WHAT PROCEDURES ARE REQUIRED TO TRANSFER THE WHOLE OR PART OF THE CAPITAL CONTRIBUTION OF A VIETNAMESE COMPANY TO A FOREIGN INVESTOR?
QUESTION
Dear TLK Law Firm, I currently have a question and hope to hear from you as follows: Currently, I have 35% capital contribution in a company specializing in the production of confectionery with headquarters located in Hanoi city. I need to transfer the entire capital contribution of that company to a friend with Thai nationality who wants to invest in Vietnam. However, I am not clear about the regulations on procedures for transferring whole or part of the capital contribution of a Vietnamese company to a foreign investor. 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. Enterprise Law No. 59/2020/QH14 passed by the National Assembly on June 17, 2020;
2. Investment Law No. 61/2020/QH14 passed by the National Assembly on June 17, 2020;
3. Decree No. 122/2021/ND-CP issued by the Government on December 28, 2021 regulating penalties for administrative violations in the field of planning and investment;
4. Official Dispatch No. 8909/BKHDT-CP issued by the Ministry of Planning and Investment on December 31, 2020 regulating the implementation of the Investment Law;
5. Other legal documents providing relevant guidance.
CONSULTATION CONTENT
With the development and improvement of Vietnamese law, foreign investors have expanded their scope and freedom in investment activities to create a more diverse and complete economic environment. However, procedures related to transferring whole or part of the capital contribution of a Vietnamese company to foreign investors is a problem that many businesses encounter difficulties. And this is the question that many customers sent to TLK Law Firm.
Therefore, through this article, we will answer your questions about "Procedures related to the transfer of the whole or part of the capital contribution of a Vietnamese company to a foreign investor."
Photo 1. What procedures are required to transfer of whole or part of the capital contribution of a Vietnamese company to a foreign investor._Hotline: 0972118764
I. SOME IMPORTANT LEGAL ISSUES RELATED TO PROCEDURES FOR TRANSFER OF WHOLE OR PART OF THE CAPITAL CONTRIBUTION OF VIETNAMESE COMPANIES TO FOREIGN INVESTORS
1. What is capital? What is capital transfer?
Pursuant to the Investment Law 2020, capital is money and other assets according to the provisions of civil law and international treaties to which the Socialist Republic of Vietnam is a member to carry out business investment activities.Transfer of contributed capital is when a company member transfers part or all of the rights and obligations corresponding to his or her capital contribution in the company to another member or other individual or organization that is not a member of the company.
2. Forms of transferring all or part of the capital contribution of a Vietnamese company to a foreign investor
Pursuant to the Investment Law 2020, capital transfer to foreign investors can be done in the following forms:
(1) Purchase shares of a joint stock company from the company or shareholders;
(2) Buy the capital contribution of a member of a limited liability company to become a member of a limited liability company;
(3) Buy the capital contribution of a capital contributing member in a partnership to become a capital contributing member of a partnership;
(4) Buying capital contributions of members of other economic organizations that do not fall into the above cases.
Thus, using the above methods, it is possible to transfer all or part of the capital contribution of a Vietnamese company to a foreign investor.
Photo 2. What procedures are required to transfer of whole or part of the capital contribution of a Vietnamese company to a foreign investor?_Hotline: 0972118764
II. PROCEDURES FOR TRANSFER OF WHOLE OR PART OF THE CONTRIBUTED CAPITAL OF A VIETNAMESE COMPANY TO FOREIGN INVESTORS
1. Steps to carry out procedures for transferring all or part of the capital contribution of a Vietnamese company to a foreign investor
According to Official Dispatch No. 8909/BKHD-PC, the process of transferring all or part of the capital contribution of a Vietnamese company to a foreign investor is carried out as follows:
Step 1: Organizations and individuals apply for approval to transfer capital to foreign investors;
Step 2: The agency checks the dossier and requests to complete the dossier (if any);
Step 3: If the application is valid, the state management agency will carry out procedures for parties to receive capital contributions, transfer capital, and change members and shareholders corresponding to each type of economic organization;
Step 4: Organizations and individuals receive the results.
