“In today’s globalized society, Vietnam is consistently considered as a country with an attractive business environment and great potential. A concrete indicator for this is the rapid increase of foreign-invested enterprises in Vietnam over the years. This has led to growth of inflow of foreign capital into Vietnam. However, it is not an easy task for investors to conduct transactions related to capital contribution from overseas into Vietnam in accordance with the law and to meet the requirements of the investment project. In this article, we provide readers with some legalities to be followed for contribution of investment capital when establishing a company in Vietnam.”
The need to use investment capital may not only arise after the enterprise establishment, but also during the preparation of investment process. To help readers have a closer view of the regulations on this matter, this article will be divided into two parts – ‘capital transfer during investment preparation’ and ‘capital contribution after company establishment’.
Transfer and use of capital during investment preparation, before a company is licensed to operate in Vietnam, there will be some expenses which must be borne to carry out procedures related to the preparation for the establishment of the company. These expenses include the deposit to rent the location of the investment project/company headquarters and the legal service fee incurred when applying for the investment project and company establishment. The said deposits or legal service fee may be considered as a part of the registered investment capital. Firstly, the investor must only contribute the remaining investment capital (after deducting the above expenses) once the company has been established. Otherwise, a separate cost from the investment capital may be paid by the investor which is not related to the registered investment capital. Next, investors only need to pay these expenses as normal transactions in accordance with the bank’s policy and foreign exchange laws. However, in order to record the above expenses, and the portion of the investment capital transferred and used during the investment preparation, some conditions specified in Article 8 of the Circular No. 06/2019/TT-NHNN must be met.
The contribution of investment capital after the company establishment: According to investment law, after the company is granted investment registration certificate and Enterprise Registration Certificate, the investor must contribute capital through the direct investment capital account of the enterprise. For detailed information about this, refer to the article named “Một số lưu ý khi góp vốn đầu tư trực tiếp nước ngoài” posted on our website. Besides, we would like to mention few important things based on practical operation:
To ensure compliance with Vietnamese law in the process of company establishment, investors in general, and foreign-invested enterprises in particular should pay attention to regulations related to the transfer and contribution of investment capital. The above article provides some legal factors and practical aspects in this regard to help investors and companies have a more comprehensive view to comply with the law and avoid possible sanctions for violations.
Published time: September 22, 2021
The article is based on current laws at the time as above and may no longer be relevant at the time readers access this article due to changes in applicable laws and specific cases that the reader wants to apply. Therefore, the article is for reference only.