Investing abroad means investors transferring the capital, payment to buy part or all of a business; or establishing ownership rights to carry out investment and business activities outside the territory of Vietnam; at the same time, directly participating in the management of that investment activity. To open, use, and close an offshore investment capital account in Vietnam, customers can refer to some of Viet An’s legal opinions in this article as follows.
Legal basis
Law on the State Bank of Vietnam dated June 16th, 2010;
Law on Credit Organizations dated June 16th, 2010, and the Law amending and supplementing several articles of the Law on Credit Organizations dated November 20th, 2017;
Foreign Exchange Ordinance dated December 13th, 2005, and the Ordinance amending and supplementing several articles of the Foreign Exchange Ordinance dated March 18th, 2013;
Law on Investment 2020;
Decree No. 31/2021/ND-CP dated March 26th, 2021;
Circular No. 12/2016/TT-NHNN dated June 29th, 2016.
Investors carrying out investment activities abroad include
Enterprises are established and operated according to the provisions of the Law on Enterprises and Law on Investment.
Cooperatives and unions of cooperatives are established and operated according to the provisions of the Law on Cooperatives.
Credit organizations are established and operated according to the provisions of the Law on Credit Organizations.
Business households registered by Vietnamese law.
Individuals with Vietnamese nationality, except for the cases specified in Clause 2, Article 17 of the Law on Enterprises.
Other organizations have performed the investment by Vietnamese law.
Sources of offshore investment capital include money and other legal assets of investors, including the owner’s capital, loans transferred abroad in Vietnam, and profits earned from offshore investment projects that are retained to carry out investment activities abroad.
An offshore investment capital is used to contribute capital, lend capital for foreign economic organizations, pay for shares, purchase capital contributions, and fulfill arising guarantee obligations (if any) to implement the investment abroad in the forms specified in the Law on Investment. Capital amounts transferred abroad, when recovered and transferred back to the country, are not included in the capital transferred abroad.
An offshore investment capital account is a payment account in foreign currencies or a payment account in Vietnamese Dong of an investor opened at a licensed credit organization in Vietnam to carry out revenue and expenditure transactions according to regulations of Vietnamese law when investors conduct investment activities abroad.
Principles for opening and using investment capital accounts
The opening and using of capital accounts must comply with the following principles:
After being granted an Offshore Investment Registration Certificate, the investor must open 01 (one) investment capital account in 01 (one) foreign currency suitable to the need to transfer the investment capital abroad in 01 (one) credit organization is allowed and registered for foreign exchange transactions related to overseas investment activities with the State Bank according to regulations.
In case of transferring the investment capital abroad in Vietnamese Dong, the investor is allowed to open and use 01 (one) investment capital account in Vietnamese Dong and 01 (one) investment capital account in foreign currency at 01 (one) credit organization licensed and registered for foreign exchange transactions related to overseas investment activities with the State Bank according to the provisions.
Investors with many investment projects in foreign countries must open a separate investment capital account for each project.
In case an overseas investment project involves many investors, each investor must open a separate investment capital account to transfer the capital abroad within the total investment capital and the contributed capital ratio according to an Offshore Investment Registration Certificate issued by a competent Vietnamese agency.
After confirming the foreign exchange transaction registration by the State Bank, all revenue and expenditure transactions according to the provisions of Article 6 and Article 7 of this Circular must be performed through the investment capital account.
Procedures for opening and closing an offshore investment capital account in Vietnam
Procedures for opening and closing investment capital accounts comply with the State Bank’s regulations on opening and using payment accounts at an organization that provides the payment service.
Procedures for registering foreign exchange transactions related to investment activities abroad
Investors must register foreign exchange transactions related to overseas investment activities with the State Bank:
After an Offshore Investment Registration Certificate has been issued by the competent authority, the investor’s Offshore Investment Registration Certificate is still valid according to the provisions of law;
After the investment activity has been approved or licensed by the competent authority of the investment-receiving country or after the investor has issued documents proving the right to invest in the investment-receiving country compliance with the regulations of the investment-receiving country;
After opening an investment capital account at an authorized credit organization according to regulations and before transferring the investment capital abroad.
Investors send directly or by post 01 (one) set of the foreign exchange transaction registration dossier related to overseas investment activities to the State Bank branch in the province or city where the investor is not a credit organization with its head office or where the investor is an individual with the permanent residence registration or where another investor registers for business to confirm the registration, or registers for changes in foreign exchange transactions related to the overseas investment activity for investors who are not credit organizations.
The State Bank is responsible for confirming or refusing to confirm the foreign exchange transaction registration related to overseas investment activities within 10 working days from the date of receipt of a complete and valid dossier from the investor.
The foreign exchange transaction registration dossier related to overseas investment activities
The foreign exchange transaction registration dossier related to overseas investment activities includes:
Application for registration of foreign exchange transactions related to overseas investment activities
A copy issued from an original or a certified copy or a copy accompanied by the presentation of the original for comparison with the Investment License Offshore Investment Certificate or Offshore Investment Registration Certificate issued by a competent Vietnamese agency. In case the applicant submits a copy and presents the original for comparison, the comparer is responsible for confirming the accuracy of the copy compared to the original.
A foreign language copy, Vietnamese translation (with confirmation of the investor on the accuracy of the copy and translation) of the investment approval or licensing written issued by the competent authority of the investment-receiving country or documents proving the right to invest in the investment-receiving country by the provisions of the law of the investment-receiving country.
An original of written confirmation of an authorized credit organization regarding the opening of the investor’s investment capital account, clearly stating the account number and type of foreign currency.
An original written confirmation of an authorized credit organization on the amount of money that the investor has transferred abroad before being granted the Offshore Investment Registration Certificate to satisfy costs for project formation activities in foreign countries according to the provisions of law in cases where the investment capital has been transferred abroad before being granted an Offshore Investment Registration Certificate.
Written explanation about the need to transfer the investment capital abroad in Vietnamese Dong in case of transferring the investment capital abroad in Vietnamese Dong.
Change the investment capital account to another foreign currency or change a credit organization
In case of changing the investment capital account in another foreign currency or changing the authorized credit organization where the investment capital account is opened, the investor should perform the following steps:
Open an investment capital account in another foreign currency or an investment capital account at another licensed credit organization;
Register for changes in foreign exchange transactions related to overseas investment activities with the State Bank according to regulations;
Within 05 (five) working days from the date the State Bank confirms the registration to change the investment capital account, the investor must transfer the entire balance of the currently used investment capital account to the new investment capital account. After the above deadline, the licensed credit organization where the investor is using the investment capital account, will not allow the investor to use this account to perform the revenue and expenditure transactions according to regulations;
Investment capital accounts in other foreign currencies, and investment capital accounts at other licensed credit organizations may only be used to carry out revenue and expenditure transactions prescribed by law.
Offshore investment services of Viet An Law
Consulting in advance on conditions, procedures, and forms of direct investment abroad;
Drafting the dossier for granting an Investment Certificate by customer requirements and legal regulations.
Submit the dossier and monitor the dossier’s progress at competent state agencies;
Apply for granting an Investment Certificate to implement overseas investment projects for enterprises;
Consulting on conditions and principles for opening capital accounts;
Consulting on procedures related to opening, using, and registering foreign exchange transactions.
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