Investment in the form of capital contribution or purchase of shares or stakes in Vietnam
Investment in the form of capital contribution, share purchase, capital contribution is an investment form that many foreign investors are interested in when investing in Vietnam. What is the investment procedure in the form of capital contribution, share purchase or capital contribution? What will foreign investors do when making an investment in this form? LSX Lawfirm will help customers answer questions about this issue through the article: “Investment in the form of capital contribution or purchase of shares or stakes in Vietnam” as follow.
Legal grounds
Law on investment 2020
What does “Investment in the form of capital contribution or purchase of shares or stakes” means?
Accordingly, Investment in the form of capital contribution or purchase of shares or stakes in Vietnam is one of the investment forms of investors in Vietnam, including:
- Establishment of a business organization.
- Investment in the form of capital contribution or purchase of shares or stakes.
- Execution of an investment project.
- Investment in the form of a business cooperation contract.
- New forms of investment and types of business organizations prescribed by the Government’s regulations.
Related article: Foreign investors contribute capital into Vietnam enterprises
Regulations on limiting capital contribution ratio of foreign investors
Are foreign investors limited in capital contribution in Viet Nam?
Procedures for changing investment capital of foreign-invested companies
Foreigners borrow capital in Vietnam in accordance with current law
Investment in the form of capital contribution or purchase of shares or stakes in Vietnam
Firstly, Investors are entitled to contribute capital, purchase shares or purchase stakes of business organizations.
Secondly, Foreign investors making investment by contributing capital, purchasing shares and purchasing stakes of business organizations must:
a) Satisfy market access conditions applied to foreign investors as prescribed as below:
Market access conditions applied to foreign investors are the same as those applied to domestic investors, except for the case: Prohibited business lines and Restricted business lines.
In addition
- Market access conditions applied to foreign investors specified in the Negative List for Market Access include:
- Then, Holding of charter capital by the foreign investor in a business organization.
- Investment method.
- Scope of investment.
- Capacity of the investor; partners participating in the investment activities.
- Other conditions specified in the Laws and Resolutions not only the National Assembly, but also Ordinances and Resolutions of the Standing Committee of the National Assembly, Decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a signatory.
Moreover, Market access conditions for foreign investors are considered in accordance with the provisions of current legal documents (including laws, resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, decrees of the Government) and international treaties to which the Socialist Republic of Vietnam is a signatory.
b) Then, ensure national defense and security in accordance with Investment Law 2020.
c) Finally, comply with regulations of the law on land and conditions for receipt of land use rights and conditions for use of land on islands or border or coastal communes.
Related questions about: “Investment in the form of capital contribution or purchase of shares or stakes in Vietnam”
In case foreign investors fail to comply with regulations on the form of capital contribution, namely capital contribution in cash; they may be subject to a fine of between VND 30 and 40 million.
Foreigners working in foreign-invested projects are entitled to the customs regime; immigration, residence and travel in the Vietnamese territory, the right to information and communication accordingly the provisions of Vietnamese law: remittance abroad salary and other lawful income. At the same time, these people working must respect Vietnamese law; fulfill their obligations as committed to investors; and pay income tax under the law on an income of Vietnam.
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