Capital contribution, share purchase in Vietnamese enterprises

Update day: October 5 , 2023

Capital contribution, share purchase in Vietnamese enterprises

Capital contribution and share purchase in enterprises established in Vietnam are considered as one of the popular forms of investment in Vietnam and are understood as indirect investments. Conditions on Vietnam’s commitment regarding business sectors at WTO schedule and business license are applied for indirect investment the same as direct investment. However, capital contribution or share purchase is currently chosen by many investors because of its simple legal procedures (not to set up an investment project as a direct investment) as well as inheriting strengths in capacity, experience, customers, brand, etc. from the enterprises in which investors contribute capital or purchase shares.

Procedures for Capital contribution, share purchase in Vietnamese enterprises

Process Detailled description
Step 1 Prepare documents

The investor should prepare a list of documents as listed above, including documents that shall be translated and consular legalized.

Consider the operation locations, the lessor’s right to lease, and the right to do business at the proposed location.

In addition, investors also need to determine Vietnam’s tax incentives for foreign investors when doing business in Vietnam to select operating locations to enjoy tax incentives.

Step 2 Application for Investment Registration Certificate (Investment Project Formulation)

The dossier will be submitted at the investment registration office of the Department of Planning and Investment or the Management Board of Industrial Parks, depending on the location of operation of the enterprise. Normally, the settlement time will be about 15 working days, but if the expected sector is in case Vietnam has not committed, the investment registration agency can collect opinions of specialized management agencies, and this time will last longer from 2-3 months.

Step 3 Submission of Enterprise Establishment Registration dossier

After completing the investment registration and having been granted the Investment Registration Certificate, the Investor submits the dossier for Enterprise Establishment Registration.

The settlement time will be 03 working days and the result received by the investor will be the Enterprise Registration Certificate. This document recognizes the legal entity status of the investment project management organization according to the granted Investment Registration Certificate.

Step 4 Information disclosure and corporate seal

Immediately after receiving the Enterprise Registration Certificate, the Investor proceeds to publish enterprise information on the national portal on enterprise registration and make a seal

Step 5 Carry out the initial tax registration procedure

The law currently sets a certain time limit to force enterprises to complete initial tax declaration procedures for newly established enterprises. At this step, enterprises also need to complete the obligation to pay license tax and register digital signatures and electronic invoices. This is a condition for enterprises to be allowed to issue invoices to clients as well as other tax-related activities.

Step 6 Apply for individual licenses

In addition, enterprises shall carry out procedures to issue Enterprise Registration Certificates (ERC), and Investment Registration Certificates (IRC). In some cases, the law sets mandatory requirements for foreign enterprises and investors to carry out procedures to be licensed and approved by specialized management agencies before actual business activities, such as:

Certificate of food safety conditions is a mandatory condition that enterprises providing food services, restaurants, processing… must comply with.

Business license When foreign-invested enterprises carry out business activities related to several special service sectors and goods purchase and sale activities, they are required to carry out procedures for applying for a business license before actual operations, typically we can mention logistics services, commercial intermediaries, e-commerce…And several other types of licenses depending on the specific field of operation of the enterprise

LIST OF DOCUMENTS

To prepare for establishing a foreign enterprise in Vietnam, individual/organizational investors will need to prepare the following documents:

Investor’s legal information, including:

  • Passport (for individual investors);
  • Establishment license, business license, or equivalent documents (for institutional investors);
  • Passport/ID card/ citizen identification card of investor’s authorized representative (for institutional investors);
  • Passport/ID card/ citizen identification card of legal representative of economic organization.

Documents proving the Investor’s financial capacity are one of the following documents:

  • Financial statements of the most recent 02 years of the institutional investor;
  • Commitment to financial support from the parent company;
  • Commitment to financial support from the financial institution;
  • Guarantee of the investor’s financial capacity;
  • Confirm the bank account balance or bank account statement of the individual investor.

Legal documents on the expected location of the headquarters and documents recording the Investor’s leasing status:

  • Lease contract for the location of the investment project;
  • Land use rights Certificate;
  • House Ownership Certificate;
  • Documents proving the lessor’s right to sublease in case the lessor is the sublessee from the investor of the building intended to be the company’s headquarters.

With the investment registration procedure, the submission of documents about the proposed headquarters is mandatory, so at the time when the company has not been established, the parent company (Investor being an organization) or one of its members (Investor being an individual) establishes a document to lease headquarters with the lessor.

COMMITMENT TO SERVICES

On time

All that we do will be planned specifically in terms of time and content. You can control what we do, and the time to completion, and in all cases, we help you maintain the enterprise’s compliance with the deadlines with competent authorities and employees.

Exactly

We commit to the accuracy of the contents of consultation, established documents, and services we provide to customers. We aim to provide you with a safe and effective legal solution for your business operations.

Security

We establish a confidentiality commitment with you, so information about the enterprise, human resources, finance, etc., and other contents related to enterprises and investors will only be disclosed with your consent or in accordance with the laws of Vietnam.

SERVICE PERFORMANCE PROCESS

Assign

CDLAF assigns designated personnel responsible for ensuring information security, ensuring that only assigned individuals have the right to access information and handle client communication.

Collect information and prepare the service contents

Assigned personnel are responsible for collecting clients information, reviewing regulations and preparing service content.

Control the quality

The Board of Lawyers and Counsels reviews the service content prepared by the assigned personnel before it is sent to clients for their review.

Clients’ approval

Clients review and approve the service content prepared by CDLAF.  When requested, meetings are held to explain the prepared content.

Completion

Personnel responsible for service completion directly implement it at the competent authority (if required). They also monitor the progress, report the results, and hand them over to clients.

After-service support

Guide clients to perform necessary tasks related to the delivered results and provide updates on changes in legal regulations.

REASONS FOR CHOOSING CDLAF’S SERVICES

  • We provide you with effective and comprehensive legal solutions, help you save your money, maintain compliance in the enterprise, and simplify all legal issues when doing business in Vietnam;
  • As a law firm established in Vietnam, we have close relationships and knowledge of working methods, and policies of competent authorities, which facilitates you when operating in Vietnam;
  • CDLAF Lawyers have held many important positions in law firms, banks, financial enterprises, foreign enterprises. Therefore, our lawyers provide students with the legal regulations as well as the actual solutions and opinions of competent authorities, see more about human resources.
  • The system of forms about enterprise, labor, tax, etc. available and constantly updated will be provided as soon as customers request.

Contact Us

Are you confused? If you want to discuss your problem more specifically, let us help you, please fill in the information in the table below and send it to us. A free 45-minute consultation email or meeting will be arranged to help you better understand your problem solving problem.

    FAQ QUESTIONS: Capital contribution, share purchase in Vietnamese enterprises

    What is a popular indirect investment form in Vietnam?
    Is there a limit on the ratio of foreign investor’s capital contribution and shares in a company in Vietnam?
    Which foreigners are issued temporary residence cards?
    Is it required to apply for a work permit for foreign investors who are members or shareholders of a company in Vietnam?
    Is the income of foreign investors in Vietnam subject to tax?

    Our partners

    Associations

    error: Content is protected !!