The growing Vietnamese economy means that it is attracting more and more foreign investors. Capital contribution to buy shares is one of the most popular forms of investment today. In the following article, Hong Bang Law will present this procedure most accurately and completely:

Legal basis

• Investment Law 2020
• Decree 31/2021/ND-CP guidance on the Law on Investment
• Circular 03/2021/TT-BKHDT on investment forms.

Requirements

A foreign investor shall follow procedures for registration of capital contribution or purchase of shares or stakes of a business organization prior to the change of members or shareholders in one of the following cases:

• The capital contribution or purchase of shares or stakes increases the ownership ratio by foreign investors in a business organization conducting business in the restricted business lines;
• The capital contribution or purchase of shares or stakes results in a foreign investor or business organization specified in Points a, b and c Clause 1 Article 23 of Law on Investment holding over 50% of the charter capital of the business organization in the following cases: The holding of charter capital by the foreign investor is increased from less than or equal to 50% to over 50%; the holding of charter capital by the foreign investor is increased while such foreign investor is holding over 50% of the charter capital of the business organization.
• The foreign investor that contributes capital, purchases shares or stakes of a business organization has a certificate of rights to use land on an island or in a border or coastal commune; in a coastal commune; in another area that affects national defense and security.

Clause 1 Article 23 of Law on Investment

“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:

a) 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;

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

c) 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.”

Procedures

Step 1: Submit an application

The investor contributes capital, buys shares or contributed capital and submits a dossier to the Department of Planning and Investment (where the economic organization with foreign investors’ capital contribution, share purchase or contributed capital is located). head office).

Time to receive and return results: During working days from Monday to Friday and Saturday morning (morning from 07:30 to 11:30; afternoon from 13:00 to 17:00).

In case the Investor authorizes another person to submit the application and receive the results of administrative procedures, the person who carries out the procedures for submitting the application and receiving the results of the settlement of the investment registration procedure must present the Investment Registration Certificate ID card or passport or other lawful personal identification papers and the following papers:

• The service provision contract between the Investor and the service organization providing the application, receiving the results and the recommendation letter from that organization for the individual submitting the application and receiving the results; or
• A written authorization for the individual to submit the application and receive the results as prescribed by law.

Step 2: Receive and check the application

The Department of Planning and Investment shall receive and check the dossiers, if the dossiers are complete, they shall receive the dossiers and issue the Certificate of Receipt of dossiers to the investors; if the components of the dossier are incomplete, the receiving specialist/guide will explain to the investor to supplement and complete the dossier.

Step 3: Appraise and approve the application

Within 15 days from the date of receipt of the dossier, the Department of Planning and Investment shall consider the satisfaction of investment conditions for foreign investors and notify the investor so that the investor can carry out the procedures. change shareholders, members according to the provisions of law. In case the conditions are not met, the Department of Planning and Investment shall notify in writing the investor and clearly state the reason.

Step 4: Receiving the result

Investors, based on the appointment date on the application receipt, receive the settlement results at the Department of Planning and Investment.

Application

• A written registration for capital contribution, share purchase or capital contribution, including the following contents: information about the economic organization to which the foreign investor intends to contribute capital, purchase shares or capital contribution; rate of ownership of charter capital of foreign investors after capital contribution, purchase of shares, capital contribution to economic organizations (according to form);
• A copy of the identity card, identity card or passport for an individual; copy of Certificate of Incorporation or other equivalent document certifying legal status for an organization.

Number of documents: 01 set of documents

The time limit for settlement: Within 15 days from the date of receipt of valid dossiers.

Agency carrying out administrative procedures: Department of Planning and Investment

If you need more detailed advice and answers as well as how to access this service, please contact directly the Deputy Director of Sales: Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the toll free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com

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