Capital is all the assets and material values invested by an enterprise to conduct business activities. Is the monetary expression of all assets of an enterprise used for business activities to make a profit. When establishing a company, investors must determine the scope, scale, and business lines to determine the source of capital to contribute to the business. For foreign investors, in addition to determining the level of business capital, how to bring capital into Vietnam in accordance with Vietnam’s regulations on foreign exchange management. So, can foreign investors in Vietnam contribute capital in cash? Viet An Law hereby will give some legal opinions on whether foreign investors can contribute capital in cash.
Capital contribution is the contribution of assets to form the company’s charter capital, including capital contribution to set up a company or contribute additional charter capital of an established company.
According to the provisions of the Enterprise Law, assets contributed as capital are Vietnamese Dong, convertible foreign currencies, gold, land use rights, intellectual property rights, technology, technical know-how, and other assets that can be priced in Vietnam Dong.
For economic organizations with foreign investment capital, foreign investors and Vietnamese investors in joint ventures are allowed to contribute investment capital in foreign currency and Vietnamese Dong according to the investor’s capital contribution level. in the Investment Registration Certificate, License for establishment and operation in accordance with specialized laws (for enterprises with foreign direct investment established and operating in accordance with specialized laws), Notice of meeting the conditions for capital contribution, share purchase, repurchase of capital contributions from foreign investors, PPP contract signed with a competent state agency, other documents proving the capital contribution of foreign investors in accordance with the provisions of law.
According to the provisions of Clause 1, Article 3 of Circular 06/2019/TT-NHNN, foreign investors include individuals with foreign nationality, organizations established under foreign law carrying out investment activities. foreign direct entry into Vietnam.
Direct investment activities are determined as follows:
According to the provisions of Clause 3, Article 4 of Circular 06/2019/TT-NHNN, “cash investment capital contributions of foreign investors and Vietnamese investors must be made through bank transfer to direct investment capital account”.
Thus, in cases of direct investment in Vietnam, foreign investors are required to contribute capital through transfer to a direct investment capital account. Therefore, foreign investors cannot contribute capital in cash when a company has foreign investment capital in Vietnam or contribute capital to Vietnamese companies.
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