Foreign investors contribute capital to restaurant companies

With the trend of increasingly deep integration into all areas of economic life, the demand for restaurant business in Vietnam is also increasing and is an area that attracts both domestic and foreign investors. The cultural infusion from all over the world plays a major part in increasing the development potential of the culinary restaurant business containing the characteristics of national countries such as Japan, Korea, China, Thailand, etc. It can be seen that the demand of foreign investors to contribute capital to restaurant business companies is inevitable. In addition, foreign investors can choose many forms of investment such as establishing a company, contributing capital, buying shares, etc. In the article below, Siglaw would like to share the procedures for foreign investors to contribute capital to restaurant companies in Vietnam.

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Market access conditions for foreign investors contributing capital to restaurant companies

Procedures for foreign investors to contribute capital to a restaurant companies

Market access conditions for foreign investors contributing capital to restaurant companies

Holding of capital: According to Vietnam’s commitment statement in WTO, restaurant business is classified as food supply services (CPC 642) and beverage supply services (CPC 643). Henceforth, foreign investors are not limited in terms of capital ownership ratio, meaning that foreign investors can contribute from 1% to 100% of the company’s charter capital.

Registering capital contribution: As restaurant business is a conditional business line, foreign investors must carry out capital contribution registration procedures.

Vietnamese partner: The restaurant companies to which the foreign investor contributes capital must be a company that has been granted an Enterprise Registration Certificate.

Restaurant business is identified as one of the conditional business lines. Restaurants must meet the following conditions throughout their business operations:

• Conditions on processing place and area;
• Conditions on food preservation;
• Conditions on food processing personnel;
• Ensuring food hygiene and safety conditions;
• Ensuring fire prevention and fighting safety conditions.

Procedures for foreign investors to contribute capital to a restaurant companies

Step 1: Prepare documents for capital contribution registration

Foreign investors need to prepare the following documents to carry out the procedures for capital contribution registration in a restaurant company:

• A registration form for capital contribution for a restaurant company contains: enterprise registration information of the restaurant organization to which the foreign investors expects to contribute capital; list of owners, members and founding shareholders, list of owners, members and founding shareholders that are foreign investors (if any); holding of charter capital by foreign investors before and after the capital contribution; expected transaction value of the contract for capital contribution; information about the business organization’s restaurant investment project (if any);
• A principal agreement on capital contribution between the foreign investors and the restaurant business organization to which foreign investors contribute capital or between the foreign investors and the shareholders or members of such business organization.
• Copies of legal documents of the individual or organization that contributes capital and of the business organization to which foreign investors contribute capital;
• Copy of Certificate of Rights to Use Land of the restaurant company with foreign investors contributing capital in case the restaurant company has a certificate of rights to use land on an island or in a border or coastal commune; in a coastal commune; in another area that affects national defense and security;
• Letter of introduction, power of attorney letter for submitting the documents.

Step 2: Submit documents

Foreign investors submit documents at the Investment Registration Authority:

• If a restaurant company’s headquarter is located in an industrial park, export processing zone, high-tech zone, the economic zone is the Management Board of industrial parks, export processing zones, high-tech zones, economic zones.
• If the company’s headquarter is outside of an industrial park, export processing zone, high-tech zone, the economic zone is the Foreign Economic Affairs Department – Department of Planning and Investment of the province/city where the company is headquartered.

Within 15 working days from the date of receipt of valid dossiers, the Investment Registration Authority shall consider the satisfaction of the conditions for capital contribution.

In particular, if the business organization to which foreign investors contribute capital are purchased by foreign investors has the certificate of rights to use land on an island or in a border or coastal commune; in a coastal commune; in another area that affects national defense and security, the Investment Registration Authority shall follow the procedures below:

• Within 03 working days from the receipt of the valid application, the Investment Registration Authority shall seek opinions of the Ministry of National Defense and Ministry of Public Security about the satisfaction of the conditions.
• Within 07 working days from the receipt of the Investment Registration Authority’s request, the Ministry of National Defense and Ministry of Public Security shall give their opinions about the satisfaction of the conditions for national defense and security assurance by the business organization to which foreign investors contribute capital; in case of failure to give any opinion by the aforementioned deadline, it is considered that it concurs with the satisfaction of the conditions for national defense and security assurance by the business organization to which foreign investors contribute capital;
• Within 15 days from the receipt of the valid application, the Investment Registration Authority shall consider the satisfaction of the conditions for capital contribution or purchase of shares or stakes, and notify investors according to the opinions given by the Ministry of National Defense and Ministry of Public Security. The notification shall be sent to foreign investors and business organizations to which foreign investors contribute capital.

Step 3: Make capital contributions to the restaurant company

Foreign investors open direct investment capital accounts and make capital contributions and capital transfers through those accounts.

Members transferring capital shall declare taxes upon transfer in accordance with the laws on personal income tax and corporate income tax (if any).

Step 4: Procedures for changing company type, members, and company shareholders

After receiving the capital contribution of a foreign investor, the restaurant company needs to carry out procedures to change the members and shareholders of the company. In case the capital contribution to a restaurant company leads to a change in the type of company, it is necessary to carry out procedures to change the business registration according to regulations.

Above are some notes from Siglaw Law Firm about the conditions and procedures for foreign investors to contribute capital to a restaurant business company. For any questions related to the capital contribution process to the company, feel free to contact Siglaw for answers and dedicated advice.

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

• vphn@siglaw.com.vn
• vphcm@siglaw.com.vn

Headquarters: No.44/A32-NV13, Gleximco A, Le Trong Tan street, An Khanh, Hoai Duc, Ha Noi, Vietnam.

Southern branch: 6G4 Tran Nao Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City.

Central branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City

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