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Procedure extend the term for investment capital contribution

For the company with foreign capital, the investor has to create a foreign direct investment account (account for fund transfer) at the Bank and perform make fully capital contribution via its account within the deadline recorded in the Investment registration certificate after issuing the Investment registration certificate.

Capital contribution on time is very important because if it is overdue the deadline for capital contribution specified in the Investment Registration Certificate, The Bank will not allow receiving investment capital, the company can’t able to receive investment capital to conduct operations. However, capital contribution on time depends on a lot of factors and always happen overdue the deadline. The investor has to perform the procedure to extend the term for investment capital contribution (the contents have been recorded in the Investment registration certificate) or the procedures for adjusting the investment registration certificate. Viet An Law Firm provides the contents related to the procedures for extending capital contribution to foreign-invested companies.

Legal basis of the procedure for extending capital contribution to foreign-invested companies.

  • The Law on investment 2020;
  • Decree no 31/2021/NĐ-CP guiding the Law on investment;
  • Decree no 50/2016/NĐ-CP stipulated penalties for administrative violations against regulations on planning and investment.

Procedure on penalties for administrative violations against regulations on planning and investment.

Implementation process

The deadline for capital contribution is stipulated in the Investment registration certificate, in case of capital contribution is not on time, the company needs to contact the inspection authority to perform sanctioning procedures. The inspection authority will issue a sanctioning decision for the error of not fully contributing capital. After getting the decision, the company will pay a fine and perform the procedure for adjusting the Investment registration certificate to record the new capital contribution deadline or reduce the investment capital if it is not possible to contribute capital according to the deadline recorded in the decision of the inspection authority.

Document for penalties for administrative violations due to overdue the deadline of capital contribution

  • A written explanation for the violation of the deadline of capital contribution
  • A copy of the Investment registration certificate, Business registration certificate;
  • Documents proving on capital contribution situation of the investor;
  • Other documents at the request of the inspection authority.

Deadline for settlement

Within 07 days from the date of making the minutes of administrative violations, The persons entitled to impose penalties have to issue the decision to sanction administrative violations

Penalties for administrative violations due to overdue the deadline of capital contribution

According to article 13, Decree 50/2016/NĐ-CP stipulated on penalties for administrative violations against regulations on planning and investment: A fine of VND 20,000,000 – VND 30,000,000 shall be imposed for any of the following violations:

  • Failure to follow procedures for registration of capital contribution, purchase of capital contributions/shares of a business organization;
  • Failure to follow procedures for investment project adjustment;
  • Extending the duration of project execution or investment without submitting a written proposal to the investment registration authority or such proposal is not approved in writing by the investment registration authority;

According to the explanation document and considering the content of the violation, the inspection authority will decide on an appropriate fine

Procedure for extending capital contribution to foreign-invested companies.

The document needs to be prepared:

The document register extending capital contribution to foreign-invested companies includes:

  • An application form for adjustment of the investment project
  • A report on investment project’s progress by the time of adjustment;
  • The investor’s decision/the minutes of the meeting of the Board of Members/ the General Meeting of Shareholders/Owner of the economic organization on investment project adjustment;
  • Explanation of reasons for adjustment of investment projects;
  • A copy of the Decision on approval (adjustment) of the investment policy or the Decision on approval (adjustment) of the investor or the Decision on approval (adjustment) of the investment policy concurrently with the investor approval or Certificate receive investment registration/investment certificate/investment license/business license;
  • Other documents related to adjustment: confirmation on the amount of contribution capital; prove the financial capacity of the insufficiently contributed investment capital;
  • Authorization letter in case of the investor does not directly submit the document;

Notes: For projects subject to investment policy decision, when adjusting the investment project related to the objective, project location, main technology, increase or decrease investment capital over 10% of total investment capital, implementation duration, change of investor, or change of conditions for the investor (if any), the investment registration authority shall perform the procedures for deciding on investment policies before amending the Investment Registration Certificate.

Competent authority

  • Management boards of industrial parks, export-processing zones, hi-tech zones, and the economic zone shall issue, adjust and revoke investment registration certificates concerning the investment projects located therein;
  • Departments of Planning and Investment shall issue, adjust and revoke investment registration certificates concerning the investment projects outside industrial parks, export-processing zones, hi-tech zones, and economic zones;

Be stipulated in Article 39 of the Law on Investment in 2020.

Processing time for issuance of investment registration certificates:

Within 10 days from the receipt of the valid application, the investment registration authority shall adjust the investment registration certificate, record the new investment capital contribution time for investors.

Some questions related to the procedure for extending capital contribution to foreign-invested companies

Where is the time limit for capital contribution in a foreign-invested company?

The deadline for capital contribution in a foreign investment company is stipulated in the investment registration certificate.

How long does it take to contribute capital to a foreign company?

Within 90 days from the issuance date of the Certificate of Enterprise Registration, the company has to contribute sufficient and correct assets as promised.

Can the investment capital contribution be extended when overdue the deadline of capital contribution?

Before the expiration of the deadline for investment capital contribution, the investors need to submit the document to extend the deadline. In case the extension of the deadline for capital contribution expires, the investor may not be approved by the investment registration authority. The investors have to perform inspection and sanction procedures for failing to comply with the project implementation schedule and for not adjusting the investment registration certificate.

Clients interest in the procedure for extending capital contribution to foreign-invested companies.,please contact Viet An Law Firm directly for detailed advice.

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