What is investment capital? Regulations on transfer of investment capital overseas in Vietnam

What is investment capital? Regulations on transfer of investment capital overseas in Vietnam (Internet image)

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

1. What is investment capital?

According to Clause 23, Article 3 of the Law on Investment 2020, 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.

2. Regulations on transfer of investment capital overseas in Vietnam

Regulations on transfer of investment capital overseas in Vietnam under Article 66 of the Law on Investment 2020 are as follows:

-  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:

++ Investors shall open an outward investment capital account at an authorized credit institution in Vietnam in accordance with regulations of law on foreign exchange management.

++ Transfer of money from and to Vietnam pertaining to outward investment activities must be made via the investment capital account specified in Clause 1 of Article 65 of the Law on Investment 2020 in accordance with regulations of law on foreign exchange management.

- 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.

- 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.

3. Conduct of investment activities by foreign-invested business organizations in Vietnam

Conduct of investment activities by foreign-invested business organizations according to Clauses 1, 2 and 3, Article 23 of the Law on Investment 2020 as follows:

- When establishing a business organization, when making investment by contributing capital, purchasing shares or purchasing stakes of a business organization or when making investment under a business cooperation contract in one of the following cases, the foreign investor must satisfy the conditions and follow investment procedures applied to foreign investors:

+ Over 50% of its charter capital or more is held by a foreign investor(s) or the majority of the general partners are foreigners if the business organization is a partnership;

+ Over 50% of its charter capital or more is held by a business organization(s) mentioned in Point a of this Clause;

+ Over 50% of its charter capital or more is held by a foreign investor(s) and a business organization(s) mentioned in Point a of this Clause.

- Business organizations other than those mentioned in Points a, b and c Clause 1 of Article 23 of the Law on Investment 2020 shall satisfy conditions and follow investment procedures applied to domestic investors when establishing a business organization, when making investment by contributing capital, purchasing shares or purchasing stakes of a business organization or when making investment under a business cooperation contract.

- If a foreign-invested business organization that is established in Vietnam has a new investment project, procedures for executing such investment project shall be followed without having to establish a new business organization.

- The Government shall elaborate procedures for establishing business organizations, and conduct of investment activities by foreign investors and foreign-invested business organizations.

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