1. Regulations and conditions

Foreign investors are entitled to contribute capital, purchase shares or purchase capital contributions of economic organizations but must satisfy the following regulations and conditions:

Firstly, market access conditions for foreign investors (investor nationality, capital contribution ratio, objectives – business lines) are specified in Article 9 of the Law on Investment 2020.

Second, national defense and security must be ensured in accordance with the Law on Investment 2020.

Third, the provisions of the land law on conditions for receiving land use rights and conditions for land use in islands, communes, wards, border towns, communes, wards and coastal towns.

2. Dossiers of registration for capital contribution, share purchase, capital contribution

A dossier of registration for capital contribution, share purchase and capital contribution includes the following documents:

– A written registration of capital contribution, share purchase or capital contribution includes the following contents: information on enterprise registration of economic organizations to which foreign investors plan to contribute capital, purchase shares or contributed capital; business lines; list of founding shareholders, list of shareholders being foreign investors (if any); the percentage of ownership of charter capital of foreign investors before and after capital contribution, share purchase or capital contribution to economic organizations; transaction value of contracts for capital contribution, share purchase and capital contribution; information on investment projects of economic organizations (if any);

– Copies of legal papers of individuals, organizations contributing capital, buying shares, purchasing contributed capital and economic organizations with foreign investors contributing capital, buying shares or purchasing contributed capital;

– Written agreement on capital contribution, share purchase, purchase of contributed capital between foreign investors and economic organizations receiving capital contribution, purchase of shares or contributed capital;

– A written declaration (enclosed with a copy) of the land use right certificate of the economic organization receiving capital contribution, shares or contributed capital of foreign investors (for the cases specified at Points b and c, Clause 2, Article 24 of the 2020 Investment Law). Economic organizations with foreign investors contributing capital, purchasing shares or contributed capital shall be responsible before law for the accuracy and truthfulness of the declaration.

3. Procedures for registration of capital contribution, purchase of shares, purchase of contributed capital

❖ For foreign investors to carry out procedures for registration of capital contribution, share purchase or purchase of contributed capital of economic organizations before changing members or shareholders if they fall into one of the following cases:

1. The capital contribution, share purchase and purchase of contributed capital increase the ownership ratio of foreign investors in economic organizations doing business in industries and trades with conditional market access for foreign investors;

2. The capital contribution, share purchase or purchase of contributed capital leads to foreign investors and economic organizations specified at Points a, b and c, Clause 1, Article 23 of this Law holding more than 50% of the charter capital of economic organizations in the following cases: increasing the foreign investor’s charter capital ownership ratio from less than or equal to 50% up 50%; increase the rate of ownership of charter capital of foreign investors when foreign investors already own more than 50% of charter capital in economic organizations;

 

3. Foreign investors contribute capital, purchase shares, purchase capital contributions of economic organizations having land use right certificates in islands and border communes, wards and townships; coastal communes, wards and townships; other areas affecting national defense and security.

Submit 01 set of dossiers for registration of capital contribution, share purchase, purchase of contributed capital to the investment registration agency where the economic organization’s head office is located.

Case a, b

– Within 15 days from the date of receipt of a valid dossier as prescribed by law, the investment registration agency shall consider satisfying the conditions for capital contribution, share purchase or purchase of contributed capital specified in Clause 2, Article 24 of the Law on Investment, Clause 4, Article 65 of Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Law Invest and notify investors, except for the case specified in Clause 4, Article 65 of Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law. Written notices shall be sent to foreign investors and economic organizations whose foreign investors contribute capital, purchase shares or purchase contributed capital.

Case c

– Within 03 working days from the date of receipt of a valid dossier as prescribed in Clause 2 of this Article, the investment registration agency shall collect opinions of the Ministry of National Defense and the Ministry of Public Security on the satisfaction of the conditions specified at Point b, Clause 4, Article 65 of this Decree;

– Within 07 working days from the date of receipt of the written request of the investment registration agency, the Ministry of National Defense and the Ministry of Public Security shall comment on the satisfaction of conditions for ensuring national defense and security for economic organizations with foreign investors contributing capital, purchase of shares, purchase of contributed capital; After the time limit for requesting without comments, it is considered to have agreed to satisfy the conditions for ensuring national defense and security for economic organizations with foreign investors contributing capital, buying shares or purchasing contributed capital;

– Within 15 days from the date of receipt of a valid dossier, the investment registration agency shall consider satisfying the conditions for capital contribution, share purchase or purchase of contributed capital as prescribed in Clause 2, Article 24 of the Law on Investment, Clause 4, Article 65 of this Decree and based on opinions of the Ministry of National Defense, Ministry of Public Security to inform investors. Written notices shall be sent to foreign investors and economic organizations whose foreign investors contribute capital, purchase shares or purchase contributed capital.

After foreign investors are approved for capital contribution, share purchase, purchase of contributed capital, economic organizations with foreign investors contributing capital, purchase shares or purchase contributed capital shall carry out procedures for changing members and shareholders at the business registration agency in accordance with the provisions of the law on enterprises and other laws corresponding to each type of organization economic function. The rights and obligations of foreign investors as members and shareholders of economic organizations shall be established upon completion of procedures for changing members and shareholders.

❖ For investors who do not fall into the above specified cases, carry out procedures for changing shareholders and members in accordance with relevant laws when contributing capital, buying shares or purchasing contributed capital of economic organizations at the business registration agency in accordance with the law on enterprises and other laws corresponding to each type of organization economic function.

Above is the content of KALF’s advice on issues related to foreign investors contributing capital, buying shares and contributing capital. All of our above advice opinions are based on applicable legal provisions. If you have any questions or requests about legal issues, please contact us for timely answers.

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