VI Within the limited scope of this article, Pham Consult would like to share about the process of foreign investment in Vietnam in the form of capital contribution, share purchase, and limited capital contribution purchase in investment law, specifically the Investment Law. April 2020. Detailed content is as follows:
According to Clause 2, Article 21 of the Investment Law 2020, foreign investors are entitled to invest in Vietnam in the following forms:
(1) Investment in establishing economic organizations;
(2) Investing in capital contribution, purchasing shares, purchasing capital contributions;
(3) Implement investment projects;
(4) Investment in the form of BCC contract;
(5) New forms of investment and types of economic organizations according to Government regulations.
Legal basis:
1. Investment Law No. 61/2020/QH14 dated June 17, 2020;
2. Decree 31/2021/ND-CP dated March 26, 2021 detailing and guiding the implementation of a number of articles of the Investment Law;
3. Circular 03/2021/TT-BKHDT dated April 9, 2021 stipulating sample documents and reports related to investment activities in Vietnam, investment from Vietnam to foreign countries and investment promotion.
Content:
1. Investment form:
We would like to note that for some conditional foreign investment industries, foreign investors may not be allowed to invest in the form of capital contribution, share purchase, capital contribution purchase or are subject to rate limits. capital contribution rate. The legal content stated below only applies in cases where the investment industry is not restricted to foreign investors. According to Article 25 of the Investment Law 2020, investors make investments as follows:
Contributing capital to an enterprise established in Vietnam in the form of:
(a) Buy shares issued for the first time or additional shares issued by a joint stock company; (b) Contribute capital to limited liability companies or partnerships;
(c) Contribute capital to other economic organizations that do not fall under the above cases.
Buy shares and capital contributions of enterprises established in Vietnam in the form of:
(a) Purchase shares of a joint stock company from the company or shareholders;
(b) Buying the capital contribution of a member of a limited liability company/capital contributing member to become a member of a limited liability company/capital contributing member of a partnership;
(c) Buying capital contributions of members of other economic organizations that do not fall into the above cases.
2. Legal procedures:
Investors must carry out procedures to register capital contribution, purchase shares, or purchase capital contributions from economic organizations if they fall into the following cases:
The investment leads to an increase in the ownership ratio of foreign investors in economic organizations conducting business lines with conditional market access for foreign investors;
The investment leads to foreign investors and economic organizations specified in Points a, b and c, Clause 1, Article 23 of the Law on Investment 2020 holding more than 50% of the charter capital of economic organizations in the schools. Case: increase the charter capital ownership ratio of foreign investors from below or equal to 50% to above 50%; increase the charter capital ownership ratio of foreign investors when foreign investors already own more than 50% of the charter capital in economic organizations;
Foreign investors investing in economic organizations with land use rights certificates in islands and border communes, wards and towns; coastal communes, wards and towns; other areas that affect national defense and security.
– Document components:
1. Document to register capital contribution, share purchase, capital contribution (according to Form A.I.7 Circular;
2. Copies of legal documents of individuals, investing organizations and economic organizations receiving investment;
3. Written agreement on capital contribution, share purchase, and capital contribution purchase between the foreign investor and the economic organization receiving the investment;
4. Declaration document (attached with a copy) of the land use right certificate of the economic organization receiving the investment (for the cases in section II.(1).(b) and II.(1). (c))
– Place of application: Department of Planning and Investment of provinces and centrally run cities/ Management Board of industrial zones of provinces and centrally run cities where the economic organization is headquartered.
– Document processing time: Results are issued within 15 days from the date of receipt of valid documents.
– Result: Notice of meeting the conditions for capital contribution, share purchase, and repurchase of capital contributions from foreign investors.
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