Dossier for foreign investors to purchase shares in Vietnam

To carry out the capital contribution or purchase of shares/contributing capital of an economic organization established in accordance with the law of Vietnam, the investor and economic organization need to prepare documents to carry out the procedures. according to the provisions of the law on investment and enterprises. In this article, Viet An Law would like to have some legal opinions on the documents for foreign investors to contribute capital, purchase shares/ stakes to economic organizations as follows:

Investment conditions in the form of capital contribution, purchase shares in Vietnam

Foreign investors that contribute capital, purchase shares or stakes from economic organizations must satisfy the following regulations and conditions:

• Conditions on market access for foreign investors are regulated, including:
  • Rate of ownership of charter capital of foreign investors in economic organizations;
  • Investment form;
  • Scope of investment activities;
  • Investor’s capacity; partners participating in investment activities;
  • Other conditions as prescribed in laws and resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a signatory.
• To ensure national defense and security;
• Regulations of the land law on conditions for receiving land use rights, conditions for using land in islands, communes, wards, border towns, communes, wards and coastal townships.

Cases required procedures for registration of capital contribution and purchase shares in Vietnam

Investors contributing capital, purchasing shares or stakes of economic organizations must satisfy the conditions and carry out procedures for changing members and shareholders according to the provisions of law corresponding to each type of economic organization.

Foreign investors shall carry out procedures for registration of capital contribution, purchase of shares or stakes of economic organizations before changing members or shareholders if they fall into one of the following cases:

• The contribution of capital, purchase of shares, stakes increases the foreign investors’ ownership rate in economic organizations engaged in business lines and trades with conditional market access for foreign investors;
• The contribution of capital, purchase of shares, stakes results in the holding of more than 50% charter capital by foreign investors and economic organizations specified at Points a, b and c, Clause 1, Article 23 of the Law on Investment in 2020 as the following cases:
  • Increase foreign investor’s share of charter capital from less than or equal to 50% to over 50%;
  • Increase the rate of ownership of charter capital of foreign investors when foreign investors already own more than 50% of charter capital in economic organizations;
• Foreign investors contribute capital, purchase shares, stakes from economic organizations having land use right certificates in islands and border communes, wards and townships; coastal communes, wards and towns; other areas affecting national defense and security.

Investors not falling into the above cases shall carry out procedures for changing shareholders or members in accordance with relevant laws when contributing capital, purchasing shares or stakes from economic organizations. In case of need to register the capital contribution, purchase of shares or stakes of an economic organization, the investor shall comply with the provisions of law and the relevant procedures as mentioned above.

Dossier for foreign investors to purchase shares of a company in Vietnam

Investment procedures in the form of capital contribution or purchasing share/ stakes are carried out according to the following steps:

• Step 1: Register to contribute capital, purchasing shares or stakes of economic organizations
• Step 2: Procedures for changing members and shareholders according to the provisions of law corresponding to each type of economic organization.

Step 1: Register to contribute capital, purchasing shares, stakes of economic organizations

This step is performed before changing members, shareholders if they fall into one of the cases mentioned in the section Cases where the procedures for registration of capital contribution or purchase of shares/ stakes must be carried out in this article.

Dossier for registration of capital contribution, share purchase or stake purchase of an economic organization includes:

• A written registration for capital contribution, share purchase, or stake purchase includes the following contents: information on business registration of the economic organization to which the foreign investor intends to contribute capital, purchase shares, or stakes; business lines; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); rate of ownership of charter capital of foreign investors before and after capital contribution, share purchase, purchase of capital contribution to economic organizations; expected transaction value of the contract of capital contribution, share purchase, purchase of contributed capital; information on investment projects of economic organizations (if any);
• Copies of legal documents of individuals and organizations contributing capital, purchasing shares/ stakes and economic organizations with foreign investors contributing capital, purchasing shares/ stakes: Passport (if applicable) is an individual); Business license or equivalent document and Passport of the person authorized to manage the capital portion in Vietnam (if an organization);
• Written agreement in principle on capital contribution, share or stake purchase, between foreign investors and economic organizations in which foreign investors contribute capital, purchase shares, purchase capital contributions or between investors foreign investment with shareholders or members of that economic organization;
• A copy of the certificate of land use rights of an economic organization in which foreign investors contribute capital, purchase shares or purchase capital contributions, if such economic organization has a certificate of land use right in the island, commune, border wards and towns and coastal communes, wards and towns; Other areas affecting national defense and security, except for economic organizations implementing investment projects in industrial parks, export processing zones, hi-tech parks and economic zones established under the Government’s regulations. .
• Power of Attorney for Law Viet An.

Place of application : Department of Planning and Investment where the economic organization’s head office is located.

Procedures:  If the foreign investor’s capital contribution, share purchase or stakes meets the conditions on ownership ratio and investment form in accordance with the Schedule of Commitments and Vietnamese law. Within 15 days from the date of receipt of complete dossiers, the Department of Planning and Investment will notify in writing. In case the application does not meet the conditions, the Department of Planning and Investment will notify in writing and clearly state the reason.

Step 2: Procedures for changing members and shareholders according to the provisions of law corresponding to each type of economic organization

Depending on the type of business, the company carries out corresponding procedures such as:

• Change of owner for a single-member limited liability company in case a foreign investor buys 100% of the owner’s contributed capital
• Change of member of a multiple-member limited liability company
• Change of shareholders being foreign investors for joint-stock companies.

Details of each corresponding procedure. Customers can directly contact Viet An Law for more detailed instructions.

Services of Viet An law firm related to purchase shares of a company in Vietnam

• Advising on conditions for capital contribution and purchase of shares/capital contribution in accordance with the provisions of the law on investment
• Consulting on choosing the right type of company for investors after contributing or receiving capital transfer: limited liability company or joint stock company.
• Consultancy on payment procedures for capital transfer;
• Consulting and guiding investors to prepare necessary documents to implement license adjustment contents;
• Representing investors to work with competent Vietnamese state agencies in the process of carrying out procedures for adjusting permits.