Foreign states investing directly in Vietnam need capital to carry out investment projects. How to transfer foreign direct investment capital into Vietnam? What must foreign investors do to be able to transfer their capital from abroad to Vietnam? LSX Lawfirm will help customers answer the following questions about article: “Transfer of direct investment capital from abroad into Vietnam”, as follows:
Legal grounds
Law on investment 2020
Circular No. 19/2014/TT-NHNN
Circular No. 23/2014/TT-NHNN
Circular No. 02/2019/TT-NHNN
Forms of foreign investors’ direct investment in Vietnam
Foreign direct investment in Vietnam is a form of long-term investment by individuals or companies from one country to another by establishing production and business bases. That foreign individual or company will take over the management of this production and business establishment.
Foreign investors invest directly in Vietnam in one of the following forms investing in:
–The establishment of economic organizations
–The form of PPP contract
–Form of BCC contract
Transfer of direct investment capital from abroad into Vietnam
The level of contributed investment capital shall be according to the investment capital level stated in the Investment Registration Certificate.
Then, the direct investment capital contribution of foreign investors will be made through a bank account at a commercial bank; foreign bank branches may trade and provide foreign exchange services.
Corresponding to the selected foreign currency to make investment capital contribution, only 01 direct investment capital account in that foreign currency is allowed to make investment capital contribution.
In case of borrowing and the borrowed currency does not correspond to the currency that the foreign direct investment enterprise uses to open the direct investment capital account. At this time, enterprises with foreign direct investment can open an additional direct investment capital account in the borrowed currency at the bank where the direct investment capital account has been opened. To conduct legal revenue and expenditure transactions related to foreign loans and revenue and expenditure transactions.
In case there is a need to open a direct investment capital account at a commercial bank; then foreign bank branches may trade and provide foreign exchange services. is different. Enterprises with foreign direct investment capital and foreign investors participating in business cooperation contracts must close the opened direct investment capital accounts. Transfer all balances on this account to the new account.
Open a direct investment capital account
Direct investment capital account to conduct revenue and expenditure transactions; transferring capital, profits and lawful revenue sources abroad; transfer capital for the investment period.
So, dossier to open a direct investment capital account:
- Firstly, an application for opening a payment account is made. According to the form of the bank, foreign bank branch where the account is opened; and in accordance with the provisions of Clause 8, Article 1 of Circular 02/2019/TT-NHNN.
- Secondly, the original or a copy of the Establishment Decision; License to operate; Certificate of business registration; or other documents as prescribed by law.
- Originals or copies of documents proving the legal representative’s status (such as appointment decision, etc.); Decision on appointment of chief accountant or person in charge of accounting (if any) of foreign-invested enterprises.
- Finally, original or copy of citizen identification card; or identity card; or valid passports of the above persons.
You can refer to the article related to capital or foreign capital and dossier about transfer of direct investment capital from abroad into Vietnam.
Using direct investment capital account
Using a foreign currency direct investment capital account
Collection transactions
- Collecting foreign currency direct investment capital contributions from foreign investors and Vietnamese investors in foreign direct investment enterprises;
- Then, collect capital withdrawals in foreign currencies from short, medium and long-term domestic and foreign loans of enterprises with foreign direct investment capital;
- Collect payment for the transfer value of investment capital and investment projects;
- Collecting foreign currency from foreign currency payment accounts opened at authorized banks of foreign direct investment enterprises and foreign investors;
- Finally, other lawful receipts in foreign currencies related to foreign direct investment activities in Vietnam.
Payment transactions
Firstly, payment of principal, interest and fees of short, medium and long-term domestic and foreign loans in foreign currencies of enterprises with foreign direct investment capital;
Secondly, expenses for:
+ transferring foreign currency to foreign currency payment accounts opened at authorized banks of foreign direct investment enterprises and foreign investors;
+ Then, selling foreign currency to authorized credit institutions to transfer to Vietnam dong payment accounts of foreign direct investment enterprises and foreign investors;
+ money transfer to pay the value of receiving transfer of investment capital and investment projects;
Thirdly, the transfer of profits and lawful foreign currency earnings from foreign direct investment activities in Vietnam by foreign investors out of Vietnam;
Expenses for direct investment capital in foreign currency of foreign investors out of Vietnam in case of dissolution, termination of operation of foreign direct investment enterprises, transfer of investment capital and projects invest, reduce investment capital or terminate, liquidate or terminate the operation of investment projects in accordance with the provisions of the law on investment;
Other legal payments in foreign currencies related to foreign direct investment activities in Vietnam.
Related questions
Collection transactions:
Collecting money for direct investment capital contribution in Vietnam Dong from foreign investors, Vietnamese investors in foreign direct investment enterprises;
Then, collect after-tax profits distributed in Vietnam dong for re-investment in Vietnam by foreign investors, Vietnamese investors in foreign-invested enterprises;
Collecting money to withdraw capital from short, medium and long-term domestic loans in Vietnam dong of enterprises with foreign direct investment capital to carry out investment activities in Vietnam;
Collect capital withdrawals from foreign loans in Vietnam dong of foreign direct-invested enterprises that are allowed to borrow foreign loans in Vietnam dong according to current regulations of law on foreign loans to repay enterprises. business not guaranteed by the Government;
Collect payment for the transfer value of investment capital and investment projects;
Finally, transfer money from current accounts in Vietnam dong of foreign direct investment enterprises and foreign investors opened at authorized banks.
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