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Foreign investors contribute capital to Vietnamese companies

In many recent years, the number of foreign investors into Vietnam has increased dramatically, many of whom choose to set up a new company to conduct their investment projects. Besides, some foreign investors choose to contribute capital, purchase shares and contributed capital beacause this way is easier for foreign invetors, they do not have to set up a new company from the beginning but still have rights corresponding to their capital contribution in the company which they contribute capital to. Therfore, Vietan law is willing to answer for you some basic questions that many foreign invertors wonder as belows:

How many forms of capital contribution, share purchase and capital contribution purchase are there?

  • Purchase shares at the initial public offering (IPO) or additional share issuance of a joint-stock company;
  • Contribute capital to limited liability companies and partnerships;
  • Buy shares of a joint stock company from a company or a shareholder;
  • Buy capital contributions of limited liability company members to become members of the limited liability company;
  • Buy capital contributions of limited partners in partnerships to become a limited partner of the partnerships;
  • Contribute capital to other economic organizations not falling into the cases prescribed above.

Are there any conditions for foreign investors to contribute capital?

  • Foreign investors contributing capital to Vietnamese companies must comply with the investment forms, scopes of activities, Vietnamese partners participating in the implementation of investment activities and other conditions in compliance with international treaties to which Vietnam is a signatory.
  • The ownership proportion of charter capital of foreign investors in Vietnamese companies is not limited, except for the following cases:
  • The ownership proportion of foreign investors in listed companies, public companies, securities-trading organizations and securities investment funds in accordance with the law on securities;
  • The ownership proportion of foreign investors in state-owned companies that have been equitized or converted are conformable with regulations on equitization and conversion of state-owned companies;
  • The ownership proportion of foreign investors who are not public companies, securities trading organizations, investment funds, state-owned enterprises shall comply with other relevant laws and international treaties to which Vietnam is a signatory.

Tips: Foreign inverstors should look up the limited proportions subject to separate bussiness lines on the National Bussiness Registration Portal.

Are the procedures of contributing capital to a company in Vietnam complex?

Firstly, you need to prepare a dossier including:

  • A written registration of capital contribution, share purchase or capital contribution comprising the following information: about economic organizations that foreign investors plan to contribute capital, purchase shares or contributed capital; ownership proportion of charter capital of foreign investors after contributing capital, buying shares, or buying contributed capital of economic organizations;
  • Notarized copies of ID card,  or passport for individuals; notarized copy of the Bussiness Registration Certificate or other equivalent documents certifying the legal status for institutional investors.

In case foreign investors register to contribute capital, purchase shares or purchase capital contribution to the company with 100% Vietnamese capital

Step 1: The investor submits a dossier at the Office of Investment – Department of Planning and Investment where the economic organization is headquartered to complete the procedures for registration of capital contribution, purchase of  shares and capital contribution to the Company with 100% Vietnamese capital.

If a dossier meets all the requirements, the Department of Planning and Investment will notify in writing within 15 days from the date of receiving the sufficient dossier so that investors can carry out procedures for changing shareholders and members under Law on Enterprise 2014. In case of failure to meet the requirements, the Department of Planning and Investment shall notify the investor in writing, clearly stating the reason.

Step 2: After gaining the approval of the Office of Investment – Department of Planning and Investment for foreign investors to contribute capital, purchase shares or capital contribution, investors shall carry out the following procedures: Open a direct investment account for a Vietnamese company if buying from 51% capital of a Vietnamese company, then the foreign investors will contribute capital and declare the transferred income tax.

Step 3: Conduct procedures for changing shareholders and members on the Business Registration Certificate (Enterprise Registration Certificate) in accordance with the regulations at the Business Registration authorities – Department of Planning and Investment. This step shall be conducted by the company.

In case foreign investors register to contribute capital, purchase shares, or purchase capital contribution to foreign-invested companies in Vietnam

Step 1: The investor submits the dossier to the Office of Investment – Department of Planning and Investment where the economic organization is headquartered to conduct procedures for registration of capital contribution, purchase of shares and capital contribution to the Company with foreign-invested capital.

Step 2: After gaining the approval of the Office of Investment – Department of Planning and Investment for foreign investors to contribute capital, purchase shares or capital contribution. If the company has not split the Investment Certificate into an Investment Registration Certificate and Enterprise Registration Certificate yet, the investor shall carry out the procedures for splitting and issuing the Enterprise Registration Certificate, making a new legal seal at Business Registration Office – Department of Planning and Investment.

Step 3: After obtaining the approval of the Office of Investment – Department of Planning and Investment to contribute capital, buy shares or capital contribution, the foreign investor shall carry out the following procedures: Open a direct investment capital account for a Vietnamese company if buying from 51% capital of a Vietnamese company, then the foreign investor will contribute the transferred capital and declare the transferred income tax.

Step 4: After splitting the Investment Registration Certificate and the Bussiness Registration Certificate, the investor shall adjust the Investment Registration Certificate at the Investment Registration authority.

Vietan law has shared for you some essential information about contributing capital to a company in Vietnam above. If you want to know procedures or regulations for more details, please contact to us to receive the assistance and consultations carefully via our telephone number or email. With the team of experienced lawyers, Vietan law is willing by your side to overcome all difficulties.

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