What are the conditions for transfer of investment capital overseas in Vietnam?

What are the conditions for transfer of investment capital overseas in Vietnam? (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. What are the conditions for transfer of investment capital overseas in Vietnam?

Transfer of investment capital overseas is regulated in Article 66 of the Law on Investment 2020 as follows:

(1) An investor is allowed to transfer investment capital overseas in order to conduct investment activities if the following conditions are met:

- The outward investment registration certificate has been granted, except for the case prescribed in Clause 3 of Article 66 of the Law on Investment 2020;

- The investment activities have been approved or licensed by a competent authority of the host country. If the host country’s law does not cover investment licensing or approval, the investor must provide documents proving their right to carry out investment activities in that country;

- There is a capital account as prescribed in Article 65 of the Law on Investment 2020.

(2) The transfer of investment capital overseas must comply with regulations of law on foreign exchange management, export and technology transfer and relevant regulations of law.

(3) Investors are entitled to transfer foreign currencies, goods, machinery and equipment overseas to serve market survey, research and market exploration and to carry out investment preparatory activities as prescribed by the Government.

2. What are the regulations on overseas transfer of outward investment capital overseas in Vietnam?

According to Article 82 of Decree 31/2021/ND-CP, regulations on overseas transfer of outward investment capital overseas in Vietnam are as follows:

- Every investor is entitled to transfer outward investment capital to conduct investment activities in a foreign country as prescribed in Article 66 of the Law on Investment 2020.

- Every investor is entitled to transfer foreign currency, goods, machinery and equipment overseas before being issued with the outward investment registration certificate to cover the costs of activities that set up their investment project, including:

+ Market and investment opportunity research;

+ Field survey;

+ Document study;

+ Collection and purchase of documents and information relating to selection of the project;

+ Consolidation, assessment, appraisal of the project including selection of a consultant to carry out the assessment and appraisal;

+ Organization of scientific seminars and conferences;

+ Establishment and operation of overseas contact offices;

+ Participation in international bidding, making deposits or other financial guarantees, payment of costs and charges as requested by procuring entity, host country in connection with the conditions for participation in bidding or execution of the project;

+ Participation in sale, purchase or merger of companies, making deposits or other financial guarantees, payment of costs and charges as requested by sellers or as prescribed by laws of the host country;

+ Contract negotiation;

+ Purchase or lease of assets for supporting the setting up of the project overseas.

- The overseas transfer of foreign currency, goods, machinery and equipment prescribed in Clause 2 of Article 82 of Decree 31/2021/ND-CP shall comply with regulations of law on foreign exchange, exportation, customs and technology.

- The limit of foreign currency transfer prescribed in Clause 2 of Article 82 of Decree 31/2021/ND-CP shall not exceed 5% of the total outward investment capital and not exceed USD 300,000, and shall be included in the total outward investment capital, unless otherwise prescribed by the Government.

- The State Bank of Vietnam shall elaborate on management of foreign exchange for the overseas transfer of foreign currency for carrying out the activities prescribed in this Article.

- The transfer of capital in the form of machinery, equipment and goods from and to Vietnam for the execution of outward investment projects must undergo customs procedures according to regulations of law on customs. The Ministry of Finance shall provide detailed instructions on overseas transfer of machinery, equipment and goods for carrying out the activities as prescribed.

Nguyen Ngoc Que Anh

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