Application and procedures for making investment by contributing capital, purchasing shares or purchasing stakes in Vietnam

Regulations on the forms of capital contribution or purchase of shares or stakes in Vietnam

According to the provisions of the Law on Investment 2020, capital contribution or purchase of shares or stakes is one of the forms of investment in Vietnam.

(1) A foreign investor may contribute capital to a business organization in the following forms:

- Purchase of shares of joint-stock companies through the initial public or additional issuance;

- Contribution of capital to limited liability companies and partnerships;

- Contribution of capital to other business organizations not mentioned above.

(2) A foreign investor may purchase shares or stakes of a business organization in the following forms:

- Purchase of shares in a joint-stock company from such company or its shareholders;

- Purchase of stakes of members of a limited liability company to become a member of such limited liability company;

- Purchase of stakes of a capital contributing member of a partnership to become a capital contributing member of such partnership;

- Purchase of stakes of members of other economic entities not mentioned in Points a, b and c of this Clause.

Application and procedures for making investment by contributing capital, purchasing shares or purchasing stakes in Vietnam (Internet image) 

Application and procedures for making investment by contributing capital, purchasing shares or purchasing stakes in Vietnam

Application and procedures for making investment by contributing capital, purchasing shares or purchasing stakes in Vietnamshall comply with the guidance in Article 66 of Decree 31/2021/ND-CP, specifically as follows:

- Except for the case specified in Clause 2 Article 26 of the Law on Investment 2020, a business organization in which foreign investors invest in the form of capital contribution, purchase of shares or stakes shall follow procedures for registration of a change of members or shareholders in accordance with regulations of law on enterprises and other law corresponding to each type of business organization.

- The business organization in which foreign investors invest in the form of capital contribution, purchase of shares or stakes in the case specified in Clause 2 Article 26 of the Law on Investment 2020 shall submit 01 set of application for registration of capital contribution or purchase of shares or stakes to investment registration authority of the administrative division where the business organization’s headquarters is located. The application includes:

+ A registration form for capital contribution/purchase of shares/stakes, which contains: enterprise registration information of the business organization to which the foreign investors expects to contribute capital or whose shares/stakes are expected to be purchased by the foreign investors; business lines; list of owners, members and founding shareholders, list of owners, members and founding shareholders that are foreign investors (if any); holding of charter capital by foreign investors before and after the capital contribution/purchase of shares/stakes in the business organization; expected transaction value of the contract for capital contribution/purchase of shares/stakes; information about the business organization’s investment project (if any);

+ Copies of legal documents of the individual or organization that contributes capital or purchases shares/stakes and of the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors;

+ A principal agreement on capital contribution or purchase of shares/stakes between the foreign investors and the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors or between the foreign investors and the shareholders or members of such business organization.

+ A copy of the certificate of land use rights of the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors (in the case specified in Point b Clause 4 Article 65 of Decree 31/2021/ND-CP).

- For the cases specified in Points a and b Clause 2 Article 26 of the Law on Investment 2020, within 15 days from the receipt of the valid application specified in Clause 2 of Article 66 of Article 66 of Decree 31/2021/ND-CP, the investment registration authority shall consider  the satisfaction of the conditions for capital contribution or purchase of shares or stakes set out in Clause 2 Article 24 of the Law on Investment 2020 and Clause 4 Article 65 of Decree 31/2021/ND-CP, and notify the investors, except for the case in Clause 4 of Article 66 of Decree 31/2021/ND-CP. The notification shall be sent to foreign investors and business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors.

- If the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors has the certificate of rights to use land on an island or in a border or coastal commune; in a coastal commune; in another area that affects national defense and security, the investment registration authority shall follow the procedures below:

+ Within 03 working days from the receipt of the valid application specified in Clause 2 of Article 66 of Decree 31/2021/ND-CP, the investment registration authority shall seek opinions of the Ministry of National Defense and Ministry of Public Security about the satisfaction of the conditions specified in Point b Clause 4 Article 65 of Decree 31/2021/ND-CP.

+ Within 07 working days from the receipt of the investment registration authority’s request, the Ministry of National Defense and Ministry of Public Security shall give their opinions about the satisfaction of the conditions for national defense and security assurance by the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors; in case of failure to give any opinion by the aforementioned deadline, it is considered that it concurs with the satisfaction of the conditions for national defense and security assurance by the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors;

+ Within 15 days from the receipt of the valid application, the investment registration authority shall consider the satisfaction of the conditions for capital contribution or purchase of shares or stakes specified in Clause 2 Article 24 of the Law on Investment 2020 and Clause 4 Article 65 of Decree 31/2021/ND-CP, and notify investors according to the opinions given by the Ministry of National Defense and Ministry of Public Security. The notification shall be sent to foreign investors and business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors.

- After foreign investors are granted the approval for capital contribution or purchase of shares or stakes as prescribed in Clauses 3 and 4 of Article 66 of Decree 31/2021/ND-CP, the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors shall follow procedures for change of members or shareholders at the business registration authority in accordance with regulations of law on enterprises and other law corresponding to each type of business organization. Rights and obligations of foreign investors that act as members or shareholders of the business organization shall be established after completing the procedures for change of members or shareholders.

Mai Thanh Loi

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