Registration of capital contribution, shares or stakes purchase of Vietnamese companies

Registration of capital contribution, shares or stakes purchase of Vietnamese companies

I. Forms of capital contribution or purchase of shares or stakes of Vietnamese companies.

Foreign investors contributing capital, purchasing shares or stakes of Vietnamese companies are guided in Article 25 of  Investment Law 2020 of Vietnam on the forms of contributing capital, purchasing shares or stakes.

1. A foreign investor may contribute capital to a Vietnamese company in the following forms:
a) Purchase of shares of joint-stock companies through the initial public or additional issuance;
b) Contribution of capital to limited liability companies and partnerships;
c) Contribution of capital to other business entities not mentioned in Point a and Point b of this Clause.

2. A foreign investor may purchase shares or stakes of a Vietnamese copmpany in the following forms:
a) Purchase of shares in a joint-stock company from such company or its shareholders;
b) Purchase of stakes of members of a limited liability company to become a member of such limited liability company;
c) Purchase of stakes of a capital contributing member of a partnership to become a capital contributing member of such partnership;
d) Purchase of stakes of members of other economic entities not mentioned in Points a, b and c of this Clause

II. Registration of capital contribution, shares or stakes purchase of Vietnamese companies

Foreign investors registering to contribute capital, buy shares or stakes of Vietnamese companies are guided in Article 26 of the 2020 Investment Law of Vietnam.

1. Upon contributing capital, purchasing shares or stakes of a Vietnamese company, the investor shall satisfy conditions and follow procedures for change of members or shareholders in accordance with regulations of law applicable to each type of Vietnamese companies.

2. A foreign investor shall follow procedures for registration of capital contribution or purchase of shares or stakes of a Vietnamese companies prior to change of members or shareholders in one of the following cases:
a) The capital contribution or purchase of shares or stakes increases the ownership ratio by foreign investors in a Vietnamese company conducting business in the business lines allowed in market with conditions applied to foreign investors;
b) The capital contribution or purchase of shares or stakes results in a foreign investor or Vietnamese companies specified in Points a, b and c Clause 1 Article 23 of this Law holding over 50% of the charter capital of the company in the following cases: The charter capital ownership ratio by the foreign investor is increased from less than or equal to 50% to over 50%; the charter capital ownership by the foreign investor is increased while such foreign investor is holding over 50% of the charter capital of the Vietnamese companies.
c) The foreign investor that contributes capital, purchases shares or stakes of a Vietnamese companies 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.

3. Investors other than those mentioned in Clause 2 of this Article shall follow procedures for changing shareholders/members as prescribed by law when contributing capital, purchasing shares or stakes of business entities. If such investors wish to register their capital contribution or purchase of shares or stakes of business entities, regulations in Clause 2 of this Article shall be complied with.

III. Application files for registration of capital contribution, shares or stakes purchase of Vietnamese companies

The application file of foreign investors registering to contribute capital, buy shares or stakes of Vietnamese companies is specified in Clause 2, Article 66 of Decree 31/2021/ND-CP.

Vietnamese companies with foreign investors to contribute capital, purchase shares or stakes in the cases specified in Clause 2, Article 26 of the Law on Investment shall submit 01 application files for registration of capital contribution, shares or stakes purchase to the investment registration agency where the Vietnamese company’s  head office is located.

The application files include:

a) A written registration for capital contribution, shares or stakes purchase including the following contents: information on enterprise registration of the economic organization to which the foreign investor intends to contribute capital, purchase shares, or purchase shares. capital contribution; business; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); rate of ownership of charter capital of foreign investors before and after capital contribution, share purchase, purchase of capital contribution to economic organizations; expected transaction value of the contract of capital contribution, share purchase, purchase of contributed capital; information on investment projects of economic organizations (if any);

b) Copies of legal papers of individuals, organizations contributing capital, buying shares, purchasing capital contributions and economic organizations with foreign investors contributing capital, buying shares or purchasing capital contributions;

c) A written agreement in principle on capital contribution, share purchase or capital contribution purchase between foreign investors and economic organizations in which foreign investors contribute capital, purchase shares, purchase capital contributions or between foreign investors and shareholders or members of that economic organization;

d) A copy of the certificate of land use rights of the economic organization in which foreign investors contribute capital, purchase shares or purchase capital contributions (for the case specified at Point b, Clause 4, Article 65 of Decree 31/2021/ND-CP ).

For any information about foreign investors contributing capital, purchase shares or stakes of Vietnamese companies, please contact us.

LAWYER VIETNAM LAW FIRM- Vietnamese Lawyers, Attorney at law, Solicitor, Advocate, Barrister