Phuoc & Partners – Vietnam Company Law

Foreign Investment in Vietnam In The Investment Form Of Capital Contribution, Share Purchase, Capital Contribution Purchase

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Article 21 of Law on Investment 2020 stipulates forms of investment including: (i) Investment for the establishment of economic organisations; (ii) Investment in the form of capital contribution, share purchase, purchase of capital contribution; (iii) Implementation of investment projects; (iv) Investment in the form of BCC contracts and (v) New forms of investment and types of economic organisations as prescribed by the Government.

Currently, foreign investors often decide to choose foreign investment in Vietnam in the investment form of capital contribution, share purchase, and capital contribution purchase. This article focuses on the conditions, forms and procedures for foreign investment in Vietnam in the investment form of capital contribution, share purchase, capital contribution purchase in accordance with the prevailing Vietnamese law so that investors can actively grasp the basic information and decide to choose the appropriate form of investment.

Conditions for capital contribution, share purchase, capital contribution purchase by foreign investors

As prescribed by law, investors have the right to contribute capital, purchase shares, purchase capital contributions of economic organisations, but foreign investment in Vietnam in the investment form of capital contribution, share purchase, capital contribution purchase must satisfy the following conditions:

Forms of capital contribution, share purchase, capital contribution purchase

Foreign investors are allowed to  contribute capital to economic organisations in the following forms:

Foreign investors purchase shares or purchase capital contributions of economic organisations in the following forms:

Procedures for foreign investment in Vietnam in the investment form of capital contribution, share purchase, capital contribution purchase

Foreign investors investing in the form of capital contribution, share purchase or capital contribution purchase in one of the following cases must carry out procedures for registration of capital contribution, share purchase or capital contribution purchase at the Department of Planning and Investment of the province or centrally-run city where the economic organisation’s head office is located before carrying out the procedures for change of members, shareholders at the business registration agency in accordance with the law on enterprises and other laws corresponding to each type of economic organisations:

Applications of registration for capital contribution, share purchase, capital contribution purchase include:

If being not in the case that the procedures for registration of capital contribution, share purchase, capital contribution purchase, foreign investors only need to carry out procedures of changing shareholders and members at the business registration office in accordance with the law on enterprises and other laws corresponding to each type of economic organisation.

Rights and obligations of foreign investors in its capacity as members and shareholders of economic organisations shall be established upon completion of procedures of changing members, shareholders.

Thus, before choosing this type of investment as well as in the process of investment implementation, foreign investors must clearly understand the provisions of law, operation situation, financial capacity of the economic organization expected to invest to limit legal risks and protect their legitimate rights and interests. Therefore, in order to ensure foreign investment in Vietnam in the form of capital contribution investment, share purchase, capital contribution purchase in compliance with the law, foreign investors should search and choose to use the legal services of reputable law firms in Vietnam with experience in corporate and investment legal consultancy who can provide useful legal advice for saving investors’ time and costs to carry out procedures related to  foreign investment in Vietnam in the investment form of capital contribution, share purchase, capital contribution purchase.

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