FOREIGN INVESTOR’S DIRECT CONTRIBUTION OF THE CAPITAL TO VIETNAM IN CASH
Legal basis:
- Law on Investment
- Circular No.06/2019/TT-NHNN
According to Clause 3 Article 4 of Circular No.06/2019/TT-NHNN, the monetary capital contribution by foreign or Vietnamese investors must be transferred to the direct investment account.
According to Clause 1 Article 5 of Circular 06/2019/TT-NHNN, the following entities shall open and use direct investment accounts include:
– Enterprises with foreign direct investment, in which foreign enterprises include:
+ Any enterprise established in the form of investment of establishing a business organization whose members or shareholders are foreign investors and granted the investment registration certificate following the law on investment;
+ Any enterprises other than those prescribed in point a of this clause and at least 51% of charter capital of which is owned by foreign investors;
+ Project enterprises established by foreign investors to implement PPP projects following the law on investment.
– Foreign investors participating in BCC contracts, foreign investors directly implementing PPP projects in the case of not establishing a project enterprise (hereinafter referred to as foreign investors directly implementing PPP projects). In Vietnam, PPP (abbreviated as Public Private Partnership) is understood as an investment in the form of a public-private partnership implemented based on a contract between a competent state agency and an investor or project enterprise. to implement, manage, and operate infrastructure projects and provide public services. A PPP project is a set of proposals related to the investment to provide public products and services through the implementation of one or the following activities: Construction, operation, and business of infrastructure works and systems; Renovation, upgradation, expansion, modernization, operation and business of available works and systems; Operation and business of available infrastructure works and systems.
When a foreign investor invests in Vietnamese Dong, the investor opens one (01) direct investment account in Vietnamese dong at the authorized bank where the direct investment account in foreign currency is opened to receive and make payments in VND during the process of foreign direct investment in Vietnam. In case a foreign investor participates in many BCC contracts or directly implements many PPP projects, the foreign investor must open a separate direct investment capital account corresponding to each BCC contract or PPP project.
Thus, foreign investors are allowed to contribute investment capital in Vietnamese Dong according to the registered amount in the investment registration certificate, license of establishment and operation by specialized law, or other documents which can prove the compliance with law of capital contribution of foreign investors. Capital contribution must be made via bank transfer.