What assets are allowed to be contributed in Vietnam? Is it necessary to contribute the full registered capital for a limited liability company in Vietnam?

What assets are allowed to be contributed in Vietnam?

Pursuant to Article 35 of the Law on Enterprises in 2020 stipulating contributed assets:

Contributed assets

1. Contributed assets include VND, convertible foreign currencies, gold, land use right (LUR), intellectual property rights, technologies, technical secrets, other assets that can be converted into VND.

2. Only the individual or organization that has the lawful right to ownership or right to use the asset mentioned in Clause 1 of this Article may contribute it as capital as prescribed by law.

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As regulations above, there are 08 types of assets that are allowed to be contributed in Vietnam:

- VND;

- Convertible foreign currencies;

- Gold;

- Land use right (LUR);

- Intellectual property rights;

- Technologies;

- Technical secrets;

- Other assets that can be converted into VND.

Note: Only the individual or organization that has the lawful right to ownership or right to use the asset mentioned above may contribute it as capital as prescribed by law.

What assets are allowed to be contributed in Vietnam? Is it necessary to contribute the full registered capital for a limited liability company in Vietnam? - image from internet

What are regulations on valuation of contributed assets in Vietnam?

Pursuant to Article 36 of the Law on Enterprises in 2020 stipulating valuation of contributed assets:

- Contributed assets that are not VND, convertible foreign currencies or gold shall be valued by members/partners/shareholders or a valuation organization and expressed as VND.

- Assets contributed upon establishment of an enterprise shall be valued by 01 of 02 following methods:

+ By members/partners/founding shareholders by consensus;

+ By a valuation organization: The value of contributed assets must be accepted by more than 50% of the members/partners/founding shareholders.

+ Note: In case a contributed asset is valued at a value higher than its actual value at contribution time (overvalued), the members/partners/founding shareholders shall jointly contribute an amount equal to the difference and are jointly responsible for the damage caused by the overvaluation.

- Assets contributed during the operation shall be valued by 01 of 02 following methods:

+ By the owner or the Board of Members/Partners (for limited liability companies and partnerships) or the Board of Directors (for joint stock companies) and the contributor;

+ By a valuation organization: The value shall be accepted by the contributor and the owner, the Board of Members/Partners/Directors.

+ Note: In case a contributed asset is overvalued, the contributor, the owner and members of the Board of Members/Partners/Director shall jointly contribute an amount equal to the difference and are jointly responsible for the damage caused by the overvaluation.

Is it necessary to contribute the full registered capital for a limited liability company in Vietnam?

Pursuant to Clauses 2, 3 and 4, Article 47 of the Law on Enterprises in 2020 stipulating capital contribution to establish the company and issuance of the certificate of capital contribution:

Capital contribution to establish the company and issuance of the certificate of capital contribution

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2. The members shall contribute sufficient and correct assets as promised when applying for enterprise registration within 90 days from the issuance date of the Certificate of Enterprise Registration, excluding the time needed to transport or import the contributed assets and for completing ownership transfer procedures. During this period, the members shall have rights and obligations that are proportional to their promised contribution. The members may only contribute assets that are different from the promised ones if the change is approved by more than 50% of the remaining members.

3. In case a member fails to contribute or fully contribute capital as promised by the expiration of the period mentioned in Clause 2 of this Article:

a) The member that has not contributed capital at all is obviously no longer a member of the company;

b) The member that has not fully contributed capital will have the rights that are proportional to the contributed capital;

c) The right to contribute the missing capital will be sold under a resolution or decision of the Board of Members.

4. In the cases mentioned in Clause 3 of this Article, the company shall register the change in charter capital and the members’ holdings within 30 days from the deadline for contributing capital specified in Clause 2 of this Article. The members who fail to contribute or fully contribute capital shall be responsible for the financial obligations incurred by the company during the period before the company registers the change in charter capital and the members’ holdings in proportion to their promised contributions.

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As regulations above, the members shall contribute sufficient and correct assets as promised when applying for enterprise registration within 90 days from the issuance date of the Certificate of Enterprise Registration.

- During this period, the members shall have rights and obligations that are proportional to their promised contribution.

- The members may only contribute assets that are different from the promised ones if the change is approved by more than 50% of the remaining members.

- In case a member fails to contribute or fully contribute capital as promised by the expiration of the prescribed period:

+ The member that has not contributed capital at all is obviously no longer a member of the company;

+ The member that has not fully contributed capital will have the rights that are proportional to the contributed capital;

+ The right to contribute the missing capital will be sold under a resolution or decision of the Board of Members.

Best regards!