• Resident individual: (Investors can find detail of this definition in Circular no. 84/2008/TT-BTC)

Before January 1st 2009, no tax rate applied at this moment.

Since January 1st 2009, according to Circular no. 84/2008/TT-BTC, an individual has 2 options in tax payment:

If an individual has registered tax payment method (with tax code number) under the flat rate tariff: tax rate of 20% imposes on the total profit from all kinds of securities traded within the western calendar year.

If Ian individual has not registered tax payment method (with tax code) under the flat rate tariff: tax rate of 0,1% imposes on the total amount of money receivable from transference of fund certificates at the time of transfer (without deducting any expenses at all including the prime cost and irrespective of whether the transfer war implemented in Vietnam or overseas).

  •  Non-resident individual: (Investors can find detail of this definition in Circular no. 84/2008/TT-BTC)

Before January 1st 2009, no tax rate applied at this moment.

Since January 1st 2009, according to Circular no. 84/2008/TT-BTC, 0,1% tax rate imposes on the total amount of money receivable from transference of fund certificates at the time of transfer (without deducting any expenses at all including the prime cost and irrespective of whether the transfer war implemented in Vietnam or overseas).

  • Institutional domestic investor:

Incomes from transference of fund certificates shall be aggregated with incomes from business activities of enterprises for calculation of enterprise income tax according to the Enterprise income tax Law.

  • Institutional foreign investor:

According to Circular no. 72/2006/TT-BTC, 0,1% tax rate imposes on the total value of transference of fund certificates at the time of transfer (without deducting any expenses at all including the prime cost).

Note: This regulation shall be changed as new document is issued. We will update timely.

 

  • Domestic / Foreign Individual Investor
    • Before January 1st 2009, no tax rate applied at this moment.
    • Since January 1st 2009, tax rate of 5% imposes on dividend income according to Circular no. 84/2008/TT-BTC
  • Domestic / Foreign Institutional Investor

According to Circular no. 72100/20064/TT-BTC , tax rate of 20% imposes on dividend income. This regulation shall be changed as new document is issued. We will update timely .

 

As the fund in the period of initial public issuance, investor who would want to join the capital contribution should follow the basic steps:

Step 1: Research documents
Investors should have a closer research details on documents related to the Fund as: License of public issuing certificates, Prospectus and the Fund Charter.

Step 2: Consultant
Investors will receive the consultant directly from PHFM, or at the securities company or distribution agents.

Step 3: Registration
When the investor make the investment decision, they will fill all the related information in the registration form issued by PHFM. Then investors deposit this form at PHFM or at securities companies or at distribution agents.

Step 4: Payment
If investors have registered to buy the fund certificates at:
+ PHFM: investors will deposit money in the account at bank.
+ Securities Company: open accounts at the securities company(if not applicable) and deposit money to buy fund certificates at the same account in securities company.

Depending on the amount of the investment, investors can register to buy certificates from required registration minimum to the maximum amount stipulated by the fund management and payment can be in cash or bank transfer.

In case the number of the purchase amount exceeds registration number and stated in the Fund Charter, the distribution will be according to the contribution ratio. The amount of difference will be repaid to investors through distributors where investors have been registered to purchase.

Step 5:Receive certificate of ownership
The investors will receive a written confirmation stated the ownership of their certificates at PHFM or at the securities company. Then investor should re-deposit their certificates at securities companies where they obtain their account. Finally, investors can trade these fund certificates right after they are listed on the stock market.

 

 

After fund certificates are listed in HoSE, it will be trade at the HCM Stock Exchange (HoSE). Hence, investors should follow the steps as follows:

Step 1: Open trading account
Investor needs to have a securities account or open a new account transactions (if not applicable) under the regulations of the current Law. The required documents to open a trading account includes:
+ For local individual investors: ID or Passport (copy notarized)
+ For foreign individual investors: passport and historical record which shows no conviction. Also, investors may contact their consulate.
+ For institutional investors: subscription of business license, Decision nomination / authorization and certify the people, passport of the authorized person (copy notarized)

Step 2: Research documents
Investors should have a closer research details on documents related to the Fund as: License of public issuing certificates, Prospectus and the Fund Charter.

Step 3: Consultant
Investors will receive the consultant directly from VFM, or at the securities company or distribution agents.

Step 4: Payment
Investors should transfer money to the trading account at the Securities company and place the purchase order as regulated by the securities company.

Step 5:
After 3 days (T+3), investors will officially own their fund certificates.

 

Investment Fund is the pool of money contributed by a range of investors who may be individuals or companies or other organizations, which is managed and invested as a whole, on behalf of those investors.

This investment fund is professionally managed by the fund management company and closely monitored by the regulators.

