FDI firms could provide new stock supply as Việt Nam pushes IPOs

FDI firms could provide new stock supply as Việt Nam pushes IPOs

Only 11 FDI enterprises have listed or registered for trading since Việt Nam's stock market began operating.

Investors visit the Hochiminh Stock Exchange's headquarters in HCM City. — VNA/VNS Photo

Foreign-invested enterprises could become a new source of quality stocks for Việt Nam's equity market as regulators seek to encourage more initial public offerings and listings, but companies will need to raise their standards of corporate governance, financial reporting and disclosure to attract investors.

Despite the FDI sector's significant role in the economy, its presence on the stock market remains limited.

According to Vice Chairman of the State Securities Commission (SSC) Hoàng Văn Thu, only 11 FDI enterprises have been listed or registered for trading since Việt Nam's stock market began operating. Ten remain on the market, compared with nearly 1,600 listed and registered companies nationwide.

At the end of 2025, the FDI companies on the market had combined charter capital of over VNĐ12.6 trillion (US$484.7 million) and total assets of VNĐ44.7 trillion, representing just 0.15 per cent and 0.48 per cent, respectively, of the market totals.

Since 2017, another four FDI companies have registered as public companies, but none has completed a listing or trading registration.

This contrasts with continued growth in foreign investment. Total newly registered, adjusted and share-purchase FDI exceeded $38.4 billion in 2025, while disbursed capital surpassed $27.6 billion.

In the first six months of 2026 alone, registered FDI reached $34.6 billion, up 61 per cent year-on-year, while disbursement rose 11.2 per cent to $13 billion. Newly registered capital increased 87.2 per cent and capital contributions and share purchases rose 89.5 per cent.

Thu said FDI companies could diversify the range of stocks available to investors, including businesses with strong financial foundations, advanced technologies and internationally aligned management capabilities.

Their participation could increase market capitalisation and liquidity while attracting both FDI and foreign portfolio investment. A larger supply of stocks could also reduce the market's dependence on traditional sectors such as banking, real estate and securities.

The issue has gained attention as Việt Nam prepares for to transition from Frontier to Secondary Emerging Market status under FTSE Russell, scheduled to begin on September 21.

Capital demand is also increasing. 

According to the SSC, total social investment needs for 2026–2030 are projected at around VNĐ38.5 quadrillion, averaging VNĐ7.7 quadrillion annually and nearly double the level from 2021 to 2025.

Higher governance standards

For FDI companies, however, entering the public market involves more than changing their legal structure or completing an IPO. Many FDI enterprises in Việt Nam currently operate as limited liability companies, with financial reporting primarily designed for internal management and their overseas parent groups.

Trần Phú Sơn, general director of EY Việt Nam, said one of the biggest differences involved the frequency and level of scrutiny involved in financial reporting.

While limited liability companies generally prepare year-end financial statements, listed public companies must report quarterly, have their semi-annual financial statements reviewed, and comply with extraordinary disclosure requirements, sometimes within 24-72 hours.

Companies therefore need to invest in technology, standardise their data, strengthen internal controls and improve the capabilities of finance and accounting teams.

Corporate governance structures must also change. According to Sơn, a minimum 30 per cent of board members to be independent means companies need to recruit people with appropriate expertise, knowledge of Vietnamese law, and genuine independence in decision-making.

This is particularly relevant where an overseas parent remains the controlling shareholder. Related-party transactions, profit distribution, transfer pricing, asset utilisation and intra-group contracts would be subject to greater transparency requirements.

Financial reporting standards are another consideration.

Sơn said International Financial Reporting Standards (IFRS), although not yet compulsory for every company, could provide an important advantage for FDI enterprises seeking international investors by allowing easier comparison with peers in other markets.

However, EY estimates that the transition from Vietnamese Accounting Standards to IFRS can take around one to three years, requiring early preparation of data, systems and personnel.

Regulators are also working to facilitate market entry.

Trần Kim Dung, deputy head of the SSC's Securities Offering Regulation Department, said legal frameworks governing enterprises, investment and securities are applied consistently without distinguishing between domestic and FDI companies, while foreign ownership limits are determined according to business sectors.

The SSC has also integrated the registration procedures for public offerings and listings, reducing the processing time for applications to around 30 days.

Thu said FDI enterprises could become a source of high-quality securities for the market. Moving from a limited liability structure to a public company could help businesses optimise capital costs and expand operations while contributing to the competitiveness of Việt Nam's financial market. 

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