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

Article 4 of Decree 132/2024/ND-CP defines outward investment capital in petroleum activities in Vietnam as follows:

- Sources of outward investment capital in petroleum activities include legal money and assets of the investor, including equity capital, loans in Vietnam transferred abroad, recovery costs, profits, and other allocations from overseas petroleum projects retained for reinvestment abroad.

- Money and other legal assets as stipulated above include:

+ Foreign currency in accounts at authorized credit institutions or purchased from authorized credit institutions in accordance with the law;

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

+ Machinery, equipment, materials, raw materials, fuels, finished goods, semi-finished goods;

+ The value of intellectual property rights, technology, trademarks, and asset rights;

+ Shares, capital contributions, and projects of investors exchanged at Vietnamese economic organizations and foreign economic organizations as stipulated in Clause 4 Article 4 of Decree 132/2024/ND-CP;

+ Other legal assets as stipulated by civil law.

- outward investment capital is used for capital contribution, payment for share purchases, capital contribution purchases, obligations arising from guarantees (if any), and other financial obligations of the investor according to the laws of the host country, petroleum contract, license, and relevant agreements to carry out petroleum activities, and petroleum projects abroad from project initiation to completion and fulfillment of all obligations. Funds transferred abroad, once recovered and repatriated, shall not be counted as funds transferred abroad.

- Vietnamese investors are allowed to use their shares, capital contributions, or investment projects in Vietnam to pay or exchange for share purchases, capital contributions, or petroleum projects in foreign economic organizations. In such cases, Vietnamese investors shall obtain an overseas investment registration certificate prior, followed by foreign investors completing investment procedures in Vietnam in accordance with the law in Vietnam.

More details can be found in Decree 132/2024/ND-CP which takes effect in Vietnam from December 5, 2024, replacing Decree 124/2017/ND-CP on outward investment in petroleum activities.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE