Transfer of invested capital out of the enterprise according to Vietnam’s current regulations

One of the notable contents of this Law is the regulation on transfer of invested capital out of the enterprise.

Specifically, according to Article 31 of the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities 2014 of Vietnam, transfer of invested capital out of the enterprise must ensure the following principles:

- Comply with legal regulations on enterprises, securities and other relevant laws;

- Comprehensively mirror the actual value of the enterprise, inclusive of the value of land title in accordance with the law on land;

- Stick to the principles of market, disclosure and transparency.

Modalities of invested capital transfer are as follows:

- Transfer of the enterprise’s invested capital in limited liability companies shall conform to legal regulations on enterprises;

- Transfer of the enterprise’s invested capital in joint-stock companies whose stocks are listed on the stock exchange market shall conform to legal regulations on securities;

- Transfer of the enterprise’s invested capital in joint-stock companies whose stocks have yet to be listed on the stock exchange market shall be carried out through the open auction. In case the open auction is not successful, the competitive bidding shall be in place. In case the competitive bidding is not successful, the method agreed by interested parties shall be in place.

The Board of Members or the President of the enterprise shall be vested with the decision-making authority over transfer of the enterprise’s invested capital in joint-stock companies and limited liability companies after obtaining the consent to investment intention from the owner's representative agency.

In case the transferred value stays lower than the book value after making up or deducting provisions for any loss on invested capital, the Board of Members or the President of a company shall submit a report to the owner's representative agency for their consideration and decision.

View other relevant contents at the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities 2014 of Vietnam, effective from July 01, 2015.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE