Procedure for registration of capital contribution, purchase of share and contributed capital by foreign investors

Capital contribution, purchase of share and contributed capital are the popular investment forms in Vietnam for foreign investors. According to the provisions of the current Law on Investment, when carrying out these investment activities, the foreign investors must carry out procedures for registration of capital contribution, purchase of shares or contributed capital in certain cases.

1. Forms of capital contribution, purchase of share and contributed capital

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;
  • Contribute capital to limited liability companies, partnerships;
  • Contribute capital to other economic organizations.

Investors purchase shares or contributed capital from economic organizations in the following forms:

  • Buy shares of a joint stock company from the company or shareholders;
  • Purchase contributed capital of a member of a limited liability company to become a member of a limited liability company;
  • Purchase contributed capital of capital-contributing members in a partnership to become a capital-contributing member of a partnership;
  • Purchase contributed capital of members of other economic organizations.

2. Cases that MUST carry out procedure for registration of capital contribution, purchase of share and contributed capital

  • The contribution of capital, purchase of shares, purchase of contributed capital increases the foreign investors’ ownership ratio in economic organizations engaged in business lines with conditional market access for foreign investors; (see list here)
  • The contribution of capital, purchase of shares, purchase of contributed capital leads to the fact that foreign investors and foreign-invested economic organizations in accordance with the Law on Investment hold more than 50% of the charter capital of the economic organizations in the following cases: increasing the percentage of foreign investors’ ownership of charter capital from less than or equal to 50% to over 50%; increase the rate of ownership of charter capital of foreign investors when foreign investors already own more than 50% of charter capital in economic organizations;
  • Foreign investors contribute capital, purchase shares or purchase contributed capital from economic organizations with land use right certificates in islands and border communes, wards and townships; coastal communes, wards and towns; other areas affecting national defense and security.

3. Procedure for registration of capital contribution, purchase of shares and contributed capital

Profile composition:

  • Written registration of capital contribution, purchase of shares or contributed capital;
  • Copy of legal papers of individuals and organizations contributing capital, buying shares, contributed capital and economic organizations with foreign investors contributing capital, buying shares contributed capital;
  • Written agreement on capital contribution, purchase of share and contributed capital between foreign investors and economic organizations receiving capital contribution, purchase of shares or contributed capital;
  • Declaration document (enclosed with a copy) about Certificate of land use right of the economic organization receiving capital contribution, shares or capital contribution of foreign investors.

Settlement agency: the investment registration agency where the economic organization’s head office is located.

Processing time: 15 days from the date of receiving valid dossiers.

Result: Notice of satisfaction of conditions for capital contribution/purchase of sahre or contributed capital by foreign investors

Note: Investors who are not required to carry out procedures for registration of capital contribution, purchase of shares or contributed capital, only need to carry out procedures for changing shareholders and members as prescribed. If there is a need to register the capital contribution, purchase of shares or contributed capital from an economic organization, the investors shall follow the above procedures.

If you still have questions about this procedure, please contact CIS LAW FIRM for advice.

ENTERPRISE LEGAL DEPARTMENT – CIS LAW FIRM

109 Hoang Sa, Da Kao Ward, District 1, City. Ho Chi Minh
Phone: 028 3911 8581 – 028 3911 8580
Email: info@cis.vn