FDI Company Investment Project Transfer Services in Vietnam

Along with the investment process, the need for project transfer between foreign investors or between foreign investors and domestic partners is also increasing. The FDI company investment project transfer services in Vietnam have therefore become a notable legal and business field, requiring transparency, compliance with legal regulations, as well as in-depth consulting capabilities. Understanding the processes, conditions, and challenges when performing this transfer activity is a key factor in helping the parties involved optimize benefits and limit legal risks. The following article by Viet An Law will provide the necessary information on this issue.

Cases of transferring FDI company investment projects

• Foreign investors sell all their capital contributions or shares to other investors;
• Transfer the entire licensed project;
• Merge or acquire with another enterprise.

To be eligible for transfer, the project must:

• Not violating the law, not being revoked or suspended;
• Fully fulfilling financial obligations (taxes, fees, land rent, etc.);
• Meeting the industry conditions for investors receiving transfers.

Conditions for transferring investment projects

Pursuant to Clause 1, Article 46 of the Investment Law 2020, the conditions for transferring investment projects are stipulated as follows:

Investors have the right to transfer all or part of the investment project to another investor when meeting the following conditions:

• Not falling into one of the following cases of termination of operations:
• The investor decides to terminate the investment project;
• According to the termination conditions stipulated in the contract and enterprise charter;
• The investment project’s term of operation expires.
• Satisfy investment conditions applicable to foreign investors in case foreign investors receive transfer of projects in investment sectors or professions with conditions applicable to foreign investors;
• Comply with the conditions prescribed by the law on land and the law on real estate business in case of project transfer associated with land use rights transfer;
• Conditions specified in the Investment Registration Certificate or other relevant legal provisions (if any).

In case of project transfer subject to issuance of Investment Registration Certificate, the investor shall submit a dossier as prescribed together with the investment project transfer contract to adjust the investor implementing the project.

This procedure also applies to investment projects operating under an Investment License, Investment Certificate or equivalent legal document. In this case, the Department of Finance shall issue an Investment Registration Certificate instead of the investment project content specified in the Investment License, Investment Certificate or equivalent legal document.

Regulations on transfer of FDI projects in Vietnam

Regulations on the transfer of foreign direct investment projects in Vietnam according to Article 10 of Circular 06/2019/TT-NHNN guiding foreign exchange management for foreign direct investment activities in Vietnam are as follows:

The payment for the transfer of the investment projects between investors in BCCs or investors who directly implement a PPP project shall be made as follows:

• Such payments between investor who are non-residents or between a non-resident investor and a resident investor in a BCC shall be made through direct investment accounts;
• Such payments between investors who are non-residents or between a non-resident investor and a resident investor who directly implement a PPP project shall be made through direct investment accounts.

The use of currencies in the valuation and payment for the ownership transfer of the value of capital, investment projects in foreign direct investment in Vietnam:

• Foreign currencies may be used for valuation and payment for the transfer of stakes and investment projects between non-residents;
• VND shall be used for valuation and payment for the transfer of stakes and investment projects between a resident and a non-resident or between residents.

Procedures for transferring FDI company investment projects

Case 1: Transfer of all or part of the investment

Step 1: Prepare applications

Pursuant to Clause 1, Article 77 of Decree 31/2021/ND-CP Guiding the Investment Law 2020, the applications include:

• An application form requesting the adjustment of investment project;
• Investment project transfer contract;
• Report on project implementation status up to the time of transfer;
• Documents proving the legal status of the transferor and transferee;
• Documents proving the financial capacity of the transferee (for example: financial reports of the last 2 years, commitment to financial support from the parent company);
• Copy of Investment Registration Certificate (if any);
• Documents related to land use rights (if the project uses land);

Step 2: Submit applications

• Submit application to the Investment Registration Office where the project is headquartered.
• Number of application files: 01 set.

Step 3: Processing the application

• Within 10 working days from the date of receipt of valid documents, the investment registration authority shall review and decide to adjust the Investment Registration Certificate.

Case 2: Transfer of capital contribution and shares in FDI company

Step 1: Determine the cases that must be registered with the investment registration agency

Pursuant to Clause 2, Article 26 of the Investment Law 2020, registration with the investment registration authority is required if:

• The transfer increases the foreign investor’s ownership ratio in the company to over 50% of the charter capital.
• The transfer results in the foreign investor holding over 50% of the charter capital in the company.
• The company operates in an industry or profession with conditions applicable to foreign investors.

Step 2: Prepare applications

• Application form for registration of capital contribution, purchase of shares, purchase of capital contribution
• Transfer contracts or equivalent documents
• Documents proving the legal status of the investor receiving the transfer
• Approval documents of the investment registration agency (if required to register)

Step 3: Submit application

• Submit the application to the Investment Registration Office where the company has its head office.
• Number of application: 01 set

Step 4: Processing the application

• Within 15 working days from the date of receiving valid documents, the investment registration agency shall review and notify the investor of the results.

FDI company investment project transfer services in Vietnam

Viet An Law provides comprehensive advice on foreign investment project transfer transactions:

• Consulting on transfer conditions under the law;
• Drafting transfer documents and contracts;
• Representing in working with competent authorities;
• Post-transfer support: capital accounts, taxes, legal.

Above is the latest update of Viet An Law on FDI company investment project transfer services in Vietnam. If you have any related questions or need support, please contact Viet An Law for the best support!