Here we answer the question of in which instances an investor is required to carry out the registration procedures of making a capital contribution, a share purchase, or the purchase of contributed capital in an investment in Vietnam?
Investing in an established Vietnamese entity (a “target business”) by making a capital contribution, conducting a share purchase, or by purchasing contributed capital in a target business is one option for foreign investors to consider.
Here we do not discuss investment procedures in public companies and some enterprises operating in specific fields such as security companies, fund management companies, credit institutions, insurance companies, and companies in the oil and gas industry.
If the target business meets the required conditions, investors who decide to invest in a target business must complete the procedures for registration of capital contribution, purchase of shares, and purchase of contributed capital with the Department of Planning and Investment according to the provisions of Investment Law No. 61/2020/QH14 if it falls into one of the following cases:
- A target business conducting the business lines which have conditional market access to foreign investors;
- The contribution of capital, share purchase, purchase of contributed capital by foreign investors results in the foreign investor’s capital ownership ratio accounting for more than 50% of the target business’s charter capital;
- A target business has a certificate of land use right “in the island, border line communes, wards, townships; coastal communes, wards, towns; areas affecting national defense and security”.
Upon the completion of the procedures for registration of capital contribution, share purchase, and purchase of contributed capital, a notice will be issued by the investment registration authority then the foreign investor must complete the procedures for registration of a change of members or shareholders at the business registration office.
Except for the cases listed above, the target business with foreign investors investing in the form of capital contribution, share purchase, purchase of contributed capital only needs to carry out the procedures for registration of business change.
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Note: This article is for informational purposes only and it is not a legal advice. The content of the article represents its own of TTVN Legal, it subject to change without prior notice.