Foreign investors contribute capital to Vietnamese companies

Pursuant to the provisions of the 2014 Investment Law, the 2014 Enterprise Law and the documents guiding the implementation of the 2014 Investment Law and the 2014 Enterprise Law, stipulating the foreign investors’ investment in the form of capital contribution, buying shares and capital contributions to Vietnamese companies (Vietnamese companies are understood as companies established in Vietnam, including: 100% owned capital of the company is Vietnamese and Foreign-invested companies operating in Vietnam) are prescribed and implemented as follows:

Form of foreign investors contributing capital to Vietnamese companies:

– Purchase of shares issued for the first time or additionally issued shares of a joint stock company through the purchase of shares of a joint stock company from the company or shareholders;

– Contributing capital to a limited liability company through the purchase of capital contributions by members of the limited liability company to become a member of the limited liability company;

– Contributing capital to the partnership through the purchase of capital contributions of partners in the partnership to become capital contributing members of the partnership;

– Contributing capital to Vietnamese companies in other forms.

Foreign investor means a foreign individual, enterprise or foreign organization contributing capital to or buying shares from a company with 100% Vietnamese capital.

Conditions for foreign investors to contribute capital to Vietnamese companies:

– Foreign investors contributing capital to Vietnamese companies must comply with the investment form, scope of activities, Vietnamese partners participating in the implementation of investment activities and other conditions in accordance with international treaties of which Socialist Republic of Vietnam is a member.

– The charter capital ownership ratio of foreign investors in Vietnamese companies is not limited, except for the following cases:

  • Ownership ratio of foreign investors in listed companies, public companies, securities trading organizations and securities investment funds in accordance with the law on securities;
  • The ownership ratio of foreign investors in equitized or transformed state owned enterprises in other forms complies with the law on equitization and conversion of state enterprises;

Ownership ratio of foreign investors other than public companies, securities trading organizations, investment funds, state-owned enterprises comply with other relevant laws and treaties of which The Socialist Republic of Vietnam is a member.

Carrying out procedures for registration of capital contribution, purchase of shares or equity interests in Vietnamese companies in the following cases

  • Foreign investors contribute capital, purchase shares, or contribute capital to Vietnamese companies operating in conditional business investment sectors and trades applicable to foreign investors;
  • Capital contribution, share purchase, or capital contribution result in foreign investors holding 51% or more of charter capital of a Vietnamese company.

Documents about registration for capital contribution, share purchase, capital contribution of foreign investors to Vietnamese companies:

  • A written registration of capital contribution, share purchase or capital contribution comprising the following information: about economic organizations that foreign investors plan to contribute capital, purchase shares or contribute capital; ratio of ownership of charter capital of foreign investors after contributing capital, buying shares, or buying capital contributions of business organizations;
  • Copies of identity card or passport for individual investors; copy of the Establishment Certificate or other equivalent documents certifying the legal status for institutional investors.

Form of foreign investors contributing capital to Vietnamese companies:

In the situation that foreign investors register to contribute capital, purchase shares or contribute capital to the company with 100% Vietnamese capital

Step 1: The investor submits the dossier to the Investment Department – Department of Planning and Investment where the economic organization is headquartered to complete procedures for registration of the capital contribution, share purchase and capital contribution to the Company with 100% Vietnam.

In case the capital contribution, purchase of shares or stakes of foreign investors meet the conditions that the Department of Planning and Investment sends a written notice within 15 days from the date of receipt of the complete application for the investor to carry out procedures for changing shareholders and members according to the provisions of law. In case of failure to meet the conditions, the Department of Planning and Investment shall notify the investor in writing, clearly stating the reason.

Step 2: After obtaining the Investment Department – Department of Planning and Investment’s approval of foreign investors’ contribution of capital, purchase of shares or capital contributions, investors shall carry out the following procedures:

Follow procedures for changing shareholders or members on the Business Registration Certificate (Enterprise Registration Certificate) in accordance with the law at the Business Registration Office – Department of Planning and Investment.

In the situation that foreign investors register to contribute capital, purchase shares, or contribute capital to foreign-invested companies in Vietnam:

Step 1: The investor submits the dossier to the Investment Department – Department of Planning and Investment where the economic organization is headquartered to complete procedures for registration of the capital contribution, share purchase and capital contribution in a company with invested capital foreign investment.

Step 2: After obtaining the Investment Department – Department of Planning and Investment’s approval of foreign investors contributing capital, buying shares, or buying capital contributions. If the company has not yet split the investment certificate into an investment registration certificate and enterprise registration certificate, the investor shall carry out the procedures for splitting and granting the enterprise registration certificate, making a new legal seal at Business Registration Office – Department of Planning and Investment.

Step 3: After separating the investment registration certificate and the enterprise registration certificate, the investor shall adjust the investment registration certificate at the investment licensing agency.

Payment by the assignee to the assignor of contributed capital

  • Pursuant to the Circular No. 19/2014 / TT-NHNN dated 11/8/2014 of the State Bank of Vietnam, the payment for the transfer of investment capital in enterprises with foreign direct investment must be done via the foreign direct investment account of that enterprise. Therefore, when a foreign investor contributes capital to a Vietnamese company, it must open a foreign direct investment account at a bank in Vietnam; can be opened in Vietnamese Dong or in foreign currencies, depending on the currency used to contribute capital to invest in the enterprise.

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Foreign investors contribute capital to Vietnamese companies

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