Foreign investors contribute capital to commercial companies

According to current legal regulations, contributing capital, buying shares or equities of Vietnamese companies is one of the investment forms that foreign investors are allowed to make. In the article below, Siglaw would like to share about the procedures for foreign investors to contribute capital to commercial companies in Vietnam.

Table of Contents

Cases where foreign investors contribute capital to commercial companies

Case 1: Contribute capital to a commercial company at 50% or less

Case 2: Contribute capital to a commercial company with over 50% of charter capital

Consulting services for capital contribution to commercial companies in Vietnam

Cases where foreign investors contribute capital to commercial companies

Case 1: Contribute capital to a commercial company at 50% or less

Foreign investors contribute capital with a ratio of 50% or less of charter capital in a commercial company in Vietnam, investing in business in unconditional business lines. In this case, investors do not need to carry out capital contribution registration procedures but only carry out procedures to change the Enterprise Registration Certificate (ERC) after finalizing the capital contribution.

Documents to be prepared:

• Notification of change in ERC content of the commercial company;
• Minutes of meeting on change of the commercial company;
• Decision on change of the commercial company;
• List of capital contributors who are foreigners;
• Transfer contract and documents certifying the completion of the transfer with confirmation of the legal representative of the commercial company;
• Notarized copy of personal legal documents of the individual investor; Notarized copy of the ERC or equivalent document confirming the legal status of the investor as an organization.

The commercial  company submits its application to the Business Registration Authority based on the headquarter’s province/city and will be granted a new ERC within 03 working days from the date of receipt of valid documents.. See more at Establishment of a foreign-invested commercial company.

Case 2: Contribute capital to a commercial company with over 50% of charter capital

Foreign investors contribute capital to invest in conditional business lines or the capital contribution ratio of foreign investors is over 50% of the charter capital of a commercial company.

Step 1: Prepare the capital contribution registration documents

Foreign investors need to fully prepare the following documents to carry out the procedure for registering capital contribution to a commercial  company:

• 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 the individual or organization that contributes capital or purchases shares/stakes and of the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors;
• 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.
• 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;
• 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 commercial 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 or purchase of shares or stakes.

In particular, if the business organization to which foreign investors contribute capital or whose shares/stakes 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 or whose shares/stakes are purchased by foreign investors; 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 or whose shares/stakes are purchased by foreign investors;
• 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 or whose shares/stakes are purchased by foreign investors.

Step 3: Make capital contributions to the commercial 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 commercial company needs to carry out procedures to change the members and shareholders of the company. In case the capital contribution to a commercial 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 of Siglaw’s shares on the conditions and procedures for foreign investors to contribute capital to a commercial company. For any questions related to the capital contribution process to a company, feel free to contact Siglaw for more answers and dedicated advice.

Consulting services for capital contribution to commercial companies in Vietnam 

“Customer satisfaction is a measure of Siglaw’s success. To us, every customer is a brand ambassador!”

Therefore, Siglaw takes care of each customer in the most thoughtful way. When using Siglaw law firm’s capital contribution consulting service in Vietnam, customers will receive enthusiastic support. most as follows:

1. Instructions for preparing necessary documents and information to prepare documents for foreign investors to contribute capital to Vietnamese commercial companies.
2. Answer and advise on legal regulations related to capital contribution to Vietnamese companies.
3. Consulting on the most optimal advantages, legal and tax incentives suitable for each customer.
4. Guidance and consultation on all foreign records and documents.
5. Guide customers to carry out procedures at competent state authorities.
6. Support and advise on tasks and procedures that need to be carried out after contributing capital to a Vietnamese company.

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.

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