How to contribute capital to Vietnamese company from abroad

According to the provisions of the Investment Law 2020, the Vietnam government has policies to encourage and facilitate investors to carry out business investment activities and develop economic sectors. Vietnam is in the process of integration and development, therefore, the Vietnamese State pays great attention to encouraging foreign investors to contribute capital to do business in Vietnam. However, the capital contribution of foreign investors must comply with the provisions of the current law. Viet An Law Firm will guide clients on how to contribute capital to Vietnamese company from abroad under Vietnamese law.

Legal basis

• Investment Law 2020;
• Decree 31/2021/ND-CP guiding the Investment Law;
• Enterprise Law 2020;
• Decree 01/2021/ND-CP on business registration;
• Circular 01/2021/TT-BKHDT guiding on business registration issued by the Minister of Planning and Investment.

Forms of capital contribution by foreign investors to Vietnamese companies

Investors are allowed to contribute capital to economic organizations and enterprises in Vietnam in the following forms:

• Purchase of initial public offering shares or additional issued shares of a joint stock company;
• Contribute capital to limited liability companies and partnerships;
• Contributing capital to other economic organizations not covered by the provisions of Point a and Point b of this Clause.

Procedures for foreign investors to contribute capital to Vietnamese companies

Step 1: Foreign investors register to contribute capital to Vietnamese companies

Foreign investors must carry out procedures to register capital contributions, purchase shares, or purchase capital contributions of economic organizations before changing members or shareholders if they fall into one of the following cases:

• Capital contribution increases the ownership ratio of foreign investors in Vietnamese companies operating in industries and professions with conditional market access for foreign investors;
• Capital contribution leading to foreign investors and economic organizations specified in Points a, b, and c, Clause 1, Article 23 of the Investment Law holding more than 50% of the charter capital of an economic organization in the following cases: increasing the charter capital ownership ratio of foreign investors from less than or equal to 50% to over 50%; increasing the charter capital ownership ratio of foreign investors when foreign investors already own more than 50% of the charter capital in an economic organization;
• Foreign investors contribute capital to economic organizations with Land Use Right Certificates in islands and borders, coastal communes, wards, and towns; and other areas that affect national defense and security.

Dossier of foreign investors contributing capital to Vietnamese companies

The registration document for capital contribution, share purchase, or capital contribution purchase includes the following contents: information on the business registration of the economic organization to which the foreign investor plans to contribute capital, purchase shares, or capital contribution; business lines; list of owners, members, founding shareholders, list of owners, members, and shareholders who are foreign investors (if any); the charter capital ownership ratio of the foreign investor before and after contributing capital, purchasing shares, or purchasing capital contributions to the economic organization; expected transaction value of the contract for capital contribution, share purchase, or capital contribution purchase; information on the investment project of the economic organization (if any);

• Copies of legal documents of individuals and organizations contributing capital, purchasing shares, purchasing capital contributions, and economic organizations with foreign investors contributing capital, purchasing shares, purchasing capital contributions;
• Agreement in principle on capital contribution, share purchase, capital contribution purchase between foreign investors and economic organizations with foreign investors contributing capital, purchasing shares, purchasing capital contributions or between foreign investors and shareholders or members of that economic organization;
• Copy of the Land Use Right Certificate of the economic organization with foreign investors contributing capital, purchasing shares, or purchasing capital contributions (in case the economic organization has a Land Use Right Certificate in an island, commune, ward, or border town and a coastal commune, ward, or town; or other areas that affect national defense and security).

Procedures for foreign investors to purchase capital contributions in Vietnamese companies

• Foreign investors submit their applications to the Department of Planning and Investment.
• Within 15 days of receipt of valid dossiers, the investment registration agency shall consider fulfilling the conditions for capital contribution, share purchase, and capital contribution purchase and notify the investor. The written notice shall be sent to foreign investors and capital-received economic organizations.
• In case a capital-received economic organization has a Certificate of Land Use Rights in an island, border commune, ward, or town, a coastal commune, ward, or town; or other areas that affect national defense and security, the investment registration agency shall carry out the following procedures:

a) Within 03 working days of receiving valid dossiers, the investment registration agency shall consult the Ministry of National Defense and the Ministry of Public Security on the satisfaction of the prescribed conditions.

b) Within 07 working days from the date of receipt of the request from the investment registration agency, the Ministry of National Defense and the Ministry of Public Security shall provide their opinions on the satisfaction of conditions for ensuring national defense and security for economic organizations with foreign investors contributing capital, purchasing shares, or purchasing capital contributions; if no opinion is provided within the required time limit, it shall be deemed that they have agreed to the satisfaction of conditions for ensuring national defense and security for economic organizations with foreign investors contributing capital, purchasing shares, or purchasing capital contributions;

c) Within 15 days from the date of receipt of valid dossiers, the investment registration agency shall consider the fulfillment of the conditions for capital contribution, share purchase, and capital contribution purchase according to regulations and, based on the opinions of the Ministry of National Defense and the Ministry of Public Security, notify the investor. The written notice shall be sent to foreign investors and economic organizations with foreign investors contributing capital, purchasing shares, or purchasing capital contributions.

Step 2: Foreign investors contribute capital to Vietnamese enterprises

• In case the foreign investor has a total adjusted capital contribution ratio of 50% or more: The Vietnamese company opens a direct investment capital account. The investor transfers capital through the direct investment capital account.
• In case a foreign investor has a total capital contribution ratio of less than 50%: The foreign investor opens an indirect investment capital account in the investor’s name and transfers capital contributions through this account.

Step 3: Change the Enterprise Registration Certificate (increase charter capital) submitted to the Business Registration Office – Department of Planning and Investment

Documents that Vietnamese Enterprises and Foreign Investors need to prepare to record foreign investors in the Enterprise Registration Certificate

• Notice of change in business registration content signed by the legal representative of the enterprise;
• Resolutions and decisions of the company owner for a single-member limited liability company; resolutions, decisions and meeting minutes of the Board of Members for a limited liability company with two or more members, a partnership company, and of the General Meeting of Shareholders for a joint stock company on changing the charter capital;
• Document of the Investment Registration Authority approving the capital contribution, share purchase, and capital contribution purchase of foreign investors and foreign-invested economic organizations in cases where it is required to carry out procedures for registration of capital contribution, share purchase, and capital contribution purchase according to the provisions of the Investment Law.
• Letter of Introduction/Power of Attorney
• Applicant’s legal documents

Procedures for changing business registration/enterprise

• Enterprises submit 01 set of documents to the Business Registration Office.
• Within 03 working days from the date of receiving valid documents, the Business Registration Authority shall issue a new Enterprise Registration Certificate to the enterprise.

Clients who need to use the service of foreign investors contributing capital to Vietnamese companies, or need guidance about how to contribute capital to Vietnamese company from abroad please contact Viet An Law Firm to receive the fastest and best support from experienced and specialized lawyers and experts!

Update: 9/2024