Process of extending capital contribution of foreign-invested companies in Vietnam

Legal basis

• Law on Investment 2020;
• Law on Enterprise 2020;
• Decree 31/2021/ND-CP dated March 26, 2021;
• Decree 01/2021/ND-CP dated January 4, 2021;
• Decree 122/2021/ND-CP dated December 28, 2021

What is the extension of the charter capital contribution term?

Extension of the time limit for charter capital contribution is a very important procedure to record the new capital contribution deadline on the Investment Registration Certificate when the enterprise cannot make capital contribution on time. In case of failure to carry out the extension procedures before the expiration of the charter capital contribution period, investors will be sanctioned for administrative violations in the field of investment.

Timely capital contribution is considered extremely important because if it is overdue according to the time limit for capital contribution specified in the Investment Registration Certificate, the Bank will not allow to receive investment capital, the company will not be able to receive capital investment to operate. However, in case the investor fails to arrange to contribute capital on time, the investor needs to make an application to be extended the time limit for investment capital contribution.

Time limit for capital contribution to the charter capital of foreign-invested companies

Investors should note the following regulations on capital contribution:

• The term of capital contribution of foreign-invested companies is usually recorded in the Investment Registration Certificate.
• On the Investment Registration Certificate of foreign-invested companies, there are criteria for total investment capital, which includes contributed capital and other types as registered. As for the time limit for contributing charter capital, according to the provisions of the Law on Enterprises, the investor must make a full contribution within 90 days from the date of being granted the Enterprise Registration Certificate.
• The total investment capital stated in the Investment Registration Certificate shall be transferred from abroad to the investment capital account according to the time limit for capital contribution recorded in the Investment Certificate. If beyond the time limit recorded on the Investment Registration Certificate, the bank opening the capital account will refuse to receive the capital transferred into the account. Thus, at this time, in order to transfer capital to the investment account, the investor needs to carry out procedures for adjusting the Investment Certificate with the content of extending the time limit for capital contribution.

Process of extending capital contribution of foreign-invested companies in Vietnam

Step 1: Prepare an application to amend the Investment Registration Certificate

Dossier for adjustment of Investment Registration Certificate includes:

• A written request for adjustment of the Investment Certificate;
• Report on the implementation of investment projects up to the time of adjustment;
• Decision and valid copy of meeting minutes of the Members’ Council/General Meeting of Shareholders/the owner of the foreign-invested company on the adjustment of the investment project;
• Documents related to the adjustment: confirmation of the amount of invested capital contributed; prove the financial capacity of the insufficiently contributed investment capital;
• A certified copy of the issued Investment Registration Certificate;
• Power of Attorney in case the investor does not directly submit the application.

Step 2: Submit application for extension of charter capital contribution term

• After preparing the dossier, the investor submits the application to the competent investment registration agency.
• Investors declare online information about investment projects at the National Foreign Investment Information System and submit directly to the competent investment registration agency.
• Within 15 working days from the date of online declaration, the investor must submit an extension dossier to the Investment Registration Authority.

Step 3: Process the application and get the result

Within 10 days from the date of receipt of a valid dossier, the Investment Registration Authority shall amend the Investment Registration Certificate for the investor to record the time limit for contributing new charter capital to the investor.

Handling of administrative violations in case of extension after the time limit for charter capital contribution

In case of submitting the application for extension after the time limit for charter capital contribution, the enterprise will be administratively sanctioned or may have its investment registration certificate revoked.

Within 7 working days, the Department of Planning and Investment will check the dossier and issue a notice about transferring the dossier to the Department’s Inspection Department to work on the failure to comply with the capital contribution schedule.

After the dossier is transferred to the Inspection Department, the investor waits to receive the Invitation to work. When coming to work, investors need to prepare the following documents:

• Invitation letter from the Inspection Department;
• Copy of Investment Registration Certificate, Business Registration Certificate;
• Documents evidencing the situation of capital contribution to the charter capital of the foreign-invested company;
• Explanation of failure to contribute capital in full on time
• Other documents required by the Inspection Department.
• Power of Attorney for Law Viet An to act on behalf of.

Time limit for settlement

• Persons competent to sanction administrative violations must issue decisions on sanctioning administrative violations within 07 days from the date of making Record of administrative violations.
• Based on the explanation file and considering the content of the violation, the inspection agency will decide on an appropriate fine.
• After receiving the decision on sanctioning administrative violations, the investor will go to the State Treasury to pay the fine and provide documents proving the payment of the fine for the Inspection Department to complete the dossier and return it to the Economic Department. external relations to continue processing the application for extension of the capital contribution time limit.

Foreign-invested enterprises wishing to extend capital contribution of foreign-invested companies in Vienam, investment capital contribution, please contact Viet An Law for the fastest support!