Investing is a very popular activity in today’s life to earn more profits. Investment has many forms, many different fields, in many forms; and come from both at home and abroad. Here, let’s find out with Attorney X on the issue of “DICA Direct Investment Capital Account” through the following article:
DICA Direct Investment Capital Account
DICA (Direct Investment Capital Account) is short for direct investment capital account. This is a type of payment account in foreign currency or in Vietnam dong, opened by foreign direct investment enterprises or foreign investors at an authorized bank in Vietnam to perform related transactions. to foreign direct investment in Vietnam.
You can understand that the DICA account is a bridge for foreign investors to transfer investment money from abroad to Vietnam; to carry out investment activities under the approval of the investment licensing agency.
Subjects required to open a DICA account
From the definition, it show that the object of opening a DICA account here is foreign direct investment enterprise and foreign investor.
According to Circular 06/2019/TT-NHNN, the subjects who open and use DICA accounts include:
- Enterprises with foreign direct investment capital, including: (i) Enterprises with foreign investors as shareholders; member and granted an Investment Registration Certificate (IRC); (ii) Enterprises with foreign investors owning from 51% of charter capital; no IRC (For the case of foreign investors contributing capital, buying shares or capital contributions to the enterprise, or after splitting, merging or consolidating);
- Foreign investors participating in BCC contracts;
- Foreign investors directly implementing PPP projects; in the absence of a project enterprise.
Cases (1) and (2) are common in practice; because these are popular forms of investment in Vietnam today.
What are the regulations on opening a DICA account?
Subjects must open DICA accounts mentioned in item 1 above; must open a DICA account in foreign currency at an authorized bank in Vietnam. It is not necessary to open at the bank where the Enterprise has a payment account. However, corresponding to the type of foreign currency contributed capital for investment; only 01 (one) DICA account may be opened in that foreign currency; (hereinafter referred to as “Foreign Currency DICA”) at 01 (one) authorized bank.
In case of investment in Vietnam dong, 01 (one) DICA account in Vietnam dong (hereinafter referred to as “DICA VND”) allowed at the authorized bank where the foreign currency DICA account has opened to perform the following transactions: lawful revenue and expenditure transactions in Vietnam dong related to foreign direct investment activities in Vietnam.
In case foreign investors participate in many BCC contracts; or directly implement many PPP projects; foreign investors must open separate DICA accounts; corresponding to each BCC contract, PPP project.
DICA that used by businesses that open DICA; not only to make capital contribution of shareholders/owners; when setting up a new enterprise to open DICA, but also to perform transactions to order more shares/contribute more capital; when an enterprise opens a DICA to increase its charter capital; or perform money transfer transactions when the shareholders/owners; (as mentioned in point 4) transfer their shares/contributing capital in the enterprise opening DICA.
Besides, in principle, an enterprise opening a DICA can have many DICAs; each DICA can only be opened in the currency used by the business; (e.g. Vietnam Dong; or any foreign (freely convertible) currency). All DICAs must open at an authorized bank. For remittance transactions that must be made through DICA, the authorized bank where the DICA is opened may require the parties to provide supporting documents to authorize the remittance. Regarding this content, Circular 06/2019 does not amend the corresponding regulations in Circular 19/2014. However, Circular 06/2019 has added detailed regulations to make it easier for businesses to open DICA; in the implementation process.
Domestic loans of a DICA-opening enterprise are not disbursed through DICA; while foreign loans are not necessarily made through DICA in all cases. This is an important change of Circular 06/2019; compared with Circular 19/2014, it seems that Circular 19/2014 requires all loans to be disbursed through DICA.
Circular 06/2019 clearly stipulates that there are only cross-border payment transactions for the value of shares; capital contribution in the enterprise opening DICA, transferred between investors who are residents; and investors who are non-residents must do so through DICA. Currently, Circular 19/2014 is not clear on this issue. Therefore, there are many opinions that the payment of share transfer value; The capital contribution between non-resident investors must still do through DICA.
Circular 06/2019 clearly stipulates that there are only payment transactions for the transfer of shares; capital contribution in the enterprise opening DICA, between two investors who are non-residents; only allowed to identify and pay in foreign currency. In all other cases, the payment of the value of transferring shares and contributed capital at the enterprise opening DICA must determine; and payment in Vietnam Dong. Circular 19/2014 is not clear on this issue. So there are many opinions that in any case; All payments must be made in Vietnam Dong.
Please see more articles
- Approval for investment guidelines according to Viet Nam Law on Investment
- Status of Public Investment in Vietnam
Frequently asked questions
Foreign investors must present all evidence proving the amount of capital has been remitted into Vietnam, relevant relevant expenses have been spent in Vietnam and compliance with the provisions of Vietnamese law. relevant in the investment preparation process, including regulations on foreign exchange management, investment law and accounting law.
The time to open a DICA account for this school is from the date of issuance of the Investment Registration Certificate to no more than 90 days. Because the purpose of the DICA account is to receive the investment capital contribution to implement the project, to avoid the 90-day delay in capital contribution according to the Enterprise Law, it is important not to open a DICA account more than 90 days later from the date of receipt of the DICA account. issue the Investment Registration Certificate.
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