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Along with the continuous development of the economic integration process, more and more foreign enterprises are investing in our country. And to be able to conduct direct investment activities in Vietnam, these enterprises need to have a direct investment capital account in foreign currency or in Vietnam dong. So what is a direct investment capital account? Find out with OTIS LAWYERS in the article below!
Legal basis
Circular 06/2019/TT-NHNN guiding foreign exchange management for foreign direct investment activities in Vietnam
What is a direct investment capital account?
Pursuant to the provisions of Account 5, Article 3 of Circular 06/2019/TT-NHNN, Direct Investment Capital Account is understood as a payment account in foreign currency or in Vietnam Dong; by enterprises with foreign direct investment capital; foreign investors open at authorized banks to perform transactions related to foreign direct investment activities in Vietnam; in accordance with relevant laws.
Subjects opening direct investment capital accounts
The subjects allowed to open and use direct investment capital accounts are specified in Clause 1, Article 5 of Circular 06/2019/TT-NHNN. Include:
– Enterprises with foreign direct investment capital
- Enterprises established in the form of investment to establish economic organizations; including foreign investors as members or shareholders; and must carry out the procedures for granting an investment registration certificate in accordance with the law on investment;
- Foreign-invested enterprises owning 51% or more of the enterprise's charter capital, including:
- Enterprises with foreign investors contributing capital, buying shares or capital contributions to the enterprise; (operating in business lines with conditions or without conditions applicable to foreign investors) which results in foreign investors owning 51% or more of the enterprise's charter capital;
- Enterprises established after separation, merger or consolidation; resulting in foreign investors owning 51% or more of the enterprise's charter capital;
- Newly established enterprises according to the provisions of law;
- Project enterprises established by foreign investors to implement PPP projects in accordance with the law on investment.
– Foreign investors participate in BCC contracts, directly implement PPP projects in the absence of project enterprises (hereinafter referred to as foreign investors directly implementing PPP projects).
Some notes when using capital accounts
Open a direct investment capital account
When opening a direct investment capital account, it is necessary to note the following points:
Firstly, it is necessary to open an account in a foreign currency at an authorized bank; in order to carry out lawful receipt and payment transactions in foreign currencies; related to foreign direct investment activities in Vietnam.
Secondly, corresponding to the type of foreign currency in which investment capital is contributed; may only open one account in that foreign currency at one authorized bank.
Third, the case of investment in Vietnam dong; may open 01 account in Vietnam dong at an authorized bank; the place that opened a foreign currency account in order to conduct lawful revenue and expenditure transactions in Vietnam dong; related to foreign direct investment activities in Vietnam.
Fourth, in case foreign investors participate in many BCC contracts or directly implement many PPP projects; Foreign investors must open a separate investment account corresponding to each BCC contract, PPP project.
Fifth, the case of making foreign loans; that the borrowing currency does not correspond to the currency used by the foreign direct investment enterprise to open the investment account; enterprises may open more accounts for borrowing and repaying foreign debts in borrowed currency at authorized banks; where the account was opened; to conduct lawful revenue and expenditure transactions related to foreign loans; according to the provisions of the law on borrowing and paying foreign debts of enterprises.
Change the bank of direct investment capital account
The order and procedures for changing the authorized bank for the account as follows:
– Step 1: Open an account at another authorized bank
– Step 2: Transfer the entire balance of the previously opened direct investment capital account to the new direct investment capital account, then close the previously opened direct investment capital account
Note: Payment accounts at other authorized banks can only be used to conduct revenue and expenditure transactions in accordance with the law after completing the above steps.
Close direct investment capital account
Enterprises with foreign investors owning 51% or more of charter capital; project enterprises established by foreign investors to implement PPP projects in accordance with the law on investment. It is required to close the account in the following cases:
– After performing the transaction of transferring shares, contributed capital or issuing additional shares to increase charter capital in the foreign direct investment enterprise; the rate of share ownership and capital contribution of foreign investors in this enterprise is below 51%;
– After the foreign direct investment enterprise is a public company with listed shares; or register for trading on the Stock Exchange.
Investment law consulting service of OTIS LAWYERS
OTIS LAWYERS are always proud to be a professional unit in the field of investment law consulting. A team of highly qualified lawyers with extensive experience and dedication to clients, we believe that we will provide you with the best, most professional service, reasonable cost and time. Then, complete the process as quickly as possible. We commit that all client information is absolutely confidential and client interests always come first.
For any questions or comments, please contact:
OTIS AND PARTNERS LAW FIRM
Office address: K28 - Group K, Lane 68 Trung Kinh, Yen Hoa Ward, Cau Giay District, Hanoi
Email: [email protected]
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