Procedures of purchasing company shares in Vietnam

According to current legal provisions, foreign investors have the right to contribute capital, purchase shares and contributed capital to Vietnamese companies. Viet An Law Firm sends to customers a summary of the regulations on foreign investors contributing capital to purchase shares and capital contributed to enterprises in Vietnam as follows.

Forms of capital contribution, share purchase, stake purchase of foreign investors

• Purchase of first-time issued shares or additional issued shares of a joint-stock company;
• Contribute capital to limited liability companies, partnerships;
• Purchase of shares of a joint-stock company from the company or shareholder;
• Purchase capital contributions of members of limited liability companies to become members of limited liability companies;
• Purchase capital contribution of capital contributors in the partnership to become capital contributing members of the partnership;
• Contributing capital, purchasing capital contributions of members of other economic organizations other than those mentioned above.

Cases of foreign investors to contribute capital and purchase company shares in Vietnam

Case 1: In case foreign investors contribute capital, purchase contributed capital, purchase shares at the rate of 50% or less in enterprises in Vietnam, invest in business lines without conditions.

Investors make capital contribution / capital transfer, declare income tax from transfer

Enterprises only need to carry out procedures for changing the Enterprise Registration Certificate (previously called procedures for changing business registration).

Documents to prepare

1. Notice of change of business registration contents;
2. Decision on the change of the company;
3. Minutes of the meeting on the change of company;
4. The transfer contract and documents certifying the completion of the transfer are certified by the legal representative of the company;
5. List of capital contributors or List of shareholders being foreigners;
6. Notarized copy of passport / Enterprise registration certificate of the investor.

Procedures for foreign investors to contribute capital, purchase shares, purchase contributed capital at the rate of 50% or less of charter capital of enterprises in Vietnam, invest in business lines without conditions

Enterprises submit documents at the Business Registration Agency

Within 03 working days after receiving a valid dossier, the Business Registration Agency shall issue a new Enterprise Registration Certificate.

Case 2: In case a foreign investor contributes capital, purchases shares, stakes for business investment in conditional industries or in case a foreign investor contributes capital, purchases shares or stakes by a Vietnamese company, resulting in the foreign investor holding more than 50% of charter capital.

Step 1: Register for capital contribution, purchase shares, stakes in Vietnamese enterprises at the Investment Registration Agency

Procedures for registration of capital contribution, purchase of contributed capital, purchase of shares of foreign investors in Vietnamese enterprises

Preparatory documents

1. A document of registration of capital contribution, share purchase or stake purchase includes the following contents: information on enterprise registration of economic organizations to which foreign investors plan to contribute capital, purchase shares or purchase stake; business lines; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); the percentage of ownership of charter capital of foreign investors before and after capital contribution, share purchase or purchase of contributed capital to economic organizations; expected transaction value of contracts for capital contribution, share purchase, purchase of contributed capital; information on investment projects of economic organizations (if any);
2. Copies of legal papers of individuals and organizations contributing capital, purchasing shares, purchasing stakes and economic organizations with foreign investors contributing capital, purchasing shares or purchasing stakes;
3. A written agreement in principle on capital contribution, share purchase or stake purchase between foreign investors and economic organizations in which foreign investors contribute capital, purchase shares or stakes or between foreign investors and shareholders or members of such economic organizations.
4. A copy of the land use right certificate of an economic organization in which foreign investors contribute capital, purchase shares or purchase stakes (in case the economic organization has a land use right certificate in islands, communes, wards, border towns and communes, coastal wards and towns; other areas affecting national defense and security);
5. Introduction letter, power of attorney for submission.

Implementation procedure:

Foreign investors submit dossiers at the Investment Registration Office;

• If the company is located in the industrial park, the Management Board of the industrial park.
• If the company is located outside the industrial park, the Department of Foreign Economic Affairs – Department of Planning and Investment of the province.

Within 15 working days after receiving a valid dossier, the Business Registration Agency shall issue a Notice of satisfaction of conditions for capital contribution, purchase shares, stakes into Vietnamese enterprises.

