Increase charter capital, investment capital on investment certificate

In order to expand the scale of business, during the implementation of investment projects, many foreign-invested companies might want to increase their charter capital by increasing the capital contribution of existing investors and/or receiving additional capital contributions from new investors. This charter capital is recorded on the Investment Registration Certificate. So, what is the procedure for adjusting the investment certificate when increasing the charter capital? Let’s find out together in the article below.

Procedures for adjusting investment certificate when increasing charter capital and investment capital

Increase charter capital through investors contributing additional capital to foreign-invested companies

Step 1: Adjust the Investment Registration Certificate

Documents for increasing charter capital of a foreign-invested company when an existing investor contributes additional capital to the company:

1. Document requesting adjustment of investment certificate;
2. Current investment registration certificate;
3. The investor’s decision on adjusting the investment project for institutional investors or equivalent documents for individual investors;
4. Report on the implementation status of the investment project up to the time of adjustment;
5. Explain or provide documents related to the adjustment of the following contents:

• Documents proving the financial capacity of the investor such as: financial statements of the last 2 years of the investor; commitment to financial support from the parent company; commitment to financial support from a financial institution; guarantee of the financial capacity of the investor; other documents proving the financial capacity of the investor;
• Other documents related to the investment project, requirements on conditions and capacity of the investor according to the provisions of law (if any).

Investors prepare the above complete set of documents and submit them to the Department of Planning and Investment where the enterprise is headquartered. The documents will be processed within 10-15 working days from the date the Investment Registration Office receives the complete and valid documents.

Step 2: Contribute charter capital

After completing the procedures for adjusting the investment certificate, the investor shall make additional investment capital contributions within the time limit specified on the Investment Registration Certificate and in accordance with the law on foreign exchange management.

Increase charter capital by receiving additional capital contributions from new investors

Step 1: Register to contribute capital, purchase shares/stakes of foreign investors

When new investors contribute capital to a foreign-invested company, they must prepare a dossier to register capital contribution, purchase shares/stakes. The dossier includes the following documents:

• A principal agreement on capital contribution or purchase of shares/stakes between the foreign investors and the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors or between the foreign investors and the shareholders or members of such business organization;
• A registration form for capital contribution/purchase of shares/stakes, which contains: enterprise registration information of the business organization to which the foreign investors expects to contribute capital or whose shares/stakes are expected to be purchased by the foreign investors; business lines; 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/purchase of shares/stakes in the business organization; expected transaction value of the contract for capital contribution/purchase of shares/stakes; information about the business organization’s investment project (if any);
• Copies of legal documents of individuals, organizations contributing capital, purchasing shares/stakes and economic organizations with foreign investors contributing capital, purchasing shares/stakes, including passport/ID card for individual investors; enterprise registration certificate or equivalent documents proving legal status and passport of the person authorized to manage capital contributions in Vietnam for institutional investors;
• Copy of Certificate of Rights to Use Land of the commercial company with foreign investors contributing capital in case the commercial 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, except for economic organizations implementing investment projects in industrial parks, export processing zones, high-tech zones, and economic zones established under Government regulations.

The investor submits the above documents to the Department of Planning and Investment where the enterprise is headquartered. If the documents are complete and valid, the investor’s capital contribution, share/stake purchase will be approved within 10-15 working days.

Step 2: Implement charter capital contribution of new investors

After being approved by the Investment Registration Authority, the investor shall make investment capital contributions within the time limit specified in the investment certificate and in accordance with the law on foreign exchange management.

Step 3: Increase charter capital on the Enterprise Registration Certificate

The dossier includes the following documents:

• Notice of change of enterprise registration content;
• Resolutions and decisions of the company owner for a single-member limited liability company; resolutions, decisions and meeting minutes of the Board of Members for a limited liability company with two or more members, a partnership company, and of the General Meeting of Shareholders for a joint stock company on changing the charter capital;
• Approval document for capital contribution from the Department of Planning and Investment of the province/city where the foreign-invested company has its head office.

Competent authority: Department of Planning and Investment where the company has its head office.

Estimated time: 03 working days from the day following the date of submission of the application.

Step 4: Increase the charter capital of the foreign-invested company on the investment certificate and add new investors.

Dossier required:

1. Document requesting adjustment of investment certificate;
2. Current investment registration certificate;
3. The investor’s decision on adjusting the investment project for institutional investors or equivalent documents for individual investors;
4. Report on the implementation status of the investment project up to the time of adjustment;
5. Explain or provide documents related to the adjustment of the following contents:

• Documents proving the financial capacity of the investor such as: financial statements of the last 2 years of the investor; commitment to financial support from the parent company; commitment to financial support from a financial institution; guarantee of the financial capacity of the investor; other documents proving the financial capacity of the investor;
• Other documents related to the investment project, requirements on conditions and capacity of the investor according to the provisions of law (if any).

Investors prepare the above complete set of documents and submit them to the Department of Planning and Investment where the enterprise is headquartered. The documents will be processed within 10-15 working days from the date the Investment Registration Office receives the complete and valid documents.

Note: When increasing charter capital for a foreign-invested company in case the foreign-invested company does not have an Investment Certificate due to the acquisition of capital contributions and shares/stakes of foreign investors in economic organizations previously established in Vietnam, it will be necessary to apply for additional capital contribution at the investment , then apply for enterprise registration change procedures at the business registration office.

The above are Siglaw’s shares on the procedures for increasing charter capital and investment capital on the investment certificate. For comprehensive advice, please contact Siglaw Law Firm at:

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

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

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