Regulations on outward investment capital in petroleum activities in Vietnam from December 5, 2024

Regulations on outward investment capital in petroleum activities in Vietnam from December 5, 2024 (Image from the Internet)

On October 15, 2024, the Government of Vietnam issued Decree 132/2024/ND-CP stipulating outward investment in petroleum activities, including regulations on outward investment capital in petroleum activities.

Regulations on outward investment capital in petroleum activities in Vietnam from December 5, 2024

Article 4 of Decree 132/2024/ND-CP stipulates outward investment capital in petroleum activities in Vietnam starting from December 5, 2024, as follows:

(1) The sources of outward investment capital in petroleum activities include legal money and assets of the investor, including equity, loans in Vietnam transferred abroad, recovery costs, profits, and other distributable items from foreign petroleum projects that are retained for the purpose of investing abroad.

(2) Legal money and assets as stated in (1) include:

- Foreign currency in accounts at authorized credit institutions or purchased at authorized credit institutions as per legal regulations;

- Vietnamese Dong in accordance with Vietnam's foreign exchange management laws;

- Machinery, equipment, materials, raw materials, fuel, finished goods, semi-finished goods;

- The value of intellectual property rights, technology, trademarks, rights to assets;

- Shares, capital contributions, projects of the investor exchanged at economic organizations in Vietnam and economic organizations abroad as stipulated in (4);

- Other legal assets as per civil law regulations.

(3) outward investment capital is used for contributing capital, paying for share purchases, buying capital contributions, fulfilling guarantee obligations arising (if any), and other financial obligations of the investor according to the laws of the host country, petroleum contracts, licenses, and other related agreements to carry out petroleum activities, petroleum projects abroad from the project formation to conclusion and fulfilling all obligations as per regulations.

Transferred funds to foreign countries, once recovered and repatriated, are not counted into the funds transferred abroad.

(4) Vietnamese investors may use their shares, capital contributions, or investment projects in Vietnam to pay for or exchange for shares, capital contributions, or petroleum projects of economic organizations abroad.

In this case, Vietnamese investors must first complete procedures for the issuance of outward investment registration certificates, then the foreign investors must fulfill investment procedures in Vietnam as per legal regulations.

Form of outward investment in Vietnam under the Investment Law 2020

According to Clause 1, Article 52 of the Investment Law 2020, investors implement outward investment through the following forms:

- Establishing economic organizations in accordance with the laws of the host country;

- Investing in contractual forms abroad;

- Contributing capital, buying shares, purchasing capital contributions of economic organizations abroad to participate in managing those economic organizations;

- Buying, selling securities, other valuable papers or investing through overseas securities investment funds, other intermediary financial institutions;

- Other forms of investment according to the host country's laws.