Transfer investors’ profits from abroad to Vietnam. Open an offshore investment capital account. Transfer of investment capital abroad. Let us learn about this topic with LSX Law firm below:
Investment Law 2020
The State encourages investment abroad in order to exploit, develop and expand the market; increase the ability to export goods and services and collect foreign currency; access to modern technology, improve governance capacity and supplement resources for socio-economic development of the country.
Open an offshore investment capital account
Before wanting to transfer investors’ profits from abroad to Vietnam, it is necessary to open an overseas investment capital account. Specifically, Article 65 of the Law on Investment 2020 stipulates as follows:
Firstly, the investor opens an offshore investment capital account at an authorized credit institution in Vietnam; under the law on foreign exchange management.
Secondly, all money transfer transactions from Vietnam to abroad; and from abroad to Vietnam related to offshore investment activities; must to do through the investment capital account; specified in Clause 1 of this Article under the law on foreign exchange management.
Transfer of investment capital of investor from Vietnam to abroad
According to Article 66 of the Investment Law 2020; in order to receive profits, the investors must first transfer capital abroad:
Specifically, an investor may transfer investment capital abroad to carry out investment activities when meeting the following conditions:
Firstly, Investors must have the Certificate of registration of outward investment; except for the case specified in Clause 3 of this Article;
Secondly, investment activities agreed by the competent authority of the host country. Where the law of the host country does not provide for investment licensing; or investment approval, the investor must have documents proving the right to invest in the host country;
Finally, have a capital account as prescribed in Article 65 of this Law.
Besides, the transfer of investment capital abroad must comply with the provisions of the law on foreign exchange management, export, technology transfer, and other relevant laws.
In addition, investors may transfer foreign currency or goods, machinery, and equipment abroad to serve survey, research, market exploration, and other pre-investment activities according to regulations of the Government.
Using profits abroad of investors
Investors may retain profits earned from overseas investments for reinvestment in the following cases:
a) Continue to contribute capital for investment abroad in case the registered capital has not yet been fully contributed;
b) Increase in outward investment capital;
c) Implementation of new investment projects abroad.
Besides, the investor shall carry out the procedures for adjusting the Certificate of offshore investment registration according to the provisions of Article 63 of this Law for the cases specified at Points a and b, Clause 1 of this Article; carry out the procedures for issuance of the Certificate of offshore investment registration as prescribed in Article 61 of this Law for the case specified at Point c, Clause 1 of this Article.
Guarantees for transfer of foreign investors’ assets overseas
What should foreign investors pay attention to about taxes in Vietnam?
Transfer profits of investors from abroad to Vietnam
Article 68 of the Investment Law 2020 specifically provides for the transfer of profits of investors from abroad to Vietnam as follows:
Specifically, except for the case of withholding profits as provided for in Article 67 of this Law; within six months from the date of the tax finalization report or document of equivalent legal value as prescribed by the law of the host country; investors must transfer all profits earned and other incomes from overseas investments to Vietnam.
Furthermore, within the time limit specified in Clause 1 of this Article; if profits and other incomes are not transferred to Vietnam; the investor must notify in writing the Ministry of Planning and Investment and the State Bank of Vietnam in advance. The time limit for repatriation of profits shall not exceed 12 months from the expiration of the time limit specified in Clause 1 of this Article.
Finally, after the time limit specified in Clause 1 of this Article has not yet repatriated; and failing to notify or in case the extended time limit specified in Clause 2 of this Article is exceeded; the investor has not yet remitted profits to his/her home country; shall be handled under the law.
Finally, hope this article about transfer investors’ profits from abroad to Vietnam is helpful for you!
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Firstly, the investor is responsible for fulfilling all financial obligations related to the offshore investment project to the State of Vietnam in accordance with the tax law. Secondly, investors being state-owned enterprises have the responsibility to fulfill all financial obligations related to offshore investment projects to the State of Vietnam; according to the provisions of the tax law, the law on the management and use of state capital invested in production and business at the enterprise. Finally, the exemption of export tax and import tax for the capital portion in goods, machinery and equipment transferred abroad to carry out investment activities and transferred from abroad to Vietnam; comply with the law on export tax and import tax.
1. Investors are only allowed to send Vietnamese workers to work in their investment projects abroad in accordance with the provisions of the labor laws of Vietnam and of the host country or territory.
2. Investors must complete all procedures for sending Vietnamese workers to work for investment projects abroad; ensure the lawful interests of overseas Vietnamese workers; be responsible for solving problems arising in sending Vietnamese workers to work for investment projects abroad in accordance with the law on Vietnamese workers working abroad under contracts and other relevant regulations.