After completing the procedures for setting up a company, one of the next important jobs is to open a bank account. For foreign-invested company, the Direct Investment Capital Account is indispensable. This account is a payment account in foreign currency or in Vietnam dong opened by a foreign direct investment enterprise or foreign investor at an authorized bank to conduct related transactions. related to foreign direct investment activities in Vietnam according to the provisions of law. Viet An Law hereby would like to give some legal opinions related to the direct investment capital account.
Legal basis
- Law on the State Bank of Vietnam 2010
- Law on Credit Institutions 2010 as amended and supplemented in 2017.
- Ordinance on Foreign Exchange 2005 as amended and supplemented in 2013
- Circular 06/2019/TT-NHNN.
Case requited to open a direct investment capital account of FDI enterprises in Vietnam
Foreign direct investment enterprises include:
- Enterprises established in the form of investment to establish economic organizations, in which foreign investors are members or shareholders, and must carry out procedures for issuance of an Investment Registration Certificate in accordance with the provisions of law. investment law;
- Enterprises that are not established in the form of investment to establish economic organizations, in which foreign investors are members or shareholders, and must carry out the procedures for issuance of an investment registration certificate according to the provisions of law in which foreign investors own 51% or more of the enterprise’s charter capital, including:
- Enterprises in which foreign investors contribute capital, purchase shares or stakes to the enterprise (operating in business lines and investment lines with conditions or without conditions applicable to foreign investors) resulting in foreign investors owning 51% or more of the enterprise’s charter capital;
- Enterprises established after separation, merger or consolidation resulting in foreign investors owning 51% or more of the enterprise’s charter capital;
- Newly established enterprises in accordance with specialized laws;
- Project enterprises established by foreign investors to implement PPP projects in accordance with the law on investment.
Principles of investment capital contribution of foreign-invested companies
Foreign investors and Vietnamese investors may contribute investment capital in foreign currencies or VND according to the investor’s contributed capital at:
- Investment Registration Certificate
- License for establishment and operation in accordance with specialized laws (for foreign direct investment enterprises established and operating under specialized laws)
- Notice of satisfaction of conditions for capital contribution, share purchase, and redemption of contributed capital by foreign investors
- PPP contract signed with the competent state agency
- Other documents evidencing the capital contribution of foreign investors in accordance with the provisions of law.
Opening and using a direct investment capital account of FDI enterprises in Vietnam
- Only businesses mentioned in the applicable object section of this article are allowed to open direct investment capital accounts.
- The contribution of investment capital in cash by foreign investors or Vietnamese investors must be made through a transfer to the direct investment capital account.
- A foreign currency direct investment capital account must be opened at 01 (one) authorized bank to conduct lawful foreign currency revenue and expenditure transactions related to foreign direct investment activities in Vietnam.
- Corresponding to the type of foreign currency in which capital contribution is made, only 01 (one) direct investment capital account in that foreign currency may be opened at 01 (one) authorized bank.
- In case of investment in Vietnam dong, 01 (one) direct investment capital account in Vietnam dong is allowed at an authorized bank where the foreign currency direct investment capital account has been opened to perform the following transactions: lawful revenue and expenditure transactions in Vietnam dong related to foreign direct investment activities in Vietnam.
- Direct investment capital accounts at other authorized banks may only be used to conduct revenue and expenditure transactions according to regulations.
Revenue and expenditure transactions are made through the direct investment capital account
Collected transactions:
- Collection of remittances for direct investment capital contributions in foreign currencies from foreign investors, Vietnamese investors in foreign direct investment enterprises, foreign investors participating in BCC contracts, investors foreign investors directly implement PPP projects;
- Collecting and transferring the payment for the transfer value of investment capital and investment projects as prescribed in Article 10 of Circular 06/2019/TT-NHNN;
- Collecting foreign currency transfers purchased from authorized credit institutions to transfer capital, profits and lawful revenues abroad according to the provisions of Circular 06/2019/TT-NHNN;
- Remittances from foreign currency payment accounts opened at authorized banks of foreign direct investment enterprises, foreign investors participating in BCC contracts, and direct foreign investors PPP projects to transfer capital, profits and lawful revenues abroad to foreign investors;
- Collecting foreign currency conversion to make investment capital contribution in case the currency of capital contribution is different from the currency of the opened direct investment capital account;
- Collecting and transferring share capital surplus from the issuance of new shares to increase charter capital in foreign-invested enterprises;
- Collecting foreign currency transfers earned from domestic sales of petroleum products (after fulfilling financial obligations and deducting expenses in Vietnam dong) in accordance with the law on oil and gas and Guarantee agreement and commitment of the Government (if any);
- Transfer revenues related to foreign loans of enterprises with foreign direct investment capital in accordance with the law on foreign borrowing and repayment of enterprises, except for the case specified in Clause 3, Article 5. Circular 06/2019/TT-NHNN;
- Other legal revenues in foreign currencies related to foreign direct investment activities in Vietnam.
