In the process of business to implement investment projects, many investors need to mobilize capital from abroad through foreign loans. Due to operational demands, investors want to convert borrowed capital into contributed capital of enterprises.
According to Clause 2, Article 34 of Circular No. 12/2022/TT-NHNN, foreign investors can completely transfer the borrowed debt into the contributed capital in the enterprise. Cases in which debt repayment is not carried out through foreign borrowing and foreign debt repayment accounts include:
Enterprises carry out adjustments to the Investment Registration Certificate, the Enterprise Registration Certificate regarding the increase of the investment capital or charter capital from capital sources being foreign short-term loans in accordance with the Law on Investment and the Law on Enterprises.
Enterprises shall report to the State Bank to manage the conversion of loans into the investment capital through traditional or electronic forms as prescribed.
Enterprises carry out adjustments to the investment registration certificate, the business registration certificate regarding the increase of the investment capital, charter capital from capital sources being foreign short-term loans in accordance with the Law on Investment, the Law on Enterprises.
Enterprises carry out procedures to register for loan changes at the State Bank according to the detailed process at article Procedures for changing registration of foreign loans in Vietnam of Viet An Law website.
Enterprises carry out procedure for registration of contributing capital /purchasing of shares, contributed capital of foreign investors in the enterprise under the Law on Investment.
Enterprises shall carry out procedures to increase the charter capital in accordance with the Law on Enterprises.
Enterprises carry out adjustments to the investment registration certificate, the enterprise registration certificate regarding the increase of the investment capital, charter capital from capital sources being foreign short-term loans in accordance with the Law on Investment, the Law on Enterprises.
Enterprises carry out procedures to register for loan changes at the State Bank.
Notes on medium and long-term foreign loans converted into the investment capital/charter capital
Legal regulations allow enterprises to convert legal foreign loans into the investment capital.
Enterprises need to carry out procedures related to investment (as prescribed by the law on investment) and procedures related to the foreign exchange (under the foreign exchange ordinance) to convert foreign loans into the investment capital.
Clients wish to consulting on registering foreign loans, converting foreign loans into the investment capital of enterprises, please contact Viet An Law for detailed support and provide a full service package.
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