Types of investment fund

At present, there are many types of investment funds pursuant to the various classification criteria.

1. Base on capital mobilization:

  • Public fund:

The fund mobilizes capital by issuing it shares to the public. Investors may be individuals or institutions but majority of investors are individuals. Public fund provides an investment tools to investors in diversification of investment portfolio, risks minimization and cost efficiency high due to high professional management skills.

  • Member fund:

The fund mobilizes capital by issuing only to a group of small investors, who can obtain the priority to buy first, individuals, other financial institutions or large corporations, thus the liquidation of this fund is less than the public fund. Investors in such a fund usually invest with a large amount of capital, which allows them to obtain much greater control in the fund investment.

2- Base on the structure of capital mobilization:

  • Closed - End fund: means a public fund whose fund certificates, upon having been offered for sale to the public, shall not be redeemed as requested by investors.

In order to create the liquidity for this type of fund, after the end of the issuing period (or close the fund), the fund certificates will be listed on the stock market. Investors can buy or sell the certificates to obtain the capital gain from stock certificates or their investments through secondary market. Total capital mobilization of funds is fixed and not changed during the fund operations.

  • Opened - End fund:

Unlike the closed-end fund, the total capital of the fund changes in daily transactions because of the specific nature of the fund since the fund management is required to redeem or sell the fund unit per investors' requests with the rate at the trading time. For this type of fund, fund certificates are not listed on the stock market. Due to the demands of high liquidity, the form of opening this new fund exists only in countries where the economy and stock market have developed.

3- Base on the organizational structure and operation of the fund

  • Investment as company

In this model, the investment fund is an institution, a form of a company regulated under the law in each country. The highest power of the fund is the board of directors, voted by investors. This Board's main mission is managing the entire operation of the fund, selecting fund management company and monitoring investment activities. This type of company also have the right to replace the fund management agency if its capability is not strong enough. In this model, the fund management acts as an investment consultant, responsible in conducting investment analysis, asset allocation and other corporate governance. This fund model has not been available in Viet Nam as stipulated by the SSC.

  • Investment as a contract:

This is a model of trust fund investments. Unlike form of investment fund as a company, this pattern of investment funds does not form a legal entity. Fund management companies establish a fund, conduct the capital mobilization and implement the investment objectives as stated in the fund charter. In addition, the custodian bank plays an important role in capital preservation; relationship between the fund management and the custodian bank is a contract which stipulated the rights and obligations of the two parties in implementing, monitoring and protecting the investments. Investors who contribute capital to the fund (but not a shareholder in the investment fund company) and entrust their capital to the Trust investment company in order to ensure the highest possibility of return.

Benefit of Investment Fund

Why do people in developed economies prefer to invest indirectly in securities via funds rather than directly purchase these securities? The answer is that the investors find funds more attractive than securities because of the following factors:

Diversification

The fund is invested in dozens or even hundreds of securities covering different industries that meet the fund's objective. Owning a diverse mix of securities doesn't eliminate risk but can reduce it, as the ups and downs of individual securities often offset each other.

Affordable investment

Investors could invest in blue-chips companies, and own a basket of different companies with minimum required capital. With a minimum of VND 20 millions, investors can register to buy new offered fund.

Reduction of cost

One of the major factors in attracting investors to fund is cost. The details of the comparison will vary from one market to another, but the average small investor will usually incur higher total costs in buying and selling a portfolio on individual securities for himself than a fund would. The reason is that transaction costs in most markets have historically been related to the size of the transaction. The individual investors transaction costs on small purchases or sales are typically much higher as a percentage of the value of each transaction for those for institutional investors dealing in large quantities, such as fund.

Professional management

Managing investments requires a commitment of time, resources and expertise that most individuals don't have. When you invest in investment fund, you are hiring full-time professional managers to buy, sell and monitor your investments.
VFM is the pioneer of domestic fund management, we are a group of experts in asset management, with depth of experience in Vietnam's financial market, always quick to react and grab the opportunities to bring best possible returns.

Investor protection

Fund operation is regulated and monitored by the State Securities commission and the Stock Exchange
The Fund asset stays in custody at the Custodian Bank, which monitors the fund investment activities accordingly.
Transparency is guaranteed through fully reporting systems.

How is the investment fund regulated?

The main regulator of the fund management company is the State Securities Commission (SSC), the Ministry of Finance and the State Bank of Vietnam.
The Custodian Bank monitored, protect and deposit the fund's asset and the fund management company in order to protect the investor interests.
The fund management company implements the investment activities according to strategies in the fund's prospectus.
The auditor evaluates, and provides information of the fund's performance.

 

 

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