Procedures of capital contribution, share and contributed capital purchase in Vietnam for foreign investors

Q.: Our company’s name is X Joint Stock Company

- Tax code:

- In Certificate of Business Registration: Capital: 500 million dong; 03 share-holders

- Area: Commercial service (Purchasing and repairing CNC machine)

If a Chinese company invested in X company, will Chinese company purchase shares and how much is maximum percentage?

A.: Thank you for placing your trust in consulting department of Ha Thi. We have scrutinized your question and this is our response:

I. Legal grounds

- Vietnam’s WTO Commitments on Services

- Law on Investment 2020

- Law on Enterprise 2020

II. Forms for foreign investor to invest in Vietnam

In accordance with Art. 25 of Law on Investment 2020 stipulated forms of capital contribution, share and contributed capital purchase for foreign investor:

- Purchasing share of joint stock company from that company or shareholder;

- Capital contribution, contributed capital purchase from member of company limited for the purpose of becoming member of that company;

- Capital contribution, contributed capital purchase from member of partnership for the purpose of becoming member of partnership.

Hence, Chinese company is entitled to invest to X joint stock company as the form of share purchase. However, to do so, Chinese company need to meet requirments of treaties and laws on the area of the company. To goods purchase area which is the service of distribution, in compliance with WTO Commitments on Service, the maximum capital that the Chinese company is able to purchase is 100%.

III. Procedures

Case 1: Chinese company owns under or equal to 50% of charter capital of X company, X company only needs to apply for amendment of business registration at the Department of Plan and Investment, the application for capital contribution, share and contributed capital purchase is unnecessary. The dossiers shall be submitted at Business registration agency. In 03 working days, in case of appropriate dossiers, the result of the application shall be sent to applicant.

Case 2: Chinese company owns over 50% of charter capital of X company, it is necessary to apply for capital contribution, share and contributed capital purchase at the Department of Plan and Investment. In 15 working days, in case of appropriate dossiers, the agency shall issue Notification on eligibility of capital contribution, share and contributed capital purchase for foreign investor. After that, X company needs to apply for amendment of business registration at the Chamber of Business Registration of Department of Plan and Investment.

Note: After purchasing the whole shares, Chinese company needs to renew the Certificate of Business Registration, Certificate of Retail (in the event of retail and export/import).

IV. Dossiers

- Certified copy of Business Registration of Chinese company;

- Agreement of Share Purchase between two parties.

These are procedures for capital contribution, share and contributed capital purchase. Should you have any question, please do not hesitate to contact us via online consultation hotline: 0943891828 or via email, wechat and zalo.

     We are willing to cooperate with You!

     Sincerely!