WHEN WITHDRAWING CAPITAL, IN WHAT WAYS TO FOREIGN INVESTORS RECEIVE THEIR CONTRIBUTED CAPITAL BACK?
QUESTION
Dear TLK Law Firm, we hope that you will answer the following question: My company is a limited liability company that was established and has been in operation for several years. My company has a foreign investor contributing capital, currently the foreign investor wants to withdraw the contributed capital. Let me ask, in what form can foreign investors withdraw capital and receive back their contributed capital? 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
In the trend of global economic integration, Vietnam is showing itself to be a potential market for foreign investors. Currently, more and more foreign-invested enterprises are being established in Vietnam. However, after the capital contribution process, due to the need to receive money back or want to redirect investment, many foreign investors have the need to withdraw contributed capital. Withdrawing investment capital is not easy if you do not fully understand the law, leading to incorrect implementation.
Next, join us to learn about the conditions for investors to withdraw capital and the form of receiving back the contributed capital of foreigners through the article When withdrawing capital, in what ways do foreign investors receive their contributed capital back?
Photo 1. When withdrawing capital, in what ways do foreign investors receive their contributed capital back?_Hotline: 0972118764
I. SOME IMPORTANT LEGAL ISSUES RELATED TO WHEN WITHDRAWING CAPITAL, IN WHAT FORMS DO FOREIGN INVESTORS RECEIVE THEIR CONTRIBUTED CAPITAL?
1. What is investment capital and foreign investors?
Investment 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.
Investors are generally individuals, organizations, using money or other legal assets to carry out business investment activities, including domestic investors, foreign investors and economic organizations with investment capital. foreign investment. In there:
(1) Foreign investors are individuals with foreign nationality or organizations established under foreign laws conducting business investment activities in Vietnam;
(2) Domestic investors are individuals with Vietnamese nationality or economic organizations that do not have foreign investors as members or shareholders.
In short, foreign investors are investors without Vietnamese nationality, including individuals and organizations, investing in business activities in Vietnam.
=> See more: Can foreign loans be converted into investment capital?
2. Cases of capital withdrawal by foreign investors?
Capital withdrawal can be understood as individuals and organizations wanting to get back the money they previously spent.
2.1. For limited liability companies with two or more members
According to regulations, members of the Board of Members are not allowed to withdraw contributed capital from the company in any form, except for the following cases:
(1) A member requests the company to buy back his/her capital contribution if that member has voted against the resolutions and decisions of the Board of Members on the following issues:
- Amending and supplementing contents in the company's Charter related to the rights and obligations of members and the Board of Members;
- Reorganize the company;
- Other cases as prescribed in the company's Charter.
(2) Transfer part or all of your capital contribution to another person in the following cases:
- Offer to sell that capital contribution to the remaining members in proportion to their capital contribution in the company with the same offering conditions;
- Transfer with the same offering conditions for the remaining members to non-members if the remaining members of the company do not buy or do not buy all within 30 days from the date of offering.
2.2. Joint stock company
According to regulations, shareholders of a joint stock company are not allowed to withdraw capital contributed by common shares from the company in any form, except in cases where the shares are bought back by the company or another person. In case a shareholder withdraws part or all of the contributed share capital contrary to the provisions of this Clause, that shareholder and people with related interests in the company must be jointly responsible for the debts and other assets obligations of the company to the extent of the value of shares withdrawn and damages incurred.
In short, foreign investors can withdraw their contributed capital in the following forms as analyzed above.
II. PROCESS FOR IMPLEMENTING PROCEDURES FOR WITHDRAWAL OF CAPITAL BY FOREIGN INVESTORS IN LIMITED LIABILITY COMPANY
1. Withdrawal of foreign investors' capital in limited liability companies
Step 1: The request to buy back the capital contribution must be in writing and sent to the company within 15 days from the date of passing the resolution or decision that the member voted against. In case of transfer, the written agreement with the transferee;
Step 2: Within 15 days from the date of receiving the member's request, the company must buy back that member's capital contribution at the market price or the price determined according to the principles specified in the company's Charter, unless the two parties can agree on the price. Payment will only be made if, after fully paying for the repurchased capital contribution, the company still pays all debts and other property obligations;
- In case the company cannot pay the capital contribution required to be repurchased according to regulations, that member has the right to freely transfer his capital contribution to another member or person who is not a member of the company.
2. Document components and procedures for handling capital withdrawal procedures of investors at limited liability companies
A. Document components:
In case of requesting the company to buy back the capital contribution:
1. Written request to buy back capital contribution;
2. Attached supporting documents.
In case of transfer of capital contribution:
1. Transfer contract;
2. Documents proving ownership of capital contribution.
Note: Common documents for both cases:
(1) Power of attorney for the person submitting the application (in case of authorizing someone else to do so);
(2) Certified copy of personal legal documents (ID card, citizen identification card, valid passport) of the person performing the procedure;
(3) Other documents required by competent state agencies (if any).
B. Resolution agency
Company.
C. How to do it
- Submit your application directly to the company; or,
- Submit an application via postal service to the company address.
D. Implementation results
Decision to withdraw capital.
Photo 2. When withdrawing capital, in what ways do foreign investors receive their contributed capital back?_Hotline: 0972118764
III. SUMMARY OF THE ANSWER SECTION: WHEN WITHDRAWING CAPITAL, IN WHAT FORM CAN FOREIGN INVESTORS RECEIVE THEIR CONTRIBUTED CAPITAL?
Dear Customers, from the above synthesis and analysis, TLK Law Firm would like to give the following answer:
According to the analysis above, foreign investors can withdraw in one of two ways:
(1) Transfer shares to others;
(2) Require the company to buy back;
Depending on the type of enterprise the investor is investing in, he or she must comply with regulations to receive back his/her capital contribution in an agreed upon form.
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 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 do documents for converting loan into investment capital include?
V. SOME QUESTIONS RELATED TO INVESTMENT REGISTRATION CERTIFICATE
Question 1: In what ways can foreign investors invest in Vietnam?
Reply:
Similar to Vietnamese investors, foreign investors can invest in Vietnam in the following forms:
(1) Investment in establishing economic organizations;
(2) Investing in capital contribution, purchasing shares, purchasing capital contributions;
(3) Implement investment projects;
(4) Investment in the form of BCC contract;
(5) New forms of investment and types of economic organizations according to Government regulations.
In short, foreign investors can invest in Vietnam in many forms, however, each form will have separate limits.
Question 2: Which businesses are prohibited from investing?
Reply:
The following business investment activities are prohibited:
(1) Trading in narcotics;
(2) Trading in chemicals and minerals according to regulations;
(3) Trading in specimens of wild plants and animals originating from natural sources; Specimens of endangered, precious, and rare forest plants, animals, and aquatic species of Group I originating from natural exploitation;
(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.
In summary, the above are the industries and business lines in which Vietnamese law prohibits investment, except in the case of production and use of products specified in items (1), (2), (3) in this section. Analysis, testing, scientific research, medicine, pharmaceutical production, criminal investigation, national defense and security protection are carried out in accordance with the Government's regulations.
Question 3: Market access conditions for foreign investors
Reply:
Market access conditions for foreign investors specified in the List of industries and occupations with restricted market access for foreign investors include:
(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 Nam is a member.
In short, when belonging to the list of industries and occupations with market access for foreign investors, when meeting the above conditions, foreign investors can access the Vietnamese market and make investments.
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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