New tax guidelines may boost listing companies

HA NOI — With new guidelines issued by the Ministry of Finance (MoF) on taxes applied for those listing on the Ha Noi stock exchange, officials hoped they will encourage more firms to file for listing on the stock market.

Under the new rules released in late April, firms will enjoy an exemption on corporate income tax in the first year of listing and another 50 per cent cut for the next two years.

Tran Van Dung, director of the Ha Noi Securities Trading Centre, said after the regulations were issued, many firms have sped up registration for listing.

The centre started receiving applications filed for transactions via the centre on Monday. Approval for the listing will be granted within 20 days.

Currently, there are only five firms ready for listing on the centre with three from Ha Noi and two from Hai Phong, Dung said.

"These companies have completed their audited financial statements for the year 2004 and already signed a consulting contract with securities companies."

The five expected firms include the Thang Long Wine Joint Stock Company, the Garment Company 10, the Hacinco Company, Hai Au Paper Company and the Hai Phong Infrastructure Development Company.

Meanwhile, he said, energy producers including the Vinh Son-Song Hinh HydroPower Plant and Khanh Hoa Electricity Company who made their Initial Public Offering at the centre in March will also register for listing.

Dung said after new regulations on Ha Noi stock exchange’s activities were issued by the State Securities Commission last week, he hoped more firms especially those newly-equitised will show eagerness in listing.

"I believe that some newly-equitised firms will complete their files in time for registration when the transaction floor is launched."

An MoF survey showed that nearly one third of 2,300 newly-equitised companies have a legal capital of above VND5 billion (US$316,000), reported a profit last year, and are qualified for listing on the Ha Noi stock exchange.

Launched in March, the Ha Noi stock exchange is scheduled to start stock transactions in June.

Viet Nam News, May 11, 2005