Things the foreigner need to know before opening a stock account for in Vietnam

Things foreigners need to notice before opening a stock account in Vietnam

Instructions on how to open a stock market for foreign investors (opening indirect investment account)

If you can not communicate in Vietnamese, you may find it difficult to understand the content of the brokerage contracts and other services. It is also hard to ask the office staff (who give you prepared contracts) to explain the detail of terms because of their limited English and their limited working time.

Thing you need to know for investing in Vietnam's stock market

The language barrier is one of the biggest issues to foreign investors.

We advise you should completely understand all of the contract’s content before you sign. In general, when opening a stock account in Vietnam you may sign three contracts with the brokerage securities company. These contracts are the contract of opening a stock account, margin contract, and internet banking transfer. Contact us we will help you understand in detail about every contract’s content.

Below we recommend some details you must know before signing the contract:

1. Make clear all the fees that you may pay.

Trading fee: the trading fee is the most costly fee that you should pay attention to. In the case you trade frequently, this fee will account for a largest proportion. Normally the trading fee is calculated by the percentage of

Click here to find out some companies’ fees.
Besides trading fee, you should take a look at other fees such as transaction through call center fee, receiving account information fee, market research information by text message fee, online trading fee, and receiving a monthly statement via email fee, etc.

2. Margin lending contract

There are some points of the contract you need to make clear such as the margin call rate, the margin loan rate and the lending rate of stock before opening a stock account.
Call margin rate: A margin call is a broker’s demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance account.
The margin calls occur when the account value depresses to a value calculated by the broker’s particular formula.
Recently, a margin interest rate around 13% per year is acceptable in Vietnam’s market.
According to Vietnam securities law in 2015, foreigners are not permitted to use margin lending services except in some particular cases.

3. Internet banking and transferring money

When transferring money you may have to pay for an internet banking transfer fee. You should be aware of which local banks are associated with the securities company that you open the stock account to avoid the transferring fee.
According to Vietnam’s securities regulations, there should have many local banks and foreign banks, that are allowed to custody stocks for foreigners. But most large brokerage companies (HSC, SSI, and VCSC) collaborate with only BIDV when opening the stock account for foreign investors. The reasons that we suppose are the small potential revenue and Vietnam’s strict currency management regulations of foreigners.

Due to the strict regulations, BIDV does not support foreigners to transfer money.
Normally, foreigners should present in a BIDV office to fulfill their transferring procedures. However, you have a broker, who can support you to offer BIDV to implement your order without your presence. These procedures may take a few days if you are staying aboard when making a transferring money order.

 

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