Procedures for transferring shares to foreigners in Vietnam. Dossier to carry out procedures for capital transfer to foreigners. Let us learn about this topic with LSX Law firm below:
– Enterprise Law 2020.
– Law on Investment 2020.
– Decree 01/2021 on business registration
– Decree 31/2021/ND-CP guiding the investment law
Procedures for transferring shares to foreigners in Vietnam
– In cases where shareholders may transfer shares; under the provisions of Enterprise Law 2020; most shareholders have the right to transfer their shares freely. However, there are some regulations for founding shareholders as follows:
Suppose the Company’s charter provides for the restriction and transfer of shares. In that case, such provisions can only be adequate when clearly stated in the shares of the respective shares.
In addition; within three years (from the date on which this Company have the certificate of business registration by the competent authority); then founding shareholders will be limited and can only transfer their shares to other founding shareholders; and can only transfer his/her shares to another person if that person is not a share holder with the approval of the General Meeting of Shareholders.
Procedures for transferring shares to foreigners in Vietnam:
Specifically, the first step is to register to buy back shares: Registering to buy back these shares is not required in all cases. However, the foreigner who receives the transfer of shares must also do so. However, the law requires in the following cases; must register to buy shares at the Department of Planning and Investment:
Firstly, when foreigners buy shares of companies dealing in conditional lines and are applied to foreign investors.
Secondly, when the purchase of shares leads to that foreigner holding 51% or more of the charter capital.
The next step is registration to change members’ information: The transfer will change the information of shareholders; so it is necessary to notify the competent authority within five days at the latest, from the date of assignment. Moreover, the Company whose shareholders transfer shares to foreigners must submit a dossier to the Department of Planning and Investment to change information of capital contributors in the Company.
Dossier to carry out procedures for capital transfer to foreigners:
- For documents to register to buy back shares:
Firstly, it includes an application for the repurchase of shares with the following principal details:
Detailed information of the Company in which the foreigner buys shares; specific capital contributions, and the percentage of capital contributed by foreigners after transferring shares.
Additionally, having passports and people’s identity cards allows foreigners to transfer shares.
- For registration documents to change member information, send to Business Registration Office:
Firstly, there must be a contract to transfer shares to that foreigner.
Secondly, there is a record of contract liquidation.
Thirdly, there is a notice of the change of business registration content.
Moreover, having meeting minutes on decisions of relevant competent entities.
In addition, list of shareholder members after the transfer of shares.
Lastly, there is a document showing the approval of the Department of Planning; and Investment for the purchase of shares by the foreigner.
Problems in the procedure for transferring shares to foreigners
Carrying out the procedures for applying for approval for foreigners to transfer shares, the implementer will still encounter the following shortcomings and problems:
- The Department of Planning and Investment document approving the capital contribution, share purchase, capital contribution portion of the foreign investor; detailing the amount of contributed capital, shares owned by foreigners; and the industry content business lines of enterprises when accepting foreigners as capital contributors. Therefore, if the business line is in the field of conditional investment or the foreigner’s capital ownership rate after the transfer is over 50%, it will make your procedure difficult some of the following:
+ Firstly, the Department of Planning and Investment will send an official dispatch to consult agencies and sectors according to regulations on business conditions in the fields of conditional business investment.
+ Secondly, the Department of Planning and Investment requires the enterprise to explain the compatibility of the percentage of foreign capital with the business scope and scale of the enterprise as prescribed in current legal documents. Enforcement and the WTO.
- After obtaining the Department of Planning and Investment’s written approval on the capital contribution, share purchase, and capital contribution portion of foreign investors, the business registration office has the right to request the enterprise to perform the following tasks: money transfer before issuing business registration certificate? This is controversial content in the current guiding documents on foreign capital contribution.
Finally, hope this article is helpful for you!
Investment registration dossiers, including:
– An application for an investment certificate;
– Report on the financial capacity of the investor;
– An explanation of economic and technical or an explanation of the ability to meet investment conditions;
– Documents proving the investment location;
In the following cases, the investor must carry out the procedures for applying for an Investment Registration Certificate:
+ Investment projects of foreign investors;
+ Investment projects of the following economic organizations:
– There are foreign investors holding 51% or more of the charter capital or the majority of general partners are foreign individuals, for economic organizations that are partnerships;
– Having the above-mentioned economic organizations holding 51% or more of charter capital;
– Having foreign investors and economic organizations specified as above holding 51% or more of charter capital.