What do foreign direct investment enterprises in Vietnam include?

What do foreign direct investment enterprises in Vietnam include? (Internet image)

1. What do foreign direct investment enterprises in Vietnam include?

According to Clause 2, Article 3 of Circular 06/2019/TT-NHNN, foreign direct investment enterprises in Vietnam include:

(1) Any enterprise established in the form of investment of establishing a business organization whose members or shareholders are foreign investors and granted the investment registration certificate in accordance with law on investment.

(2) Any enterprises other than those prescribed in item (1) and at least 51% of charter capital of which is owned by foreign investors as follows:

-  Any enterprises (operating in conditional business lines or without conditions applicable to foreign investors) at least 51% of charter capital of which is held by foreign investors through contribution purchase of shares/stakes;

- Enterprises derived from division, acquisition, consolidation whose 51% of charter capital is owned by foreign investors after such events.

- New enterprises established in accordance with relevant laws;

(3) Project enterprises established by foreign investors to implement PPP projects in accordance with law on investment.

2. Revenues and expenditures on direct investment accounts in foreign currencies in Vietnam

Revenues and expenditures on direct investment accounts in foreign currencies according to Article 6 of Circular 06/2019/TT-NHNN are as follows:

* Revenues:

- Direct capital contribution from the transfer of direct contributed capital in foreign currencies of Vietnamese, foreign investors of a FDI enterprise, foreign investors involving in BCC or directly implementing PPP projects;

- Payment for the transfer of investment capital and investment projects in accordance with provisions in Article 10 of this Circular;

- Transferred foreign currency purchased from authorized credit institutions to transfer capitals, profits and legal earnings overseas in accordance with regulations of Circular 06/2019/TT-NHNN;

- Transfer from a foreign currency demand account opened at an authorized bank of the FDI enterprise, foreign investors involving in BCC or directly implementing PPP projects in order to transfer of capital, lawful revenues and profits to foreign countries;

- Revenue from foreign currency exchange for capital contribution in case of the currency used for contribution is different from the currency of the direct investment account;

- Capital surplus from additional shares in order to raise the charter capital of the FDI enterprise;

- Revenues in foreign currency from domestic sale of petroleum products (after fulfilling all financial obligations and subtracting expenses in Vietnam dong) in accordance with law on petroleum and Government Guarantee and Undertaking (if any);

- Transferred revenues relating to foreign loans in foreign currencies of FDI enterprises in according with law on overseas loan receipt and repayment of enterprises, except for cases prescribed in clause 3 Article 5 of Circular 06/2019/TT-NHNN;

- Other lawful revenues in Vietnamese dong relating to foreign direct investment in Vietnam.

* Expenditures:

- Amounts transferred to foreign currency accounts opened at authorized banks of FDI enterprises, foreign investors involving in BCC or directly implementing PPP projects, project managers of petroleum projects according to laws on petroleum for foreign direct investment in Vietnam;

- Sale of foreign currency to authorized credit institutions which is then transferred into Vietnamese dong demand accounts opened at authorized banks of FDI enterprises, foreign investors involving in BCC or directly implementing PPP projects;

-  Payments for transfer of investment capital, investment projects to overseas transferors or sale of foreign currencies for such transactions to transferors in Vietnam in Vietnamese dong in accordance with provisions prescribed in Article 10 of Circular 06/2019/TT-NHNN;

- Overseas transfer of profits and legal revenues in foreign currency from foreign investors’ foreign direct investment in Vietnam;

- Overseas transfer of  investment capital in foreign currencies by foreign investors in case of capital reduction, finish, termination of investment projects, BCC, PPP contracts in accordance with law on investment;

- Payment for currency exchange to transfer overseas the capital, profits and legal revenues to  in case of the currency used for transferring such items is different from the currency used to open the direct investment account;

- Transfers relating to foreign loans in foreign currencies of FDI enterprises in according with law on overseas loan receipt and repayment of enterprises, except for cases prescribed in clause 3 Article 5 of Circular 06/2019/TT-NHNN;

- Other lawful expenditures in Vietnamese dong relating to foreign direct investment in Vietnam.

Quoc Dat

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE