On June 16, 2022, the National Assembly passed the Law on Insurance Business No. 08/2022/QH15 (hereinafter referred to as “Law on Insurance Business 2022”). This is considered an important legal instrument with the expectation that it will create a new development for the insurance market in the future.

In addition to ensuring the implementation of Vietnam's commitments in the WTO and signed trade agreements, Law on Insurance Business 2022 has created favorable conditions for foreign investors in the field of insurance business, including:

(i)    To specifically and clearly stipulate the establishment and operation of branches of foreign reinsurance enterprises in Vietnam: Pursuant to EU-Vietnam Free Trade Agreement  (EVFTA) which was signed on June 30, 2019 and took effect from August 01, 2020, Vietnam has committed to allow reinsurance enterprises of EU to set up branches of foreign reinsurance enterprises in Vietnam after 3 years from the effective date of this Agreement. Therefore, in order to concretize the above commitment, Law on Insurance Business 2022 has been supplemented with provisions on the establishment of branches of foreign reinsurance enterprises in Vietnam in Chapter 3 of this Law.

(ii)    To allow foreign investors are entitled to own shares and contributed capital up to 100% of charter capital of an insurance enterprise or reinsurance enterprise: Based on Vietnam’s commitments in the WTO and other trade agreements regarding the field of insurance services, Vietnam has not stipulated any restrictions related to the ratio of capital ownership of foreign investors in insurance enterprises. Hence, to ensure the clarity of such regulation, Law on Insurance Business 2022 provides that foreign investors are allowed to own shares and contributed capital up to 100% of the charter capital of an insurance enterprise or reinsurance enterprise in accordance with Article 68 of this Law.