Payment transactions :
- Expenses for transferring money to a foreign currency payment account opened at an authorized bank of the foreign direct investment enterprise, foreign investor participating in a BCC contract, and direct foreign investor PPP projects, the operator of the oil and gas project in accordance with the law on oil and gas to carry out foreign direct investment activities in Vietnam;
- Expenses to sell foreign currency to authorized organizations to transfer to the current account in Vietnam dong of the foreign direct investment enterprise, foreign investor participating in BCC contract, foreign investor. in addition to directly implementing PPP projects;
- Expenses for the payment of the transfer value of investment capital or investment projects to the overseas transferor or the sale of foreign currencies to pay for the transfer of investment capital or investment projects to the transferor in the foreign country. Vietnam dong in Vietnam Dong according to the provisions of Article 10 of Circular 06/2019/TT-NHNN;
- Expenses for remittance of profits and lawful foreign currency revenues from foreign direct investment activities in Vietnam by foreign investors abroad;
- Expenses for transferring foreign currency direct investment capital abroad of foreign investors in case of reduction of investment capital, termination, liquidation, termination of operation of investment projects, BCC contracts, contracts PPP in accordance with the law on investment;
- Expenses for foreign currency conversion to transfer capital, profits and lawful revenues from outward direct investment activities in case the currency for transferring capital, profits and lawful incomes abroad is different from the currency. of the opened direct investment capital account;
- Transfer payments related to foreign loans in foreign currencies of enterprises with foreign direct investment capital in accordance with the law on foreign loans and repayment of enterprises, except for the case specified in Clause 1 of this Article. 3 Article 5 of Circular 06/2019/TT-NHNN;
- Other lawful payments in foreign currencies related to foreign direct investment activities in Vietnam.
Use direct investment capital account for capital transfer
The payment of the transfer value of shares and contributed capital in a foreign-invested enterprise shall be made as follows:
- Between non-resident investors or between resident investors not through a direct investment capital account;
- Between a non-resident investor and a resident investor must be done through a direct investment capital account.
Currency of valuation, payment of transfer value of investment capital, investment projects in foreign direct investment activities in Vietnam:
- The valuation and payment of the transfer value of investment capital or investment projects between two non-residents may be made in foreign currencies;
- The valuation and payment of the transfer value of investment capital and investment projects between residents and non-residents and between residents must be made in VND.
Close direct investment capital account
Foreign-invested enterprises (in the following cases: Enterprises in which foreign investors contribute capital, purchase shares or stakes to the enterprise, resulting in foreign investors owning 51% or more of the charter capital; enterprises established after the separation, merger or consolidation resulting in foreign investors owning 51% or more of the charter capital of the enterprise), the investment capital account must be closed. Foreign investors who are non-residents who own shares or contributed capital in this enterprise open an indirect investment capital account to conduct revenue and expenditure transactions in accordance with regulations on foreign exchange management for foreign indirect investment activities in Vietnam in the following cases:
- After carrying out a transaction to transfer shares or contributed capital or issue additional shares to increase charter capital in a foreign-invested enterprise, the percentage of share ownership and contributed capital of the investor shall be decreased below 51%;
- After the foreign direct investment enterprise is a public company whose shares are listed or registered for trading on the Stock Exchange
- According to usage needs, enterprises shall close the direct investment capital account when the direct investment capital account is no longer in use.
Procedures for closing direct investment capital accounts shall comply with the regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank) on the opening and use of payment accounts at payment service providers. maths.
Service of opening a direct investment capital account of FDI enterprises in Vietnam of Viet An Law
- 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; pay attention to the procedures before and after the establishment of a foreign-invested company;
- Consulting to choose the right type of company for investors: Limited Company or Joint Stock Company;
- Advice on opening a capital transfer account, capital contribution term;
- Consulting and guiding investors to prepare necessary documents to establish a foreign-invested company;
- Consulting, drafting company establishment documents for investors;
- Representing investors to work with competent Vietnamese state agencies in the process of carrying out the procedures for establishing a company for investors (Apply for Investment Registration Certificate, Enterprsie Registration Certificate, business licenses, permits according to specialized requirements, making seals of legal entities, announcing seal samples, 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.
