Can investors contribute capital in foreign currency in Vietnam?

Can investors contribute capital in foreign currency in Vietnam? (Source: Internet)

1. What is a "foreign currency"?

According to Clause 1, Article 4 of the Ordinance on Foreign Exchange Control 2005, foreign currency is understood as follows:

-Foreign currency is currency of other nations or the common European currency and other common currencies used in international and regional payments;

- Foreign currency payment instruments, cheques, credit cards, bills of exchange, promissory notes and other payment instruments;

- All types of valuable papers denominated in foreign currencies including Government bonds, corporate bonds, term bonds, shares and other valuable papers;

- Gold belonging to the foreign exchange reserves of the State, gold in overseas' accounts of residents, and gold in the form of bullion, bars, granules and plate which is brought into or taken out of the territory of Vietnam;

- The currency of the Socialist Republic of Vietnam in cases where it is remitted into or out of the territory of Vietnam or used as an instrument for international payments.

2. Can investors contribute capital in foreign currency?

- “Investment capital” means money and other assets prescribed by the civil law and international treaties to which the Socialist Republic of Vietnam is a signatory for the purpose of carrying out business investment activities. (According to Clause 23, Article 3 of the Law on Investment 2020)

According to Clause 1, Article 34 of the Law on Enterprise 2020, 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.

-At the same time, according to Clause 1, Article 4 of Circular 06/2019/TT-NHNN stipulating as follows:

Foreign and Vietnamese investors are allowed to contribute capital in foreign currencies and Vietnamese dong according to registered amount in the following documents:

- Investment registration certificate;

- License of establishment and operation in accordance with specialized law (for foreign direct investment enterprises established and operating under specialized laws);

- Notice of the foreign investor’s eligibility to contribute capital or purchase shares/stakes;

- PPP contracts with competent authorities;

- Other documents which can prove the compliance with law of capital contribution of foreign investors;

Thus, for Vietnamese investors and foreign investors, they are allowed to make capital contributions in foreign currency or Vietnam Dong according to the amount of capital contributed in registered papers in accordance with the law in Vietnam

Quoc Dat

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