Foreign investors contribute capital and purchase shares of companies in Vietnam

4/1/2021

According to the current law, foreign investors have the right to contribute capital to, purchase shares, purchase capital contributions in Vietnamese companies.

The following article provides some regulations on foreign investors' capital contribution, buy shares or capital contribution in enterprises in Vietnam.

In case the Company needs further assistance, please contact us here.

Forms of capital contribution, share purchase, capital contribution purchase by foreign investors

  • Buying shares in the initial issue or additional shares of a joint stock company;
  • Capital contribution to limited liability companies and partnerships;
  • Purchase of shares in a joint stock company from a company or a shareholder;
  • Purchase of equity interests from members of a limited liability company to become a member of a limited liability company;
  • Purchase of equity interests from capital contributors in a partnership to become a capital contributor of a partnership;

Cases in which foreign investors contribute capital, purchase shares or purchase capital contributions of Vietnamese companies:

Case 1: In case a foreign investor contributes capital, buys capital contributions or buys shares of less than 51% in an enterprise in Vietnam, and invests in business in unconditional industries.

Investor contributes capital / transfers capital, declares tax on income from the transfer (if any)

Enterprises only need to carry out the procedure for changing the Enterprise Registration Certificate (formerly called the business registration change procedure).

Application needs to be prepared:

1. Notice of changes in business registration contents;

2. Decision on the change of the company;

3. Minutes of the meeting on the company change;

4. The transfer contract and the papers certifying the completion of the assignment, certified by the legal representative of the company;

5. List of capital contributors or List of foreign shareholders;6. Notarized copy of the investor's passport / business registration certificate.

Implementation procedures:

The enterprise submits its application at the business registration office

Within 03 working days after receiving a valid dossier, the business registration agency shall issue a new enterprise registration certificate to the enterprise.

Case 2: In case a foreign investor contributes capital, buys capital contributions, buys shares in business in conditional industries or where a foreign investor contributes capital, purchases shares, or purchases a Contribution of capital to Vietnamese companies leads to foreign investors holding more than 51% of charter capital.

Procedure steps:

Step 1: Register for capital contribution, purchase of capital contribution, purchase shares in a Vietnamese enterprise at the investment registration authority

Application needs to be prepared:

1. A document of registration of capital contribution, share purchase or capital contribution purchase includes the following contents: information on the economic organization in which the foreign investor is expected to contribute capital, purchase shares or capital contribution; ratio of foreign investors' ownership in charter capital after capital contribution, share purchase, or capital contribution to economic organizations;

2. Copy of identity card, ID card or passport for individual investor; a copy of the Certificate of Establishment or another equivalent document certifying the legal status of the institutional investor.

Implementation procedures:

Foreign investors apply at the business registration office

Within 15 working days after receiving a valid dossier, the business registration agency shall issue a notice of the satisfaction of the conditions for capital contribution, share purchase, capital contribution and Vietnamese enterprise.

Step 2: Foreign investors contribute capital, purchase shares, purchase capital contributions in Vietnamese enterprises.

In case a foreign investor contributes more than 51% of its capital, a Vietnamese company shall open a direct investment capital account. Investors contribute capital, transfer capital through direct investment capital account.

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

Step 3: Change the Business Registration Certificate to add foreigners in the application for business registration submitted at the Business Registration Office - Department of Planning and Investment

The procedure is similar to Case 1 mentioned above.