DOES THE INVESTORS HAVE TO INCREASE CHARTER CAPITAL EQUAL TO THE REGISTERED CAPITAL CONTRIBUTION TO IMPLEMENT THE INVESTMENT PROJECT?
QUESTION
Dear TLK Law Firm, I currently have a question and hope to hear from you as follows: I am an investor investing in a project in Hai Phong. I have registered the capital contribution amount, however, I do not know whether it is necessary to increase the charter capital equal to the registered capital contribution amount to implement the investment project? Looking forward to your company's answer. Thank you!
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Thank you for your trust and sending questions to TLK Law Firm. Based on legal regulations and practical solutions, we would like to send you the following consulting content:
LEGAL BASIS
1. Investment Law No. 61/2020/QH14 passed by the National Assembly on June 17, 2020;
2. Decree No. 31/2021/ND-CP issued by the Government on March 26, 2021 detailing and guiding the implementation of a number of articles of the Investment Law;
3. Other legal documents providing relevant guidance.
CONSULTATION CONTENT
Currently, with the growing investment market trend, large-scale investment projects are growing stronger in Vietnam. When investors contribute capital and register to implement investment projects in the Vietnamese market, they must comply with Vietnamese law on investment. However, investors still do not clearly understand the regulations on whether investors must increase charter capital equal to the registered capital contribution to implement an investment project? This is a question that many customers sent to TLK Law Firm.
Therefore, through this article, we will answer your questions about "Do investors have to increase charter capital equal to the registered capital contribution to implement an investment project?".
Photo 1. Does the investor have to increase charter capital equal to the registered capital contribution to implement the investment project?_Hotline: 0972118764
I. SOME IMPORTANT LEGAL ISSUES RELATED TO INVESTORS INCREASING CHARTER CAPITAL EQUAL TO THE AMOUNT OF REGISTERED CAPITAL CONTRIBUTION TO IMPLEMENTING INVESTMENT PROJECTS
1. Charter capital of economic organizations established by foreign investors
Charter capital is the total value of assets contributed or committed to be contributed by company members and owners when establishing a limited liability company or partnership; is the total par value of shares sold or registered to buy when establishing a joint stock company.
Pursuant to Decree No. 31/2021/ND-CP, the charter capital of an economic organization established by a foreign investor to implement an investment project is not necessarily equal to the investment capital of the investment project. Economic organizations established by foreign investors contribute capital and mobilize other capital sources to implement investment projects according to the schedule specified in the Investment Registration Certificate.
2. Market access conditions for foreign investors
Pursuant to the Investment Law 2020, foreign investors are subject to the same market access conditions as domestic investors with the following access conditions:
(1) Charter capital ownership ratio of foreign investors in economic organizations;
(2) Investment form;
(3) Scope of investment activities;
(4) Investor's capacity; partners participating in investment activities;
(5) Other conditions as prescribed in laws and resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a member.
Thus, the market access conditions of foreign investors are the same as those of domestic investors, creating favorable conditions for investors to invest in Vietnam within the scope prescribed by law.
3. Operational term of the investment project
Pursuant to the Investment Law 2020, the operating period of investment projects is regulated as follows:
(1) Investment projects in economic zones must not exceed 70 years;
(2) Investment projects outside economic zones must not exceed 50 years. Investment projects implemented in areas with difficult socio-economic conditions, areas with particularly difficult socio-economic conditions or investment projects with large investment capital but slow capital recovery are The operating term of the investment project can be longer but must not exceed 70 years;
(3) If the investment project is allocated or leased land by the State but the investor is late in handing over the land, the time the State is late in handing over the land will not be counted in the operating term and implementation progress of the investment project private;
(4) At the end of the investment project's operating term, if the investor wishes to continue implementing the investment project and meets the conditions prescribed by law, the operating term will be considered for extension. of investment projects but not exceeding the maximum term specified in the Investment Law 2020, except for the following investment projects:
- Investment projects using outdated technology, potentially causing environmental pollution and resource-intensive;
- Investment projects in cases where the investor must transfer assets without compensation to the Vietnamese State or Vietnamese party.
Thus, with the operating time of each specific investment project, investors must seriously implement investment projects with corresponding deadlines as prescribed by law.
=> See more: What is investment capital? Can the company's loan capital from investors be converted into contributed capital?
Photo 2. Does the investor have to increase charter capital equal to the registered capital contribution to implement the investment project?_Hotline: 0972118764
II. SUMMARY OF THE ANSWER SECTION: DO INVESTORS HAVE TO INCREASE CHARTER CAPITAL EQUAL TO THE AMOUNT OF REGISTERED CAPITAL CONTRIBUTION TO IMPLEMENT INVESTMENT PROJECTS?
