THE TRANSFER OF INVESTMENT CAPITAL: LEGAL INFORMATION FOR INVESTORS

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After establishing FDI enterprise, investors shall transfer registered capital to operate their company. During the consultation process, investors often ask some questions such as: When must they transfer the capital? How is the capital transfer made? Can the capital transfer be made once time or many times? What should they do if they cannot transfer enough capital before the deadline?   In this article, OTIS LAWYERS would like to answer all of these questions about the transfer of investment capital.

Direct investment capital account

According to Circular No.06/2019/TT-NHNN dated 26 June 2019 of the Governor of the State Bank providing guidance on foreign exchange control for foreign direct investment in Vietnam, after being granted the Investment Registration Certificate and the Enterprise Registration Certificate, FDI company shall open direct investment capital account to contribute capital, transfer capital, transfer profit and other legal incomes abroad.

“Direct investment capital account” shall mean a payment account in foreign currency or Vietnam dong opened by a foreign direct investment enterprise or a foreign investor at an authorized bank to perform the transactions related to foreign direct investment activities in Vietnam.

Opening of direct investment capital account

The application dossiers for opening bank account

According to the guidance of State Bank, the application dossiers for opening bank account for an organization shall be regulated and guided by banks, foreign bank branches. Depending on regulations of each banks, there will be its documents which need to be prepared. However, according to our experience in advising and supporting investors, we list some following documents that investors have to prepare when opening a bank account:

  1. Application form of bank for opening an account
  2. Passport of legal representative of company
  3. Investment Registration Certificate and Enterprise Registration Certificate
  4. Charter of company
  5. Decision on appointment of Director, Chief Accountant

The procedures to open a direct investment capital account at the bank will be guided in detail by bank clerk and in accordance with the regulations of each bank.

After completing the opening of direct investment capital account, investors need to make the capital contribution that written in investment registration certificate and enterprise registration certificate. The capital contribution of investors will be made through direct transfer to this investment capital account.

The deadline for making capital contribution

According to the regulations of Law on Enterprise, investors have to transfer capital within 90 days from the date of establishment of enterprise. Therefore, investors should know this deadline to transfer the capital in accordance with law regulations.

Notes

Related this issue, we would like to present some points that investors should note as follows:

  1. Legal representative of FDI company shall open the direct investment capital account at bank. In case legal representative authorizes for other person, he/she has to make the power of attorney. This document must be notarized and approved by the bank where the account is registered.
  2. FDI company shall open a direct investment capital account in foreign currency at 01 (one) authorized bank. Corresponding to the foreign currency of capital contribution only 01 (one) direct investment capital account can be opened in the same foreign currency at 01 (one) authorized bank
  3. In case of making investment in Vietnam dong, it is allowed to open 01 (one) direct investment capital account in Vietnam dong at the authorized bank where the direct foreign capital investment account in foreign currency has been opened
  4. The transfer of contributed capital to the direct investment account must be made by bank transfer from the investor's own account. In case other person or organization transfer money to this account, there will not be recognized as capital contribution of the investor.
  5. Investors can transfer the full amount of registered investment capital in one time or divide it into several times but must ensure that the full amount of capital is transferred within 90 days from the date of establishment of the enterprise.

There is some legal information about the opening of a direct investment capital account and the transfer of investment capital that we would like to share with investors. Hopefully, the information we provide in this article will be useful for investors when transferring investment capital.

OTIS LAWFIRM & PARTNERS 

Address: K28 Lane 68 Trung Kinh, Yen Hoa Ward, Cau Giay District, Hanoi

Mobile: 0987.748.111

Email: info@otislawyers.vn

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