Vietnam’s regulations on increase and decrease in the paid-in capital of the venture capital fund

Regulations on increase and decrease in the paid-in capital of the venture capital fund are featured contents of Decree No. 38/2018/NĐ-CP of Vietnam’s Government. To be specific:

Any increase or decrease in the paid-in capital of the venture capital fund must comply with the following provisions:

- The fund’s Charter has regulations on the increase and decrease in its paid-in capital;

- The increase or decrease in the fund’s paid-in capital has been approved by the General meeting of investors.

The venture capital fund’s paid-in capital may be raised from existing investors or new investors. In such cases, the number of investors contributing money to the fund must be ensured as regulated, which is 30 investors.

In case of decrease in the fund’s paid-in capital, assets distributed to investors may be cash or other assets as prescribed by the General meeting of investors. The fund management company shall fairly distribute assets to investors according to the capital contribution percentage of each investor. The conveyance or registration for ownership of assets for investors as well as tax liabilities to the Government shall be carried out in accordance with relevant laws.

Within 07 days after the completion of increase or decrease in the fund’s paid-in capital, the fund management company must report the company registration business on such increase or decrease in the fund’s paid-in capital as follows:

- The notice of the increase or decrease in the paid-in capital of the venture capital fund;

- The minutes and resolution of the General meeting of investors on the capital increase or decrease and relevant documents;

- The amended Charter;

- The written agreement on capital contribution and the list of investors contributing capital, contributed capital amounts and contribution percentage of each investor before and after the increase or decrease in the fund's paid-in capital;

- The certificate of additional paid-in capital and the list of assets contributed to the fund made by the fund management company. In case of capital decrease: The Certificate of distribution of assets to each investor which is made by the fund management company and specifies the list of assets distributed to investors.

The procedures for notice of increase or decrease in the fund's paid-in capital and responsibilities of the fund management company shall be the same as those for notice of establishment of venture capital fund specified in Clauses 2, 3, 4, 5 and 6 Article 11 of Decree No. 38/2018/NĐ-CP.

Decree No. 38/2018/NĐ-CP of Vietnam’s Government takes effect from March 11, 2018.

-Thao Uyen-

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