2. Profile components
A company with a foreign investor purchasing capital contribution shall prepare 01 set of documents including the following documents:
1. Document to register to buy shares or capital contribution;
2. Copies of legal documents of individuals, organizations purchasing shares, purchasing capital contributions and economic organizations with foreign investors contributing capital, purchasing shares, purchasing capital contributions;
3. Written agreement on the purchase of shares and capital contributions between the foreign investor and the economic organization receiving capital contributions, shares and capital contributions;
4. Declaration document (attached with a copy) Certificate of land use rights of the economic organization receiving capital contributions, shares, capital contributions from foreign investors
5. Power of attorney for the person applying (in case of authorizing someone else to do so);
6. Certified copy of personal legal documents (ID card, citizen identification card, valid passport) of the person performing the procedure;
7. Other documents required by competent state agencies (if any).
3. Resolution agency
Investment Registration Office - Department of Planning and Investment where the enterprise is headquartered.
4. Procedures
Submit directly or through the postal system to the Investment Registration Office - Department of Planning and Investment where the enterprise is headquartered.
5. Implementation results
Decision recognizing the transfer of capital contribution of Vietnamese companies to foreign investors.
III. SUMMARY OF THE ANSWER SECTION: WHAT PROCEDURES ARE REQUIRED TO TRANSFER FULL OR PART OF THE CAPITAL OF A VIETNAMESE COMPANY TO A FOREIGN INVESTOR?
Dear Customers, from the above synthesis and analysis, TLK Law Firm would like to give the following answer:
When transferring all or part of the capital contribution of a Vietnamese company to a foreign investor, the following procedures must be carried out:
1. Transfer the capital contribution to the Investment Registration Office - Department of Planning and Investment where the enterprise is headquartered;
2. Parties receiving capital contributions, transferring capital, changing members and shareholders correspond to each type of economic organization.
=> See more: Where to submit an application to establish a foreign-invested enterprise?
IV. 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 when 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 best legal service provider on the market, we satisfy all of the above criteria and more will definitely be a good choice for you.
V. SOME QUESTIONS RELATED TO PROCEDURES FOR TRANSFER OF WHOLE OR PARTIAL CAPITAL OF A VIETNAMESE COMPANY TO FOREIGN INVESTORS
Question 1: How can foreign investors increase project investment capital?
Reply:
Pursuant to the Investment Law 2020, foreign investors can increase project investment capital in the following ways:
(1) Contribute additional capital, purchase capital contributions from economic organizations (in case economic organizations are established to implement projects in the form of LLCs or Partnerships);
(2) Buying shares of an economic organization (in case the economic organization is established to implement a project in the form of a Joint Stock Company).
Thus, foreign investors can increase their project investment capital by the above methods according to the provisions of law.
Question 2: How are the forms of incentives when participating in investment regulated?
Reply:
Pursuant to the Investment Law 2020, when investing, investors will enjoy the following incentives:
(1) Corporate income tax incentives are prescribed as follows:
- Apply a lower corporate income tax rate than the normal tax rate for a term or the entire duration of the investment project;
- Tax exemption, tax reduction and other incentives according to the provisions of law on corporate income tax.
(2) Exemption from import tax for goods imported to create fixed assets; raw materials, supplies, and components imported for production according to the provisions of law on export tax and import tax;
(3) Exemption or reduction of land use fees, land rent, land use tax;
(4) Accelerated depreciation, increasing deductible expenses when calculating taxable income.
Thus, with incentives when investing, it makes it easier and more convenient for investors to invest in fields in Vietnam.
Question 3: Penalties for administrative violations when not following procedures to adjust investment capital increases with foreign investment projects in Vietnam.
Reply:
Pursuant to Decree No. 122/2021/ND-CP regulating penalties for administrative violations in the field of planning and investment, investors will be fined from 70,000,000 VND to 100,000,000 VND in this case. In case of not carrying out procedures for adjusting investment projects when making changes to the information on the Investment Registration Certificate.
=> See more: Can a foreign company establish a subsidiary in Vietnam? What are conditions?
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).
Thank you very much!
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