Procedures for foreigner’s capital contribution to a company in Vietnam

DangKhoi August 25, 2021

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The following article will provide you with information about the procedure for foreigners to contribute capital to a company in Vietnam.

Currently, foreigners investing in Vietnam are increasing in popularity. So what is the procedures for foreigners to contribute capital to a company in Vietnam? Let’s find out in this article with LSX Law firm.

Legal Ground

Enterprise Law 2020

Investment Law 2020

Decree 31/2021/ND-CP

What is capital contribution?

So, Capital contribution is understood as the contribution of assets to form the charter capital of the company. This capital contribution is made when establishing a new enterprise, or contribute additional charter capital to the already established enterprise.

Additionally, assets contributed as capital to the company in Vietnam are in Vietnam Dong, freely convertible foreign currency, gold, land use rights, Intellectual property rights, technology, Technical know-how, other assets that can be valued in Vietnam Dong.

Finally, only individuals and organizations are lawful owners or have a lawful use right to property have the right to use such property to contribute capital as prescribed by law.

Forms of capital contribution to companies in Vietnam

Article 23 of the Investment Law 2020 stipulates: Investors may contribute capital to companies in Vietnam in the following forms:

a) Buy shares issued for the first time or additional shares issued by joint-stock companies;

b) Contributing capital to a limited liability company or a partnership;

c) Contributing capital to other economic organizations other than those specified at Points a and b of this Clause.

Procedures for registration of capital contribution to a company in Vietnam

In Clause 2, Article 26 of the Law on Investment 2020, foreign investors shall carry out procedures for registration of capital contribution to a company in Vietnam before changing members, shareholders if they fall into one of the following cases:

a) The capital contribution increases the foreign investors’ ownership ratio in the industry company; occupations with conditional market access for foreign investors;

b) The capital contribution leads to the foreign investor; economic organizations specified at Points a, b and c, Clause 1, Article 23 of the Law on Investment 2020; holding more than 50% of the company’s charter capital in the following cases:

Increasing the percentage of foreign investors owning charter capital; from less than or equal to 50% to above 50%;
Increase the percentage of foreign investors owning charter capital; when foreign investors already own more than 50% of the charter capital in the company;

c) Foreign investors contribute capital to companies with certificates of land use rights in islands and communes; Ward; border town; coastal communes, wards, and towns; other areas affecting national defense and security.

Dossier for registration of capital contribution to a company in Vietnam

When the company has a foreign investor making capital contribution to a company in Vietnam, fall into the case specified in Clause 2, Article 26 of the Law on Investment, submit 01 application for registration of capital contribution to the investment registration agency where the economic organization’s head office is located. A dossier includes:

a) A written registration of capital contribution including the following contents:

Information on enterprise registration of the economic organization to which the foreign investor intends to contribute capital
List of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any);
Rate of ownership of charter capital of foreign investors first; after contributing capital to the company;
Expected transaction value of capital contribution contract;
Information on investment projects of economic organizations (if any);

b) Copies of legal papers of individuals, organizations contributing capital and companies to which foreign investors contribute capital;

c) Written agreement in principle on capital contribution; between foreign investors and companies in which foreign investors contribute capital; or between a foreign investor and a shareholder or member of that company;

d) A copy of the certificate of land use rights of the economic organization in which foreign investors contribute capital to the company in Vietnam.

Procedures for foreigner’s capital contribution to a company in Vietnam

procedures to contribute capital to the company in Vietnam in special cases

Step 1

Firstly, company with foreign investors for investments in the case referred prescribed in Clause 2, Article 26 of the Law on Investment. Submit 01 application for registration of capital contribution to the investment registration agency where the company’s head office is located.

Step 2

Case 1

In case the company the foreign investor is contributing capital has a certificate of land use right on the island; commune; Ward; border town; and coastal communes, wards, and towns; other areas affecting national defense; For security, the investment registration agency shall carry out the following procedures:

Firstly, Within 03 working days from the submission of a valid application, the investment registration agency collects opinions from the Ministry of National Defense and the Ministry of Public Security on the fulfillment of conditions as prescribed by law;

Secondly, Within 07 working days from the submission of the written request from the investment registration agency. The Ministry of National Defense and the Ministry of Public Security give opinions on the satisfaction of conditions for ensuring national defense; security for economic organizations with capital contributions by foreign investors; If the request time limit is exceeded, without giving any opinions, it is considered to have agreed to meet the conditions for ensuring national defense; security for economic organizations with capital contributions by foreign investors.

Thirdly, 15 days from the submission of valid dossiers, The investment registration agency will consider the satisfaction of capital contribution conditions, and based on the opinions of the Ministry of National Defense and the Ministry of Public Security to notify investors. Written notices are sent to foreign investors and companies in which foreign investors contribute capital.

Case 2

So, For the case specified at Points a and b, Clause 2, Article 26 of the Law on Investment; within 15 days from the date of receipt of valid dossiers; The investment registration agency considers the fulfillment of capital contribution conditions and notifies investors. Written notice is sent to foreign investors; and companies with capital contributions from foreign investors.

Step 3

Finally, rhe foreign investor is approved to contribute capital to the company with foreign investors contributing capital to carry out the procedures for changing members, shareholders at the business registration office. Rights and obligations of foreign investors as members; Shareholders of the company are established when completing the procedures for changing members and shareholders.

General procedures for capital contribution to companies in Vietnam

So, except for the cases specified in Clause 2, Article 26 of the Law on Investment, companies with foreign investors investing in the form of capital contribution shall carry out procedures for registration of change of members; shareholders at the business registration agency in accordance with the law on enterprises; and other laws corresponding to each type of economic organization.

Hope this article is useful for you, If you need any further information, please contact LSX Law Firm: 0833102102

Frequently Asked Questions

So, what are the assets to carry out the procedures for capital contribution to a company in Vietnam?

Assets in procedures for capital contribution to companies in Vietnam are Vietnam Dong, freely convertible foreign currency, Gold, land use rights, Intellectual property rights, technology, Technical know-how, other assets that can be valued in Vietnam Dong.

So, how long does it take for the investment registration agency to consider the fulfillment of capital contribution conditions and, based on the opinions of the Ministry of National Defense and the Ministry of Public Security, to notify investors?

Then, within 15 days from the date of receipt of a valid dossier, the investment registration agency shall consider the satisfaction of capital contribution conditions and, based on the opinions of the Ministry of National Defense and the Ministry of Public Security, shall notify the investor.

So, what is the time limit for the investment registration agency to get opinions from the Ministry of National Defense and the Ministry of Public Security on meeting the conditions prescribed by law?

Within 03 working days from the date of receipt of valid dossiers, The investment registration agency consults with the Ministry of National Defense and the Ministry of Public Security on meeting the conditions prescribed by law

So, Where are the forms of investors contributing capital to Vietnamese companies?

Investors may contribute capital to companies in Vietnam in the forms specified in Article 23 of the Law on Investment 2020.