The capital contribution by foreign investors in Commercial Companies

The capital contribution by foreign investors in Commercial Companies 

Table of contents

1. Forms of contributing capital by foreign investors in Commercial Companies

1.1. Contributing capital at a rate of 50% or less 

1.2. Contributing capital to a commercial company with over 50% of charter capital 

1. Consulting service in contributing capital to Vietnamese  Commercial Companies 

   Regarding Vietnam’s legal system, capital contribution, purchase of shares, and purchase of contributed capital in Vietnam‘s companies are investment forms foreign investors can make. In this article, Siglaw would like to share the procedures for foreign investors to contribute capital to commercial companies in Vietnam. 

Forms of contributing capital by foreign investors in Commercial companies 

Contributing capital at a rate of 50% or less

   Foreign investors contribute capital at a rate of 50% or less of charter capital in Vietnamese commercial companies, investing in businesses in sectors without conditions. In this case, the investors do not have to carry out capital contribution registration procedures but only implement procedures to change the Business registration certificate after capital contribution. 

Application includes: 

• Notification of change in business registration content of commercial companies; 
• Meeting minutes about changing commercial companies 
• List of members who are foreigners 
• Decision on change of trading companies 
• Transfer contract and documents certifying the completion of the transfer certified by the legal presentative of the trading companies
• Notarized copies: personal legal documents of individual investors; Business registration certificate or equivalent document certifying the legal status of the investors as an organization. 

 Commercial companies submit their application at the Business Registration Office where its head office is located and will be issued a new Business Registration Certificate within 3 working days from the date of receiving the valid application. 

Contributing capital to a commercial company with over 50% of charter capital

   Foreign investors contribute business investment capital to businesses in sectors with conditions or foreign investors holding more than 50% of the charter capital of trading companies.        

Step 1: Preparing application for capital contribution registration 

Foreign investors have to prepare full documents to carry out capital contribution registration procedures for commercial companies. 

• 01 application for registration of capital contribution: information about the business registration of the commercial company to which the foreign project consultant contributes capital; list of owners and members who are foreign consultants (if any); charter capital ownership ratio of foreign consultants before and after capital contribution; Company’s business lines; information about the investment project of the commercial company (if any) 
• Copies of legal papers of individuals and organizations contributing capital in commercial companies, and economic organizations with foreign investors contributing capital
• Written agreement on capital contribution between foreign investors and economic organizations receiving capital contribution or between foreign investors and members of economic organizations. 
• Declaration document (enclosed with a copy) Certificate of land use the right of the economic organization receiving capital contribution with land use right certificates in islands and border communes, wards and townships; coastal communes, wards and towns; other areas affecting national defense and security.
• Power of Attorney to submit documents

Step 2: Submission of documents 

Foreign investors submit at the Investment Registration Agency 

• If the commercial company is headquartered in an industrial park, export processing zone, high-tech zone, or economic zone is the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones 
• If the commercial company is headquartered outside an industrial park, export processing zone, high-tech zone or economic zone is the Department of Foreign Economic Relations – the Department of Planning and Investment of centrally affiliated provinces and municipalities where the company is headquartered. 

  Within 15 working days from the date of receiving a valid application, the Investment Registration Agency notices of meeting the conditions for capital contribution to a commercial company. 

Especially, in case foreign investors contribute capital to commercial companies that have land use right certificates in islands and border communes, wards and townships; coastal communes, wards and towns; other areas affecting national defense and security; Investment Registration Agency implements procedure: 

• Within 3 days from the date of receiving a valid application, the Investment Registration Agency will seek opinions from the Ministry of National Defense and the Ministry of Public Security on meeting the conditions to ensure national defense, security conditions and land use conditions. 
• Within 7 days from the date of receiving the written request from the Investment Registration Agency, the Ministry of National Defense and the Ministry of Public Security will give their opinions on meeting the conditions to ensure national defense and security for commercial companies with foreign investors contributing capital; If the required time limit is passed, there is no comment, it is considered to have agreed to meet the conditions for ensuring national defense and security for commercial companies with foreign investors contributing capital;
• Within 15 days from the date of receiving the valid dossier, the Investment Registration Agency considers meeting the capital contribution conditions and based on the opinions of the Ministry of National Defense and the Ministry of Public Security to notify investors. The written notification is sent to foreign investors and commercial companies and commercial companies with foreign investors contributing capital. 

Step 3: Contributing capital to the commercial company 

   Foreign investors open a direct investment capital account and make capital contributions, and transfer capital through that account. 

Members transferring capital declare taxes upon transfer according to the law on personal income tax and corporate income tax (if any) 

Step 4: Carrying out procedures to change company’s types, members or shareholders 

  After receiving capital contributions from foreign investors, a commercial company needs to carry out procedures to change members and shareholders of the company. In case, the capital contribution leads to a change in types of companies, it is necessary to implement procedures to change business registration according to regulations. 

   Those are some of Siglaw’s shares about conditions and procedures for capital contribution by foreign investors to commercial companies. If you have any questions related to the process of contributing capital to the company, please contact Siglaw for dedicated advice. 

  Consulting service 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: 

• Instruct in preparing necessary documents and information to draft documents for foreign investors to contribute capital to Vietnamese trading companies. 
• Advise legal regulations related to capital contribution to Vietnamese companies. \
• Consult on the most optimal advantages, legal preferences and tax incentives suitable for each customer. 
• Guide and consult on all foreign records and documents 
• Guide customers to carry out procedures at competent agencies. 
• Support and advise on tasks and procedures that need to be carried out after contributing capital to Vietnamese companies. 

For a comprehensive free consultation, please contact:

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

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

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