TRANSFERRING PROFITS FROM VIETNAM TO OVERSEAS: GUARANTEE POLICY RELATED TO TRANSFER OF INVESTOR'S PROFIT FROM VIETNAM TO OVERSEAS

-
Submit:

In the process of providing legal consulting services, OTIS LAWYERS realizes that one of the issues that foreign investors are particularly interested in is the guarantee policy of the Vietnamese State regarding the transfer of profits from Vietnam to overseas (transferring profits from Vienam to overseas). Therefore, OTIS LAWYERS would like to provide the following article with a desire to provide clients with the necessary legal knowledge to minimize risks when business investment in Vietnam.

ASSETS ARE ALLOWED TO BE TRANSFERRED FROM VIETNAM TO FOREIGN COUNTRIES

According to Article 12, Investment Law 2020, after full financial obligations to the Vietnamese government, foreign investors are permitted to transfer the following assets overseas:

  • Investment capital and proceeds from the liquidation of its investment;
  • Their income is obtained from business investment activities;
  • Money and other assets under the lawful ownership of the investors.

CONDITIONS FOR TRANSFERRING PROFITS FROM VIETNAM TO OVERSEAS

According to Circular No. 186/2010/TT-BTC of November 18, 2010, guiding the offshore remittance of profits earned by foreign organizations and individuals from their direct investment in Vietnam under the investment law, foreign investors must be met the following conditions to transfer profits abroad:

  • Foreign organizations and individuals that make direct investments in Vietnam.
  • Foreign organizations and individuals have profits and no longer have accumulated losses after such losses have been carried forward under the law on enterprise income tax. 
  • Foreign organizations and enterprises have completed financial obligations to the State of Vietnam under the provisions of law.
  • Foreign organizations and enterprises submitted audited financial statements and enterprise income tax finalization declarations of that year to direct managing tax offices.

FORM OF TRANSFERRING PROFITS FROM VIETNAM TO OVERSEAS

(transferring profits from Vienam to overseas)

According to the provisions of Clause 2, Article 2, Circular 186/2010/TT-BTC, profits from Vietnam may be remitted abroad in cash or in kind

  • Profits are remitted abroad in cash: Foreign investors must transfer oversea the following amounts through direct investment accounts. In case an FDI enterprise has to close its direct investment account due to its dissolution, termination, or transfer of the ownership of an investment project which results in a change in its legal status, the foreign investors have the right to use their foreign currency and Vietnamese dong accounts opened at authorized banks to purchase foreign currency and transfer their direct investments and lawful revenues overseas.
  • Profits are remitted abroad in kind and converted of objects value are goods not subject to an export ban. Goods can be exchanged for in-kind value in accordance with the provisions of the law on the import and export of goods and relevant laws in Vietnam.

TIME FOR PROFITS REMITTANCE ABROAD

According to the provisions of Article 4, Circular 186/2010/TT-BTC, foreign investors can remit profits abroad at the following specific times:

Annual profits remittance abroad

Foreign investors can annually remit abroad profits they shared or earn from their direct investment in Vietnam when the fiscal year is over after enterprises in which foreign investors join investment have completed financial obligations to the State of Vietnam under the provisions of law and submitted audited financial statements and enterprise income tax finalization declarations of that year to direct managing tax offices.

Profits remittance abroad when finished direct investment activities in Vietnam

Foreign investors can remit abroad profits when they finished direct investment activities in Vietnam after enterprises in which foreign investors join investment have accomplished financial obligations towards the Vietnam State under law, submitted audited financial statements and enterprise income tax finalization declarations to direct managing tax offices, and implement fully all the obligations under the Law on Tax Administration.

PROCEDURES FOR TRANSFERRING PROFITS FROM VIETNAM TO OVERSEAS

Foreign investors may directly make, or authorize enterprises in which they joint invest to make notices on the profits remittance abroad according to the adopted forms attaching this Circular send to direct managing tax offices of the enterprise in which foreign investors join investment at least 7 working days before the profit remitted abroad.

Notification of profits remittance abroad according to the form promulgated together with Circular 186/2010/TT-BTC of the Ministry of Finance guiding the remittance of profits earned by foreign organizations and individuals from their direct investment in Vietnam under the investment law.

OTIS & PARTNERS LAWFIRM

Address: No. K28, Lane 68 Trung Kinh, Yen Hoa Ward, Cau Giay District, Hanoi City.

Hotline: (+84) 987 748 111

Email: [email protected]

Website:  https://otislawyers.vn/ 

Comments