With more than 10 years of experience, we have accompanied many international investors in the process of conducting investment and business activities in Vietnam. During the project implementation, the investor can reduce the investment capital and charter capital according to the actual situation of the project. At that time, investors need to carry out capital adjustment procedures in accordance with Vietnamese law.
Hong Bang Law would like to share with you some essential information about Procedures for Charter Capital reduction in Foreign Direct Investment Companies.
Legal basis
- Investment Law 2020
- Decree 31/2021/ND-CP guidance on the Law on Investment
- Enterprise Law 2020
- Decree No. 01/2021/ND-CP guidance on the Law on Enterprise
General regulation
“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..
“Charter capital” means the total value of assets that have been contributed or promised by the members/partners/owners when the limited liability company or partnership is established, or the total of nominal values of the sold or subscribed shares when a joint-stock company is established.
Requirements
An FDI company can reduce its charter capital if it falls into one of the following cases:
- The company has operated continuously for 02 years or more from the date of enterprise establishment registration and has ensured to pay all debts and other property obligations after they have been returned to members;
The company must fully contribute investment capital and charter capital on time and be recorded in the financial statements of the enterprise. The company may only return a part to the members/shareholders according to their proportion of contributed capital in the charter capital of the company.
- Reduced capital due to insufficient capital contribution on time
The charter capital is not fully and timely paid by the members/owners/shareholders as prescribed in the Enterprise Law 2020. The company reduces capital within 30 days before the last day to fully contribute the charter capital rate.
Procedures
Step 1: Submit an application for adjustment of IRC
The investor of the investment project shall submit 01 application for adjustment of the Investment Registration Certificate to the Investment Registration Authority.
The investment registration agency receives and examines the application. If the application is complete and valid, it shall receive the application and issue a receipt to the investor; if the components of the dossier are incomplete, the receiving specialist/guide will explain to the investor to supplement and complete the dossier.
Step 2: Submit an application to adjust the Enterprise registration certificate
After being issued an amended Investment Certificate, the Investor shall submit an application for adjustment of charter capital information on the ERC at the business registration office. Within 5 working days from the date of receipt of a complete and valid application, the business registration authority shall issue an amended Business Registration Certificate.
Services provided by Hong Bang Law
Hong Bang Law is a company with 10 years of experience in consulting in the field of foreign investment. We have supported many foreign investors to set up companies and accompany them throughout the implementation of investment projects in Vietnam.
Hong Bang Law will accompany customers in the process of reducing charter capital of FDI companies with consulting and supporting services such as:
- Advising customers on conditions, documents and procedures for changing charter capital;
- Drafting legal documents for enterprises related to the content to be adjusted according to the provisions of law and the information provided by the enterprise;
- The authorized representative of the client to carry out the procedures to adjust the charter capital at the competent state agencies;
- Monitor the processing of dossiers by competent state agencies, explain to state agencies on issues related to dossiers;
- Guide enterprises to carry out legal procedures arising after adjusting charter capital.
If you need more detailed advice and answers as well as how to access this service, please contact directly our 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
Wishing you and your family good health, peace and success!
Best regards!
