Form and procedures of investment of foreign investors (Part 1)

I. LEGAL BASIS:

• Law on Emterprises 2014
• Law on Investment 2014
• Law on Public Investment 2014
• Decree No. 63/2018/NĐ-CP on investment in the form of public – private partnership
• Decree No. 118/2015/NĐ-CP on guildlines some articles of the Law on Investment
• Circular No. 16/2015/TT-BKHĐT on regulations on application forms for investment procedures and reporting forms on investment in Vietnam.

II. FORMS AND PROCEDURES OF INVESTMENT:

1. Capital contribution, share or capital purchase:

1.1. The first case:

The investor contributes capital to or purchase shares/stakes of the business organization:

• The investor contributes capital, buy shares or capital contributions of business organizations engaged in business lines subject to conditions applied to foreign investors.
• The contribution of capital, share purchase lead to the ownership ratio of foreign investors and economic organizations stipulated in Points a, b and c, Clause 1, Article 23 of the Law on  Investment 2014 rise from less than 51% to 51% or more;
• The contribution of capital, share purchase lead to the ownership ratio of foreign investors and economic organizations stipulated in Points a, b and c, Clause 1, Article 23 of the Law on  Investment 2014 rise from 51% or more to a higher level.

a) 51% of charter capital or more is held by foreign investors, or the majority of the general partners are foreigners if the business organization is a partnership;

b) 51% of charter capital or more is held by the business organizations mentioned in Point a of this Clause;

c) 51% of charter capital or more is held foreign investors and the business organizations mentioned in Point a of this Clause.]

How to carry out procedures for registration of capital contribution, share purchase, repurchase of contributed capital of foreign investors?

 a. Document to provide:

b. Time for consideration: Within 15 days from the date of receiving valid document.

c. Agency implementing the procedure: Department of Planning and Investment where the capital contribution receiver headquartered.  

d. Result of the procedure: Notice on the satisfaction of the investment conditions in the case of capital contribution, share purchase, capital purchase of foreign investors.

* Besides, foreign investors shall meet the additional conditions:

- An investment capital account is required to be opened at a Vietnamese commercial bank. All activities of buying, selling shares, transferring contributed capital, collecting and using dividends, distributing profits, transferring money abroad and other activities related to investment in Vietnamese enterprises are via this account;

- A copy of the business registration certificate or other equivalent document proving the legal status certified by the competent authority of the home country where the organization has registered;

- Other conditions specified in the charter of the enterprises in which foreign investors contribute capital, purchase shares and they are not contrary to the provisions of law.

- Foreign investors are responsible for the validity of the documents provided.

1.2. Procedure of registration on adjudging capital, capital contribution ratio:

In the case that foreign investors carrying out the procedures for registration of capital contribution, share purchase, repurchase of contributed capital meet the investment conditions of capital contribution, purchase of shares, repurchase of contributed capital, they shall register the change of charter capital, change the charter capital contribution as follows:

a. Document to provide

b. Time for considering: Within 05 days from the date of receiving valid document.

c. Agency implementing the procedure: Department of Planning and Investment.

d. Result of the procedure: Business registration certificate if the document is valid.

1.2. The second case:

Foreign investors not fall into one of the cases mentioned in Section 1.1 shall not need to carry out procedures for registration of capital contribution, share purchase, repurchase of contributed capital. They shall carry out the procedures in Section 1.2 on the registration of changes in charter capital, change of capital contribution ratio.

To be continued...

Legal expert: Thuy Vy (0905.045.915)

FDVN Law Firm