FORMS OF INVESTMENT TO CONTRIBUTE CAPITAL, BUY SHARES, BUY CAPITAL CONTRIBUTIONS FROM FOREIGN INVESTORS IN VIETNAMESE COMPANIES

Legal grounds

• WTO commitments and international treaties on investment that Vietnam has signed or acceded to;
• Law on Investment 2020;
• Decree 31/2021/ND-CP guiding the Law on Investment;
• Enterprise Law 2020;
• Decree No. 01/2021/ND-CP guiding the Enterprise Law

1. Forms of capital contribution, share purchase, purchase of capital contributions by foreign investors in Vietnamese companies:

Foreign investors may Contribute Capital to Vietnamese companies in the following forms:

• Purchase of shares issued for the first time or additionally issued by a joint-stock company;
• Contributing capital to limited liability companies, partnerships;
• Contributing capital to other economic organizations that do not fall into one of the above cases.

Foreign investors BUY SHARES, BUY CAPITAL SHAREs of Vietnamese companies:

• Buy shares of a joint stock company from the company or shareholder;
• Buy the capital contribution of a member of a limited liability company to become a member of a limited liability company;
• Purchase of capital contributions of capital-contributing members in a partnership to become a capital-contributing member of a partnership;
• Purchase of capital contributions from members of other economic organizations that do not fall into the above cases.

II, Details of procedures for capital contribution, share purchase, and capital contribution purchase by foreign investors in Vietnamese companies:

Case 1: Foreign investors carry out procedures for registration of capital contribution, purchase of shares or purchase of contributed capital of an economic organization before changing members or shareholders if they fall into one of the following cases:

• The contribution of capital, purchase of shares, purchase of contributed capital increases the foreign investors’ ownership ratio in economic organizations engaged in business lines and trades with conditional market access for foreign investors. ;
• Capital contribution, share purchase or capital contribution purchase leads to foreign investors and economic organizations specified at Points a, b and c, Clause 1, Article 23 of the Law on Investment holding more than 50% of the capital. the charter of the economic organization in the following cases:

• Increase the percentage of foreign investors owning charter capital from less than or equal to 50% to over 50%;
• Increase the rate of ownership of charter capital of foreign investors when foreign investors already own more than 50% of charter capital in economic organizations.

Dossier for registration of capital contribution, purchase of shares or capital contribution by foreign investors:

• Written registration of capital contribution, purchase of shares, contributed capital;
• Notarization of legal documents of individuals and organizations contributing capital, buying shares, purchasing capital contributions and economic organizations with foreign investors contributing capital, buying shares, purchasing capital contributions;
• Written agreement on capital contribution, share purchase, purchase of capital contributions between foreign investors and economic organizations receiving capital contribution, purchase of shares or contributed capital;
• Declaration document (attached to Notarization) Certificate of land use rights of economic organizations receiving capital contribution, shares or capital contribution of foreign investors.

Case 2: Foreign investors carry out procedures for changing shareholders and members at the business registration agency.

• Investors who are not specified in Case 1 carry out the procedures for changing shareholders or members inaccordance with relevnt laws when contributing capital, buying shares or purchasing capital contributions from economic organizations. at the Business Registration Office where the economic organization is headquartered.
• In case of need to register capital contribution, purchase of shares or purchase of contributed capital of an economic organization, the investor shall comply with the provisions in Case 1.

Dossier to change business registration:

• Notice of changes in business registration contents;
• Deciding on the change of members of the company;
• Minutes of the meeting on the change of company members (if any)
• The transfer contract and documents certifying the completion of the transfer, certified by the legal representative of the company;
• List of capital contributors or register of shareholders;
• Notarized copy of the new member’s passport to contribute capital to the company (if any).

III, Procedures for foreign investors to contribute capital, purchase shares, and contribute capital to Vietnamese companies:

1. Procedures for foreign investors to register for capital contribution, purchase of shares or capital contribution to a company in Vietnam with 100% Vietnamese capital

Step 1: Investors submit dossiers at the Investment Department – Department of Planning and Investment where the economic organization is headquartered, and carry out procedures for registration of capital contribution, purchase of shares, capital contribution to the Company with 100% capital. Vietnam.

• In case the capital contribution, share purchase or capital contribution portion of foreign investors meets the conditions, the Department of Planning and Investment will notify in writing within 15 days from the date of receipt of a complete dossier for approval. The company carries out procedures for changing shareholders and members in accordance with law. In case the conditions are not met, the Department of Planning and Investment shall notify in writing the investor and clearly state the reason.

Step 2: After obtaining the approval of the Investment Department – Department of Planning and Investment on the approval of foreign investors to contribute capital, purchase shares, and contributed capital, investors carry out the following procedures: If buying from 51% capital of a Vietnamese company: open a direct investment capital account for a Vietnamese company, then the foreign investor makes a capital contribution and declares transfer income tax.

Step 3: After that, the company in which the investor purchases contributed capital or shares will carry out the procedures for changing shareholders and members on the Business Registration Certificate (Certificate of Business Registration) according to the regulations at the Business Registration Office – Department of Planning and Investment.

2. Procedures for foreign investors to register for capital contribution, purchase shares or capital contributions to a company in Vietnam with foreign investment capital.

Step 1: Investors submit documents at the Investment Department – Department of Planning and Investment where the economic organization is headquartered to carry out procedures for registration of capital contribution, purchase of shares, and capital contribution to the Company. Foreign investment.

Step 2: After obtaining approval from the Investment Department – Department of Planning and Investment on the approval of foreign investors to contribute capital, purchase shares, purchase contributed capital, investors carry out the following procedures. the following: If a foreign investor contributes capital, purchases shares, or purchases a capital contribution, resulting in the foreign investor owning 51% of the capital of a Vietnamese company opening a direct investment capital account, then the investor Foreigners transfer money to the direct investment capital account of Vietnamese companies and declare transfer income tax.

Step 3: After or concurrently with the procedure for changing business registration, the company changes the Investment Registration Certificate to recognize the new foreign investor.

Payment for capital contribution by foreign investors to Vietnamese companies:

Pursuant to Circular No. 06/2019/TT-NHNN of the State Bank of Vietnam, the payment for transactions of capital contribution, share purchase, purchase of contributed capital in a foreign-invested enterprise must be made through the foreign direct investment capital account of that enterprise. Therefore, the Vietnamese company receiving the capital contribution must open a foreign direct investment capital account at a bank in Vietnam; can be opened in Vietnam Dong or in a foreign currency, depending on the currency used to contribute capital to the business.