PROCEDURES FOR CAPITAL CONTRIBUTION OF FOREIGN INVESTORS INTO VIETNAM LATEST IN 2023

As the economy grows, more and more foreign investors invest in Vietnam. In order to attract more investors, the law has prescribed many forms for investors to choose in accordance with their needs. Including the form of investment in the form of capital contribution, purchase of shares, capital. What are the procedures for capital contribution by foreign investors? Find out with OTIS LAWYERS in the article below!

Legal grounds

Law on Investment 2020

Official Dispatch No. 8909/BKHDT-PC

Forms of capital contribution by foreign investors

Article 24 of the Law on Investment 2020 stipulates that foreign investors contributing capital, buying shares or purchasing capital from economic organizations must satisfy the following regulations and conditions:

• Market access conditions for foreign investors specified in Clause 3, Article 9 of the Law on Investment 2020
• Ensuring national defense and security in accordance with the provisions of the Law on Investment 2020
• Regulations of land law on conditions for receiving land use rights, conditions for using land in islands, communes, wards, border towns, communes, wards and coastal townships.

Investors may contribute capital to economic organizations in the following forms:

• Purchase of shares issued for the first time or additionally issued by a joint-stock company;
• Contributing capital to limited liability companies, partnerships;
• Contributing capital to other economic organizations

Procedures for capital contribution by foreign investors

What is the procedure for changing members and shareholders?

Investors contributing capital to economic organizations must meet the conditions and carry out procedures for changing members and shareholders according to the provisions of law corresponding to each type of economic organization.

If falling into one of the following cases, the foreign investor will have to carry out the procedures for registration of capital contribution before changing members or shareholders:

• The contribution of capital, purchase of shares, purchase of contributed capital increases the foreign investors' ownership rate in economic organizations engaged in business lines and trades with conditional market access for foreign investors. ;
• The contribution of capital, purchase of shares, purchase of contributed capital leads to the fact that foreign investors and economic organizations specified in Clause 1, Article 23 of this Law hold more than 50% of the charter capital of the economic organization in the following cases: increasing the rate of ownership of charter capital of foreign investors from below or equal to 50% to over 50%; increase the rate of ownership of charter capital of foreign investors when foreign investors already own more than 50% of charter capital in economic organizations;
• Foreign investors contribute capital, purchase shares, purchase capital contributions from economic organizations 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.

Procedures for registration of capital contribution

Official Dispatch No. 8909/BKHDT-PC stipulates the procedures for registration of capital contribution as follows:

Step 1: Prepare documents

Dossier include:

• The capital contribution registration document has the following contents:

1. Information on enterprise registration of economic organizations to which foreign investors plan to contribute capital, purchase shares or capital contributions;
2. Business lines;
3. List of founding shareholders, list of shareholders being foreign investors (if any);
4. Foreign investor's rate of ownership of charter capital before and after capital contribution, share or capital purchase to economic organizations;
5. Transaction value of contracts for capital contribution, share or capital purchase;

• Information on investment projects of economic organizations (if any);
• Copies of legal papers of individuals, capital-contributing organizations and economic organizations with capital contributions by foreign investors;
• Written agreement on capital contribution between foreign investors and economic organizations receiving capital contribution;
• Declaration document (enclosed with a copy) Certificate of land use rights of economic organizations receiving capital contributions from foreign investors (for cases related to national defense, security, island land, commune, ward, border town, commune, ward, coastal town).

Step 2: Submit the dossier

Submit the dossier at the Department of Planning and Investment where the economic organization receiving capital contribution is located.

Based on the written approval of the Investment Registration Authority, economic organizations with capital contributions by foreign investors shall carry out procedures for changing members and shareholders at the Business Registration Office - Department of Planning and Investment. where the head office is located.

Above is our consultation on procedures for foreign investors to contribute capital to Vietnam. We hope that this will be a useful reference for readers who want to learn the provisions of the law on investment.

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