Foreign investors in Vietnam contribute capital with assets

Enterprise capital can be formed from different types of assets according to the provisions of law depending on the investor’s ability and investment needs. Many foreign investors are interested in choosing which assets to contribute capital to and the procedures to turn those assets into the company’s capital contribution. Viet An Law hereby would like to have some opinions on the matter of when foreign investors in Vietnam contribute capital with assets.

Types of assets contributed as capital by foreign investors

According to the provisions of Article 34 of the Enterprise Law 2020, enterprises with foreign investment capital can register and contribute capital with assets similar to enterprises with Vietnamese capital. Specifically:

• Capital contribution assets can be Vietnamese Dong, freely convertible foreign currencies, gold, land use rights, intellectual property rights, technology, technical know-how, and other assets that can be valued in Vietnamese Dong.
• Only individuals and organizations that are the legal owners or have legal use rights to the above-mentioned assets have the right to use that asset to contribute capital according to the provisions of law.

Procedures for foreign investors in Vietnam contribute capital with assets

According to the provisions of the Enterprise Law 2020, the time limit for capital contribution to the company is 90 days from the date of issuance of the Enterprise Registration Certificate. Therefore, after being granted the Enterprise Registration Certificate, the company must develop a capital contribution plan in accordance with the provisions of law.

For assets contributed as capital that are not Vietnamese Dong, freely convertible foreign currencies, or gold

For capital contributions other than Vietnamese Dong, freely convertible foreign currencies, or gold, investors should follow these steps:

Step 1: Asset valuation

There are two methods of asset valuation as follows:

• Members and founding shareholders set prices;
• Professional valuation organization conducts valuation.

Principles when valuing assets contributed as capital:

Assets contributed as capital when establishing an enterprise must be valued by members and founding shareholders according to the principle of consensus or by a professional valuation organization. In case a professional appraisal organization determines the value of contributed assets must be approved by the majority of members and founding shareholders.

Assets contributed as capital during the course of operations are determined by the owner, the Board of Members for companies limited and partnerships, the Board of Directors for joint stock companies, and capital contributors by agreement on valuation or appraised by a professional valuation organization. In case a professional appraisal organization determines the value, the value of contributed assets must be approved by the capital contributor and the enterprise.

Step 2: Transfer ownership of contributed assets

Members contributing capital with assets of limited liability companies, partnerships, and shareholders of joint stock companies must transfer ownership of assets contributed as capital to the company according to the provisions of Clause 1, Article 35 of the Law on Enterprises 2020:

• For assets with registered ownership or land use rights, the capital contributor must carry out procedures to transfer ownership of that asset or land use rights to the company according to the provisions of law. The transfer of ownership and land use rights for assets contributed as capital is not subject to registration fees;
• For assets whose ownership rights are not registered, capital contribution must be made by handing over and receiving the contributed assets with confirmation by minutes, except in cases where it is done through an account.

Some things to note when making capital contributions using assets

• The asset handover record must ensure all the following contents as prescribed:
  • Name and address of the company’s headquarters;
  • Full name, contact address, legal document number of the individual, legal document number of the capital contributor’s organization;
  • Type of assets and number of units of assets contributed as capital; total value of assets contributed as capital and the ratio of the total value of that asset in the company’s charter capital;
  • Delivery date; Signature of the capital contributor or authorized representative of the capital contributor and legal representative of the company.
• Capital contribution is only considered fully paid when the legal ownership of the contributed assets has transferred to the company.

Service open a company has foreign investment capital of Viet An Law

• Consult conditions open a company foreign investment capital: capital contribution ratio of foreign investors in Vietnam; business conditions of various industries; project implementation location; Note the procedures before and after establishing a foreign invested company;
• Consulting on choosing the right type of company for investors: Company Limited or Joint Stock Company;
• Consulting on opening a capital transfer account, capital contribution deadline;
• Consulting and guiding investors to prepare necessary documents to establish foreign-invested companies;
• Consulting and drafting company establishment documents for investors;
• Investor representative works with competent Vietnamese state agencies during the process of implementing company establishment procedures for investors (Application for Investment Registration Certificate, Enterprise Registration Certificate, business license, license according to specialized requirements, making legal entity seals, announcing seal samples, procedures after establishing a company,…);
• Comprehensive, regular consulting, accounting services, tax law package of activities arising during the process of doing business in Vietnam for investors.