Contents
- 1. Forms and conditions for capital contribution, share purchase to the organization
- 1.1. Forms of capital contribution to Vietnamese enterprises by foreign investors
- 1.2. Forms of buying shares and contributed capital of Vietnamese companies
- 1.3 Conditions for capital contribution, share purchase by foreign investors
- 2. Investment procedures in the form of capital contribution, share purchase
- 2.1 Foreign investors must carry out procedures for registration of capital contribution, purchase of shares to economic organizations in the following cases:
- 2.2. Investors who are not subject to procedures for registration of capital contribution, purchase of shares or contributed capital:
1.1. Forms of capital contribution to Vietnamese enterprises by foreign investors
According to Article 25 Investment Law 2020, foreign investors may contribute capital to economic organizations in the following forms:
- Buy shares issued for the first time or additionally issued shares of a joint-stock company. Foreign investors become shareholders of joint-stock companies.
- Contribute capital to limited liability companies, partnerships. Foreign investors become members of limited liability companies, members of partnerships.
- Contribute capital to other economic organizations.
Foreign investors purchase shares and capital contributions of economic organizations in the following forms:
- Buy shares of a joint stock company from the company or shareholder;
- Purchase of capital contributions of members of a limited liability company to become a member of a limited liability company;
- Purchase of capital contributions of capital-contributing members in a partnership to become a capital-contributing member of a partnership;
- Purchase of capital contributions of members of economic organizations other than the above cases.
The capital contribution, share purchase portion of foreign investors in the forms specified above must satisfy the following conditions:
The rate of ownership of charter capital of foreign investors is restricted in listed companies, public companies, securities trading organizations and securities investment funds; Government-owned enterprises, equitization or ownership conversion in other forms. (Clause 1, Article 23 of the Investment Law 2020)
Investment form, scope of activities, Vietnamese partners participating in the implementation of investment activities and other conditions under the provisions of international treaties to which the Socialist Republic of Vietnam is a signatory.
Foreign investors contribute capital, purchase shares or capital contributions to economic organizations operating in business lines with conditions applicable to foreign investors;
The capital contribution or purchase of shares or contributed capital results in a foreign investor or an economic organization in one of the following circumstances holding 51% or more of the charter capital of the economic organization:
i. Having a foreign investor holding 51% or more of the charter capital or having the majority of general partners being foreign individuals, for economic organizations being a partnership; or
ii. Having an economic organization at point i holding 51% or more of its charter capital; or
iii. Having foreign investors and economic organizations specified at Points i and ii holding 51% or more of charter capital.
The foreign investor that contributes capital, purchases shares or stakes of a business organization has a certificate of rights to use land on an island or in a border or coastal commune; in a coastal commune; in another area that affects national defense and security.
** Dossier for registration of capital contribution, share purchase:
A written registration for capital contribution, share purchase or capital contribution, including the following contents: information about the economic organization to which the foreign investor intends to contribute capital, purchase shares or capital contribution; rate of ownership of charter capital of foreign investors after capital contribution, purchase of shares or capital contribution to economic organizations;
Certified copies of the identity card, or passport for the investor being an individual; Certified copies of Business license or other equivalent document certifying legal status for investor being an organization.
** Procedures for registration of capital contribution, share purchase and capital contribution:
Step 1: The investor submits a dossier at the Department of Planning and Investment where the economic organization’s head office is located to register for capital contribution;
Step 2: After being approved for the registration of capital contribution, purchase of shares or contributed capital, the investor shall contribute capital, receive the transfer of shares and contributed capital, and carry out procedures in accordance with the Law on Enterprises.
Investors who are not in the case of carrying out the procedures for registration of capital contribution, purchase of shares mentioned above, and procedures for changing shareholders or members as prescribed by law when contributing capital or buying shares capital contribution of economic organizations. If there is a need to register the capital contribution, purchase of shares or contributed capital of an economic organization, the investor shall comply with regulations.
To save time learning about the law, filling out forms, waiting to submit the dossier, you can contact HTLaw for advice and support for Capital Contribution for Foreign Investor legal services.
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