Capital contribution ratio of foreign investors in Vietnam

One of the conditions that foreign investors need to determine when investing in Vietnam is the capital ownership ratio. The determination of the correct capital contribution ratio not only helps investors qualify for investment but also serves as the basis for determining the rights and obligations of investors in the company.

The following Viet An Law Firm has some legal opinions on the capital contribution ratio of foreign investors as follows:

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;
• WTO commitments and related international treaties.

Restrictions on capital ownership ratio of foreign investors in Vietnam

When investing in Vietnam, investors should note the following limitations to determine the specific capital contribution ratio:

• In case many foreign investors contribute capital, purchase shares or purchase capital contributions to an economic organization and are subject to one or more international treaties on investment, the total ownership ratio of all foreign investors in such economic organization must not exceed the highest percentage prescribed by one treaty International regulations on the percentage of foreign investors’ ownership of a specific industry or trade;
• In case many foreign investors belonging to the same country or territory contribute capital, purchase shares or purchase capital contributions to economic organizations, the total ownership ratio of all such investors must not exceed the ownership ratio specified in international investment treaties applicable to such investors;
• For public company, securities company, securities investment fund management company or securities investment funds, securities investment company in accordance with the law on securities, in case the law on securities provides otherwise for the ownership ratio of foreign investors, the provisions of the law on securities shall be complied with;
• In case an economic organization has many business lines and treaties on investment contain different provisions on the foreign investor’s ownership ratio, the foreign investor’s ownership ratio in that economic organization shall not exceed the restriction on the foreign ownership ratio for the business line, The profession has the lowest foreign ownership rate restrictions.

Detailed capital contribution ratio of business lines in Vietnam

When determining the capital contribution ratio, it is necessary to rely on the following information:

• Business lines
• Investor Citizenship
• Forms of investment
• Operating range
• Vietnamese partners participate

Investors need to determine the exact percentage of their capital contribution when investing in Vietnam, please contact Viet An Law Firm directly for more detailed instructions.

Services of establishing foreign capital company of Viet An Law Firm

• Advising on conditions for establishing a foreign capital company: capital contribution ratio of foreign investors in Vietnam; business conditions for trades; project implementation location; note the procedures before and after the establishment of a foreign capital company;
• Advising on choosing the right type of company for investors: Limited company or joint stock company;
• Advising on opening a capital transfer account, capital contribution duration;
• Consulting and guiding investors to prepare necessary documents to establish a foreign capital company;
• Advising and drafting company establishment documents for investors;
• Representing investors to work with competent state agencies of Vietnam in the process of carrying out company establishment procedures for investors (Application for Investment Registration Certificate, Business Registration Certificate, Business License,  License according to specialized requirements,  make legal entity seals, announce seal samples, procedures after company establishment,…;
• Comprehensive, regular consultancy, accounting services, tax law package of activities arising in the process of conducting business in Vietnam for investors.