In particular, in case an economic organization has foreign investors contributing capital, purchase shares or stakes with land use right certificates in islands, communes, wards, border towns and coastal communes, wards and townships; In other areas affecting national defense and security, investment registration agencies shall carry out the following procedures:

• Within 03 working days from the date of receipt of a valid dossier, the investment registration agency shall collect opinions of the Ministry of National Defense and the Ministry of Public Security on the satisfaction of conditions to ensure national defense, security and land use conditions;
• Within 07 working days from the date of receipt of the written request of the investment registration agency, the Ministry of National Defense and the Ministry of Public Security shall comment on the satisfaction of conditions for ensuring national defense and security for economic organizations with foreign investors contributing capital, purchase of shares, stakes; After the time limit for requesting without comments, it is considered to have agreed to satisfy the conditions for ensuring national defense and security for economic organizations with foreign investors contributing capital, purchaseing shares or purchasing contributed capital;
• Within 15 days from the date of receipt of a valid dossier, the investment registration agency shall consider satisfying the conditions for capital contribution, purchase shares, stakes and base on the opinions of the Ministry of National Defense and the Ministry of Public Security to notify investors. Written notices shall be sent to foreign investors and economic organizations whose foreign investors contribute capital, purchase shares, stakes.

Step 2: Foreign investors make capital contribution, purchase shares, stakes and Vietnamese enterprises.

In case the foreign investor contributes more than 51% capital, the Vietnamese company shall open a direct investment capital account. Investors make capital contributions, transfer capital through direct investment capital accounts.

Capital transfer members and shareholders shall declare tax when transferring in accordance with the law on personal income tax, corporate income tax (if any);

Step 3: Change the Enterprise Registration Certificate to supplement foreigners in the business registration dossier submitted at the Business Registration Agency – Department of Planning and Investment

The sequence of implementation is similar to Case 1 stated above.

Step 4: Carry out procedures for applying for an Investment Registration Certificate for business lines requiring an Investment Registration Certificate (eg: training sector, educational services,…).

Preparatory documents

• A written request for implementation of an investment project;
• Documents on the legal status of the investor:

◦ For individual investors: Copy of citizen identification card, ID card or passport;

◦ For institutional investors: a copy of the Certificate of Incorporation or other equivalent document confirming legal status;

• An investment project proposal includes the following contents: investors implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, investment progress, labor demand, proposal for investment incentives, impact assessment, etc socio-economic efficiency of the project;
• A copy of one of the following documents:
  • Financial statements of the last 02 years of the investor;
  • Commitment of financial support of the parent company;
  • Commitment to financial support of the financial institution;
  • Guarantee on financial capacity of investors;
  • Documents explaining the financial capacity of the investor;
  • Proposing land use needs; in case the project does not request the State to allocate land, lease land, permit change of land use purpose, submit a copy of the site lease agreement or other document certifying that the investor has the right to use the location for the implementation of the investment project
  • Explanation on technology use includes: technology name, technology origin, technological process diagram; main specifications and usage status of machinery, equipment and main technological lines for projects using technologies on the List of technologies restricted from transferring
  • BCC contract for investment projects in the form of BCC contract.

Procedure for implementation:

Foreign investors submit dossiers at the Investment Registration Office;

• If the company is located in the industrial park, the Management Board of the industrial park.
• If the company is located outside the industrial park, the Department of Foreign Economic Affairs – Department of Planning and Investment of the province

Duration:

The investment registration agency shall grant the Investment Registration Certificate to the investor within 15 days from the date of receipt of a valid dossier when the project satisfies the following conditions:

1. Not falling into industries or trades prohibited from business investment as prescribed in Article 6 of the Law on Investment and international treaties on investment;
2. Having an investment project execution location determined on the basis of a valid copy of a document on land use right or a valid copy of the site lease agreement or other documents or documents determining the right to use the location for the implementation of the investment project;
3. The investment project conforms to the plannings specified in Clause 7 Article 31 of Decree 31/2021/ND-CP;
4. To satisfy the conditions on investment rate per land area prescribed by the People’s Committee of the province based on actual local conditions and approved by the Standing Committee of the provincial People’s Council (if any), the number of employees employed (if any);
5. Satisfy market access conditions for foreign investors.

Viet An Law is committed to providing you with consulting services for foreign investors to buy shares and contribute capital to Vietnamese companies. South fastest, most convenient and most reasonable cost! For any difficulties or problems related to the procedure, please contact  Viet An Law directly  for the fastest support!