Can profits from foreign investment projects be used to increase investment capital in Vietnam?

Can profits from foreign investment projects be used to increase investment capital in Vietnam?

Pursuant to Article 67 of the Investment Law 2020, there are regulations on use of profit overseas as follows:

1. The investor is entitled to retain profit derived from outward investment for reinvestment in the following cases:

a) Continuing to contribute outward investment capital if capital has not yet been fully contributed as registered;

b) Increasing outward investment capital;

c) Executing a new investment project overseas.

2. Investors shall follow the procedures for adjusting the outward investment registration certificate as prescribed in Article 63 of this Law in the cases specified in Points a and b Clause 1 of this Article; and follow the procedures for issuance of the outward investment registration certificate as prescribed in Article 61 of this Law in the case specified in Point c Clause 1 of this Article.

Thus, according to the above regulations in Vietnam, your company has right to use profits from investment projects abroad to increase investment capital for this project.

How long does it take to repatriate profits from investment projects in Vietnam?

Pursuant to Article 68 of the Investment Law 2020, there are regulations on repatriation of profit as follows:

1. Within 06 months from the date on which the tax declaration or an equivalent document is available as prescribed by the host country’s law, the investor shall repatriate the entire profit and other incomes derived from outward investment unless the profit is retained as prescribed in Article 67 of this Law.

2. If the profit and other incomes are not repatriated within the time limit prescribed in Clause 1 of this Article, the investor shall send a written notification to the Ministry of Planning and Investment and the State Bank of Vietnam. The time limit for repatriation of profit may be extended by no more than 12 months from the expiry of the time limit specified in Clause 1 of this Article.

3. If the investor, within the time limit specified in Clause 1 of this Article, has failed to repatriate profit or send the notification or if the investor, within the extended time limit specified in Clause 2 of this Article, has failed to repatriate profit, such investor shall incur penalties in accordance with regulations of law.

According to this Article in Vietnam, your company must repatriate profits within 06 months from the date of the tax finalization report or document with equivalent legal value according to the provisions of the law of the investment receiving country.

Can profits from foreign investment projects be used to increase investment capital in Vietnam? (Image from the Internet)

In Vietnam, what are conditions for transfer of investment capital overseas?

Pursuant to Article 66 of the Investment Law 2020, there are provisions as follows:

1. An investor is allowed to transfer investment capital overseas in order to conduct investment activities if the following conditions are met:

a) The outward investment registration certificate has been granted, except for the case prescribed in Clause 3 of this Article;

b) The investment activities have been approved or licensed by a competent authority of the host country. If the host country’s law does not cover investment licensing or approval, the investor must provide documents proving their right to carry out investment activities in that country;

c) There is a capital account as prescribed in Article 65 of this Law.

2. The transfer of investment capital overseas must comply with regulations of law on foreign exchange management, export and technology transfer and relevant regulations of law.

3. Investors are entitled to transfer foreign currencies, goods, machinery and equipment overseas to serve market survey, research and market exploration and to carry out investment preparatory activities as prescribed by the Government.

Thus, the transfer of investment capital abroad will be carried out when all the conditions as prescribed above are met in Vietnam.

Best regards!