Foreign investment by contributing capital, purchasing shares and purchasing stakes of company in Vietnam

Foreign investment by contributing capital, purchasing shares and purchasing stakes of company in Vietnam

Pursuant to Vietnam”s Investment Law 2020 and Decree No. 31/2021/ND-CP dated March 26th, 2021 of the Vietnamese Government guiding a number of articles of the investment law (Decree 31/2021/ ND-CP), this page presents a number of legal provisions on foreign investment by contributing capital, purchasing shares and purchasing stakes of company in Vietnam.

I. Conditions for foreign investment by contributing capital, purchasing shares and purchasing stakes of company in Vietnam.

Foreign investment by contributing capital, purchasing shares and purchasing stakes of company already formed  in Vietnam must satisfy the conditions specified in Clause 2, Article 24 of the Law on Investment, including:

1) Conditions on market access for foreign investors when contributing capital, buying shares or purchasing capital contributions in companies already established in Vietnam as prescribed in Clause 3, Article 9 of the Law Investment and Articles 15, 16 and 17 of Decree 31/2021/ ND-CP; (See details, Click here)

2) Conditions on assurance of national defense and security and land use conditions applicable to companies in which foreign investors contribute capital, purchase shares or purchase capital contributions in case such company has Certificates of land use rights in islands, communes, wards, border towns and coastal communes, wards and townships; Other areas affecting national defense and security, except for companies implementing investment projects in industrial parks, export processing zones, hi-tech parks and economic zones established under the Vietnam Government”s regulations. .

II. The cases which foreign investor shall register capital contribution or purchase of shares or stakes of a company in Vietnam.

A foreign investor shall follow procedures for registration of capital contribution or purchase of shares or stakes of a company prior to change of members or shareholders in one of the following cases:

1) The capital contribution or purchase of shares or stakes increases the ownership ratio by foreign investors in a company conducting industries and lines limited market access for foreign investors in Vietnam (See more details, Click here);

2) The capital contribution or purchase of shares or stakes results in a foreign investor or company specified in Points a, b and c below 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 company:
a) Over 50% of its charter capital or more is held by a foreign investor(s) or the majority of the general partners are foreigners if the business entity is a partnership;
b) Over 50% of its charter capital or more is held by a business entity(ies) mentioned in Point a of this Clause;
c) Over 50% of its charter capital or more is held by a foreign investor(s) and a business entity(ies) mentioned in Point a of this Clause.

3) Foreign investment by contributing capital, purchasing shares and purchasing stakes of company 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 of Vietnam.

III. Application files for registration of capital contribution or purchase of shares or stakes of a company in Vietnam

1. Company with foreign investors to contribute capital, purchase shares or purchase capital contributions in the cases specified in Clause II above shall submit 01 application for registration of capital contribution or share purchase. share, purchase capital contribution to the investment registration agency where the company”s head office is located. Application files include:
a) A written registration for capital contribution, share purchase or capital contribution purchase, including the following contents: information on enterprise registration of the company 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 companies; expected transaction value of the contract of capital contribution, share purchase, purchase of contributed capital; information on investment projects of companies (if any);
b) Copies of legal papers of individuals, organizations contributing capital, buying shares, purchasing capital contributions and companies 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 companies in which foreign investors contribute capital, purchase shares, purchase capital contributions or between foreign investors and shareholders or members of that company;
d) A copy of the certificate of land use rights of the company 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).
e. Time processing: 15-30 days

2. Except for the cases specified in Clause II above, companies with foreign investors investing in the form of capital contribution, share purchase or purchase of contributed capital shall carry out registration procedures. change members and shareholders at the business registration office in accordance with the law on enterprises and other laws corresponding to each type of company.

Lawyer Vietnam Law Firm provides assistance to clients for registration of capital contribution or purchase of shares or stakes of a company in Vietnam. Any information, feel free to contact us.

Lawyer Vietnam Law Firm- Vietnamese Lawyers