Investors contribute capital, buy shares, buy capital contributions in Vietnam

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Legal grounds

Law on enterprises 2020

Law on investment 2020

Decree No. 31/2021/ND-CP

Circular 03/2021/TT-BKHDT

What is a foreign invested enterprise?

Foreign-invested enterprises are legal entities invest in part or in whole by investors of another country and established and operating in the territory of another country to conduct business activities commercial activities and bring profits to investors. In Vietnam, the concept of foreign-invested enterprises, also known as FDI enterprises.

Related article: Entry, exit, and residence of foreigners in border economic zones

What are the pros and cons of IPO in Vietnam?

Foreign investors establish economic organizations in Vietnam

Investors contribute capital, buy shares, buy capital contributions in Vietnam

Investors have the right to contribute capital, buy shares or purchase capital contributions from economic organizations. A foreign investor’s capital contribution, share purchase or capital contribution purchase from an economic organization must satisfy the following regulations and conditions:

Then, Market access conditions for foreign investors specified in Article 9 of the Investment Law; To ensure national defense and security according to the provisions of this Law; Regulations of the land law on conditions for receiving land use rights, conditions for land use in islands, communes, wards, border towns, communes, wards and coastal townships.

Forms

Investors may contribute capital to economic organizations in the following forms:

• Purchase of shares issued for the first time or additionally issued by a joint-stock company
• Contribute capital to a limited liability company or a partnership
• Contribute capital to other economic organizations other than those specified above.

Procedures

Regarding implementation procedures, investors contributing capital, buying shares or purchasing capital contributions of economic organizations must satisfy the conditions and carry out procedures for changing members and shareholders in accordance with relevant laws. for each type of economic organization.

Foreign investors shall carry out procedures for registration of capital contribution, share purchase or purchase of contributed capital portions of economic organizations before changing members or shareholders if they fall into one of the following cases:

• Capital contribution or share purchase shares or purchases of capital contributions to increase foreign investors’ ownership ratio in economic organizations engaged in business lines and trades with conditional market access for foreign investors
• The contribution of capital, purchase of shares, purchase of contributed capital leads to the fact that foreign investors and economic organizations specified at Points a, b and c, Clause 1, Article 23 of the Law on Investment hold more than 50% of the charter capital ratio of economic organizations in the following cases: increasing the rate of ownership of the charter capital of foreign investors from less than or equal to 50% to over 50%; increase the rate of ownership of charter capital of foreign investors when foreign investors already own more than 50% of charter capital in economic organizations
• Foreign investors contribute capital, purchase shares or purchase capital contributions from economic organizations with land use right certificates in islands and border communes, wards and townships; coastal communes, wards and towns; other areas affecting national defense and security.

Documents

According to the provisions of the Investment Law 2020, in order to establish a foreign-invested enterprise, investors must carry out procedures for applying for an investment registration certificate for the project before establishing the company. An application for an investment registration certificate includes:

• A written request for implementation of the investment project
• A copy of the identity card, identity card or passport for the investor being an individual; a copy of the Certificate of Establishment or other equivalent document certifying the legal status of the investor being an organization
• Investment project proposal including the following contents: investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, deadline, progress investment level, labor demand, proposal for investment incentives, assessment of the project’s socio-economic impact and efficiency
• A copy of one of the following documents: financial statements of the last 2 years of the investor; commitment to financial support of the parent company; financial institution’s commitment to financial support; guarantee on the financial capacity of the investor; documents explaining the financial capacity of the investor.

Related questions about “Investors contribute capital, buy shares, buy capital contributions in Vietnam”

Features of economic organization?

So, Enterprises and cooperatives are legally established under the provisions of law.
Then, Licensed to operate and do business to serve economic development.
An economic organization must have a clear operating charter and organizational structure.
Businesses have full information about their names, addresses, property numbers, clear and transparent operational purposes.
The enterprise has a legal personality.
Economic organizations are enterprises or cooperatives without foreign investment capital.

Operational forms of economic organizations?

The state-owned economy is consolidated and developed, especially in the field that plays a key role in the national economy.
Collective economy contributed by citizens to cooperate in production and business is organized in various forms on the principle of voluntary, democratic and mutual benefit.
Individual economy, private capital can choose the form of organization of production and business, and can establish an enterprise without any restriction on the scale of activities and industries that bring benefits to the national economy.
Finally, economic families are encouraged to grow.

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