CAPITAL CONTRIBUTION BY FOREIGNERS INTO VIETNAMESE COMPANIES

When investors intend to participate in the Vietnamese market, there are many options of investment form that investors are able to choose. Recently, investors are advised to contribute capital to a Vietnamese company and become a member of an economic organization rather than establish a business organization. In addition, this form allows foreign businesses to gain access to a number of industries that require strict conditions for foreign investors.

Capital contribution is a form of investment that requires conditions for foreign investors as follow:

I. Conditions for capital contribution by foreigners into Vietnamese companies

Foreign investors contributing capital to Vietnamese companies must comply with the form of investment, operating scope, Vietnamese partners, and other aspects that are conformable with the international agreements to which the Socialist Republic of Vietnam is a signatory.

In addition, the investor’s charter capital satisfies the following requirements:

Foreign investors may own an indefinite amount of charter capital invested in business organizations, except for the following cases:

a) The holdings of the foreign investors at listed companies, public companies, securities-trading organizations, and securities investment funds are conformable with regulations of law on securities;

b) The holdings of the foreign investors at state-owned companies that have been equitized or converted are conformable with regulations of law on equitization and conversion of state-owned companies;

c) With regard to holdings of the foreign investors in other cases than those mentioned in Point a and Point b of this Clause, relevant regulations of law and the international agreements to which the Socialist Republic of Vietnam is a signatory shall apply.

II. Dossiers of purchasing contributed capital portions into Vietnamese companies

• Registration form for capital contribution, share purchase.

• Copie of Identity Card or passport for the individual investor;

• Copie of the Business Registration Certificate or other equivalent documents certifying the legal status of institutional investors.

III. Procedures for capital contribution to a Vietnamese company

Step 1: Investor contributes/purchase capital from Vietnamese companies

The investor shall submit the application file for capital contribution to the Department of Planning and Investment where the business locates its headquarter.

Step 2: The Department of Planning and Investment receive and check the records

The Department of Planning and Investment shall receive and check the application file; if the dossier is legally completed, the Department shall receive the application file and issue a Receipt to the investor;

Step 3: Verify and approve documents

Within 15 days from the date of receiving the dossier, the Department of Planning and Investment shall consider the fulfillment of investment conditions for foreign investors and notify the investor so that the investor can follow the procedures. Changing members in accordance with the law. In case of failure to meet the conditions, the Department of Planning and Investment shall notify the investor in writing, clearly stating the reason.

Step 4: Investors based on the appointment date on the Receipt of the application file to receive the results from the Department of Planning and Investment.

Step 5: Business organizations with foreign investors conducting capital contributions shall follow procedures for member changes at the Business Registration Offices in accordance with the Law on Enterprises.

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