Procedures for extension of charter capital contribution of foreign capital company in Vietnam

Legal bases

• Investment Law 2020;
• Enterprise Law 2020;
• Decree 31/2021/ND-CP dated March 26^th 2021;
• Decree 01/2021/ND-CP dated January 04^th 2021;
• Decree 122/2021/ND-CP dated December 28^th 2021

What is the extension of the charter capital contribution period in Vietnam?

Extension of the time limit for charter capital contribution is a very important procedure to record the time limit for new capital contribution on the investment registration certificate when the enterprise cannot make the capital contribution on time. In case of failure to carry out extension procedures before the expiry of charter capital contribution, investors will be sanctioned for administrative violations in the field of investment.

The timely contribution of capital is considered extremely important because if it overdue according to the time limit for capital contribution specified in the Investment Certificate, the Bank will not allow to receive investment capital, the company will not be able to receive investment capital to conduct operations. However, in case the investor does not make timely arrangements to contribute capital, the investor needs to make an application to be extended the time limit for investment capital contribution.

Time limit for charter capital contribution of a foreign capital company in Vietnam

Investors should note the regulations on capital contribution as follows:

• The duration of capital contribution of a foreign capital company is usually recorded in the Investment Registration Certificate.
• On the Investment Registration Certificate of a foreign capital company, there are criteria for total investment capital, which includes contributed capital and other types as registered. For the time limit for charter capital contribution, according to the provisions of the Enterprise Law, investors must contribute in full within 90 days from the date of issuance of the Certificate of Business Registration.
• The total investment capital on the Investment Registration Certificate shall be transferred from abroad to the investment capital account in accordance with the time limit for capital contribution recorded in the Investment Certificate. If the time limit stated on the Investment Registration Certificate is exceeded, the bank opening the capital account will refuse to accept the capital transferred to the account. Thus, at this time, in order to transfer capital to an investment account, investors need to carry out procedures for adjusting the Investment Certificate, extending the time limit for capital contribution.

Procedures for extension of charter capital contribution of foreign capital company in Vietnam

Step 1: Make a dossier for adjustment of the Investment Registration Certificate

A dossier of adjustment of the Investment Registration Certificate includes:

• A written request for adjustment of the Investment Certificate;
• Report on the implementation of investment projects up to the time of adjustment;
• Decision and valid copy of meeting minutes of the Members’ Council/General Meeting of Shareholders/ owners of foreign capital company on adjustment of investment projects;
• Documents related to the adjustment: confirmation of the contributed investment capital; proof of financial capacity of insufficiently contributed investment capital;
• A certified copy of the granted Investment Registration Certificate;
• Written authorization in case the investor does not directly submit the application.

Step 2: Submit an application for extension of charter capital contribution time limit

• After preparing the dossier, the investor submits the dossier to the competent investment registration agency.
• Investors declare information about investment projects online at the National Foreign Investment Information System and submit them directly to the competent Investment Registration Office.
• Within 15 working days from the date of online declaration, investors must submit an extension application to the Investment Registration Agency.

Step 3: Process the application and get the results

Within 10 days from the date of receipt of a valid dossier, the Investment Registration Agency shall amend the Investment Registration Certificate for the investor to record the time limit for contributing new charter capital to the investor.

Handling administrative violations in case of extension after the charter capital contribution time limit

In case of submitting an extension application after the charter capital contribution period, the enterprise shall be administratively sanctioned or may have its investment registration certificate revoked.

Within 7 working days, the Department of Planning and Investment will examine the dossier and issue a notice of transfer of the dossier to the Inspection Department of the Department for work related to the failure to comply with the capital contribution schedule.

After the application is transferred to the Inspection Department, the investor waits to receive the Job Offer. When coming to work, investors need to prepare documents as follows:

• Letter of invitation from the Inspection Department;
• Copy of investment registration certificate, enterprise registration certificate;
• Documents proving the status of charter capital contribution of foreign capital company;
• An explanation for failure to contribute sufficient capital on time
• Other documents required by the Inspection Department.
• Power of attorney for Viet An Law Firm on behalf of the work.

Deadline for settlement

• The person competent to sanction administrative violations must issue a decision to sanction administrative violations within 07 days from the date of making a record of administrative violations.
• Based on the explanation dossier and consideration of the violating contents, the inspection agency will decide on the appropriate fine.
• After receiving the Decision on sanctioning administrative violations, the investor goes to the State Treasury to pay the fine and provide back documents proving the payment of the fine so that the Inspection Department can complete the dossier and transfer it back to the Foreign Economic Department for further processing of the dossier of extension of the time limit for capital contribution.

If foreign capital enterprises wishing to contribute charter capital or investment capital, please contact Viet An Law Firm for the fastest support!