Dear Customers, from the above synthesis and analysis, TLK Law Firm would like to give the following answer:
According to Decree No. 31/2021/ND-CP, the charter capital of an economic organization established by a foreign investor to implement an investment project is not necessarily equal to the investment capital of the investment project. Therefore, investors do not have to increase charter capital by the amount of registered capital contribution to implement the investment project.
=> See more: Ways of increasing investment capital? In what ways do investors contribute capital to Vietnam?
III. HOW SHOULD YOU BEST CHOOSE AN ORGANIZATION THAT PROVIDES LEGAL SERVICES?
An organization providing quality and reputable legal services should have the following criteria:
First: Must be an official legal organization with a legal operating license;
Second: It is better if the Board of Directors must be lawyers, experienced and have high degrees;
Third: Have a team of lawyers and a systematic, professional, and thoroughly trained human resources system;
Fourth: Friendly, dedicated and make every effort for the benefit of customers. Consider customer satisfaction and work quality as your own honor;
Fifth: Professional, thoughtful, flexible and logical service provision process to optimize work performance and save customers' time;
Sixth: Reasonable and competitive service prices;
Seventh: Rich services in both fields of supply and service packages in the same field for customers to choose the appropriate service package, as well as comprehensive support for customers throughout the operation process. movement;
Eighth: Have the ability to Connect - Promote commercial relationships for customers if customers have needs,...
Finding a comprehensive, professional and reputable legal consulting organization is what every customer wants. Because no one wants to risk losing both money and time while the results are not as expected. However, finding such an organization is not easy because the number of service providers in the Vietnamese market today is very large with varying quality.
A suggestion for you: Although our TLK Law Firm does not dare to claim to be the company providing the best legal services on the market, we satisfy all of the above criteria and more. will definitely be a good choice for you.
=> See more: What is required to adjust the investment certificate to increase capital?
IV. SOME QUESTIONS RELATED TO INVESTORS INCREASING CHARTER CAPITAL EQUAL TO THE AMOUNT OF REGISTERED CAPITAL CONTRIBUTION TO IMPLEMENTING INVESTMENT PROJECTS
Question 1: Are there any industries that are banned from business investment?
Reply:
The answer is yes.
Pursuant to the Investment Law 2020, a number of industries are prohibited from business investment activities including:
(1) Trading in narcotics prescribed by the Investment Law 2020;
(2) Trading in chemicals and minerals prescribed by the Investment Law 2020;
(3) Trading in specimens of wild plants and animals originating from the wild according to the provisions of the Convention on International Trade in Endangered Species of Wild Plants and Animals; Specimens of endangered, precious, and rare species of forest plants, animals, and aquatic animals Group I originating from natural exploitation as prescribed by the Investment Law 2020;
(4) Prostitution business;
(5) Buying and selling humans, tissues, corpses, body parts, and human fetuses;
(6) Business activities related to human cloning;
(7) Trading in firecrackers;
(8) Debt collection service business.
Thus, when participating in investment activities, investors need to strictly comply and not invest in the above prohibited investment activities according to the provisions of law.
Question 2: What activities does the State not require investors to perform when investing in business?
Reply:
Pursuant to the Investment Law 2020, when carrying out business investment activities, investors do not have to comply with the following requirements:
(1) Priority is given to purchasing and using domestic goods and services or must purchase and use goods and services from domestic manufacturers or service providers;
(2) Export of goods or services reaches a certain rate; restrict the quantity, value, type of goods and services exported or produced and supplied domestically;
(3) Import goods in quantity and value corresponding to the quantity and value of exported goods or must balance foreign currency from export sources to meet import needs;
(4) Achieve localization rate for domestically produced goods;
(5) Achieving a certain level or value in research and development activities in the country;
(6) Providing goods and services at a specific location domestically or abroad;
(7) Set up the head office at the location required by the competent state agency.
Thus, the State's forms of ensuring business investment activities have created favorable conditions for investors when participating in investment projects according to the provisions of Vietnamese law.
Question 3: Can income from investment activities of foreign investors be transferred abroad?
Reply:
The answer is yes.
Pursuant to the Investment Law 2020, after fully fulfilling financial obligations to the State of Vietnam according to the provisions of law, foreign investors are allowed to transfer abroad the following assets:
(1) Investment capital, investment liquidation;
(2) Income from business investment activities;
(3) Money and other assets are legally owned by the investor.
Thus, the income from investment activities of foreign investors will be transferred abroad when the investor has fully fulfilled its financial obligations.
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Above is some general advice that we would like to offer to our customers. As a service provider, we always understand and are ready to accompany and solve the needs and difficulties that customers are facing. If you still have questions or need more in-depth advice, please contact the hotline: 0972118764 to receive direct advice from a lawyer (completely free consultation).
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