From January 01, 2021, how is the valuation of capital contributions regulated?

Valuation of Contributed Assets - Illustrative image.

Article 36 of the Enterprise Law 2020 stipulates the valuation of assets contributed as follows:

- For assets contributed that are not Vietnamese Dong, freely convertible foreign currency, or gold, they must be valued by the founding members or shareholders or by a valuation organization and converted into Vietnamese Dong.- For assets contributed when establishing an enterprise, these must be valued by the founding members or shareholders based on the principle of consensus or by a valuation organization. If valued by a valuation organization, the value of contributed assets must be approved by more than 50% of the founding members or shareholders.- In cases where the contributed assets are valued higher than their actual value at the time of contribution, the founding members or shareholders shall jointly contribute the difference between the appraised value and the actual value of the assets at the time the valuation is completed; they shall also be jointly liable for any damage caused by intentionally overvaluing the contributed assets.

Notably, Clause 3 of Article 36 of the Enterprise Law 2020 provides that for assets contributed during the operation, valuation is agreed upon by the capital contributor and the owner, the Members’ Council for limited liability companies and partnerships, or the Board of Directors for joint-stock companies, or is conducted by a valuation organization. If valued by a valuation organization, the value of contributed assets must be approved by the capital contributor and the owner, the Members’ Council, or the Board of Directors.

In cases where the contributed assets are valued higher than their actual value at the time of contribution, the capital contributor, owner, members of the Members’ Council for limited liability companies and partnerships, or members of the Board of Directors for joint-stock companies shall jointly contribute the difference between the appraised value and the actual value of the assets at the time the valuation is completed; they shall also be jointly liable for any damage caused by intentionally overvaluing the contributed assets.

The full text of the document can be viewed at Enterprise Law 2020, effective from January 1, 2021.

Le Vy

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