry of Finance shall refuse to consider granting the license.

The sum of time during which the organization or individual may supplement and modify the dossier shall not exceed 12 months from the first notice of the Ministry of Finance. Once the above time period has passed, if the organization or individual fails to finalize the dossier or documents, the Ministry of Finance reserves the right to refuse to consider granting the license.

- Within 60 days after receiving a complete and valid application dossier, the Ministry of Finance shall grant the establishment and operation license, made using the template to the insurer/reinsurer or Vietnam-based foreign branch.

The Ministry of Finance may only refuse to grant the license when the capital-contributing organization or individual, or the insurer/reinsurer or Vietnam-based foreign branch fails to fully satisfy the requirements and complete the application dossier as specified in this Decree or such organization or individual falsifies or forges the documents.

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