Capital contribution ratio of foreign investors in Vietnam

One of the conditions that foreign investors need to determine is the capital ownership ratio when investing in Vietnam. Determining 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. With this content, Viet An Law Firm has some legal opinions on the capital contribution ratio of foreign investors as follows.

Legal basis

• The Law on investment 2020;
• The Law on Enterprises 2020;
• Decree 31/2021/NĐ-CP dated March 26, 2021;
• Decree 01/2021/NĐ-CP dated January 04, 2021;
• Schedule of WTO commitments and related international treaties.

Restrictions on capital ownership ratio of foreign investors

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

• In case multiple foreign investors contribute capital to purchase shares or stakes in a business organization that is regulated by one or some investment-related international treaties, the total holdings of the foreign investors in the business organization must not exceed the highest limit imposed by one of those international treaties on holdings of foreign investors in a specific business line;
• In case multiple foreign investors from the same country contribute capital to purchase shares or stakes in a business organization, the total holdings of these investors must not exceed the limit prescribed by the international treaty applied to these investors;
• Securities laws that provide for foreign investors’ holdings differently shall apply to public companies, securities companies, securities investment fund management companies, securities investment funds, or securities investment companies.
• In case a business organization has multiple business lines that are regulated by investment-related international treaties that provide for foreign investors’ holdings differently, the foreign investors’ holdings in such business organization must not exceed the limit on foreign investors’ holding in the business line with the lowest limit.

Capital contribution ratio of industries and business lines

When determining capital contribution ratio need to base on the following information:

• Business line
• Investor’s nationality
• Investment method
• Scope of investment
• Participating Vietnamese partners

The investor has to determine the correct capital contribution ratio when investing in VietNam, please contact Viet An Law Firm for more detailed instructions.

Services establishing the company with foreign capital of Viet An Law Firm

• Consulting on the conditions for establishing a foreign-invested company: capital contribution ratio of foreign investors in Vietnam; conditions for business lines; project implementation location; Note the procedures before and after the establishment of a foreign-invested company;
• Consulting to choose the suitable company type for investors: limited liability company or joint-stock company;
• Consulting on opening a capital transfer account, capital contribution term;
• Consulting and guiding investors to prepare necessary documents to establish the company with foreign capital;
• Consulting, drafting company establishment documents for investors;
• Representing investors to work with the competent state agencies of Vietnam during the process of carrying out the procedures for establishing a company for investors (Apply for Investment Registration Certificate, Certificate of Investment Registration). business registration, business license, license according to specialized requirements, making the seal of the legal entity, the announcement of seal sample, procedures after company establishment;
• Comprehensive, regular advice, accounting services, tax law package of activities arising in the process of doing business in Vietnam for investors.