Procedures to reduce the charter capital for FDI in Vietnam

The investment capital of a foreign-invested company (FDI company) is the capital that the investor commits to contribute according to the regulations and the term is recorded on the Investment Registration Certificate through the public capital account. The direct investment capital account is the required capital account with the FDI company, the purpose is for investors to contribute capital to this account and then transfer the money from this account to the charter capital to operate.

Charter capital is the total value of assets contributed or committed to contributing by the company’s members or owners when establishing a limited liability company; is the total value of shares sold or registered for purchase upon the establishment of a joint-stock company. The charter capital of the FDI company may be equal to or less than the investment capital registered by the company on the Investment Certificate.

Conditions for charter capital reduction of a foreign-invested company

         An FDI company is entitled to reduce capital if it is one of the following cases:

• The company has been in business for 2 or more consecutive years from the date of company establishment registration and has ensured the full payment of all debts and other property obligations after being repaid to members;
• The charter capital is not paid in full and on time by the members/owners/shareholders under the provisions of the Law on Enterprise 2020.

Documents need preparing when changing the charter capital of a foreign-invested company

• 01 notarized copy of the Investment Registration Certificate;
• Notice of changes to the company registration information signed by the company’s legal representative;
• A resolution, decision of the company owner for one-member limited liability companies; A resolution, decision and meeting report with two or more members; A resolution, decision and meeting report of the general meeting of shareholders for joint-stock companies on the change of charter capital;
• For a limited liability company two or more members need to submit:
  • A list of members of a limited liability company with two or more members;
  • 01 notarized copy of the latest financial statement at the time of the decision to reduce charter capital.

Changing the charter capital of a foreign-invested company process:

         Apply to change the Business Registration Certificate on National Business Registration Portal.

         Completion time: 03 – 05 working days.

         Customers need to pay attention to change the charter capital of a foreign-invested company.

• Capital reduction company is the case: The company has been doing business for 2 years or many consecutive years from the date of company establishment registration and has guaranteed to pay all debts and other property obligations after the refund payment to members: The company must contribute investment capital, charter capital in full and on time and be recorded in the financial statements of the business. The company is only entitled to partially return to members/shareholders in proportion to their contributed capital in the company’s charter capital.
• Capital reduction company in the case: The charter capital is not paid in full and on time by members/owners/shareholders according to the provisions of the Law on Enterprise 2020: The company reduces capital within 30 days from the last day the charter capital must be fully contributed.

Customers wishing to use the services of reducing the charter capital of a foreign-invested company (FDI) please contact Viet An Law for the fastest support!