Capital Contribution via Technology

Capital Contribution via Technology is the latest procedure for contributing capital via technology that requires investors and enterprises to strictly comply with the Law on Enterprises and the Law on Technology Transfer. Determining the value and the process of transferring technology ownership plays a decisive role in the transaction’s legality. In the following article, Long Phan Consulting Company provides detailed information on the procedural steps for contributing capital via technology.

What is technology based investment?

Under Article 5 of the 2017 Law on Technology Transfer (amended and supplemented in 2025), contributing capital via technology is a form of technology transfer. It involves transferring technology ownership rights or the right to use technology from the transferring party to the receiving party.

According to Article 4 of the 2017 Law on Technology Transfer (amended by Clause 3, Article 1 of the 2025 Amended Law on Technology Transfer), the technology objects eligible for capital contribution include:

• Technical know-how and technological know-how.
• Technological schemes and processes; technical solutions, parameters, designs, and diagrams; models, algorithms, formulas, software, information, and data.
• Solutions for rationalizing production and innovating technology.
• Machinery and equipment accompanying any of the above objects.

Contributing capital via technology means the founding member/shareholder uses the value of the technology transfer rights to contribute to the enterprise’s assets. The scope of the transferred rights (agreed upon by the parties) can include exclusive or non-exclusive use, and the right to sub-license to a third party. Once contributed, the founding member/shareholder is no longer the owner of this asset, the technology use rights belong to the enterprise.

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The legal basis for contributing technology as capital

Clause 1, Article 34 of the 2020 Law on Enterprises affirms that contributed assets can be Vietnamese Dong, freely convertible foreign currencies, gold, land use rights, intellectual property rights, technology, technical know-how, and other assets that can be valued in Vietnamese Dong. Only individuals and organizations that are lawful owners or have lawful use rights over these assets may use them for capital contribution.

Additionally, Article 8 of the 2017 Law on Technology Transfer (amended by Clause 6, Article 1 of the 2025 Amended Law) stipulates that lawful owners of technology may use it to contribute capital to investment projects or enterprises and commercialize it in accordance with laws on science, technology, intellectual property, public asset management, and enterprises.

Conditions for contributing capital in the form of technology

Individuals and organizations must ensure the following conditions are met:

• First, the technology must not be prohibited or unlawfully restricted from transfer: Prohibited technologies include those failing to meet safety/environmental standards, causing adverse socio-economic/security impacts, utilizing outdated or toxic methods, or falling under State secrets. Restricted technologies (which require specific licenses) include those no longer widely used in developed countries, generating hazardous waste, creating genetically modified products, or impacting traditional customs and national core exports.
• Second, the technology transfer must be registered if required by law: Registration with the state management agency for science and technology is mandatory for transfers from abroad into Vietnam, from Vietnam abroad, and domestic transfers utilizing state capital or the state budget (excluding restricted technologies already granted a Transfer License).
• Third, the contributor must be the lawful owner: According to Article 34 of the 2020 Law on Enterprises, only the legal owner (the person named on the protection title, intellectual property confirmation, or other proving documents) has the right to use the technology for capital contribution.
• Fourth, the technology must be evaluated and expressed in Vietnamese Dong (VND): Under Article 36 of the 2020 Law on Enterprises, assets other than VND must be evaluated by the founding members/shareholders or an independent appraisal organization before contribution.

Procedures for contributing capital in the form of technology

Once the technology meets the contribution conditions, the following steps must be executed to contribute it to the enterprise:

1. Step 1: Asset Valuation: Because technology is not cash (VND), it must undergo valuation under Article 36 of the 2020 Law on Enterprises. The asset must be evaluated by the founding members/shareholders via a consensus principle or by a professional appraisal organization. If an appraisal organization is used, over 50% of the founding members/shareholders must approve the value. If the asset is overvalued compared to its actual value at the time of contribution, the founding members/shareholders are jointly liable to contribute the difference and compensate for any damages caused by deliberate overvaluation.
2. Step 2: Drafting the Technology Transfer Contract (Capital Contribution Contract): Under Article 22 of the 2017 Law on Technology Transfer, the transfer must be established in writing or an equivalent form under the Civil Code. The contract must comprehensively detail: information of both parties; the name and object of the transferred technology; products created and quality standards; the transfer of ownership/use rights; transfer methods; rights and obligations; valuation and payment methods; contract term and effective date; transfer schedule and location; warranty responsibilities; breach penalties and liabilities; and dispute resolution mechanisms. While notarization is not legally mandatory, it is highly recommended to secure greater legal validity.
3. Step 3: Transferring Technology Ownership to the Enterprise at Competent Agencies: According to enterprise laws, the ownership of the technology asset must be officially transferred to the enterprise. Individuals and organizations must execute this by changing the registered owner of the technology rights at the competent state agencies.

Long Phan Consulting Company provides consulting services on procedures for capital contribution using technology

Long Phan Consulting Company provides comprehensive consulting services to assist you in professionally completing the procedures for contributing intellectual property as capital. We have a deep understanding of regulations concerning businesses, intellectual property, and complex intangible asset transactions. Our team of experienced experts will ensure that all your documents comply with current legal regulations and optimize economic benefits.

• Provide direct support in drafting and reviewing the capital contribution contract system.
• We will work on your behalf with government agencies to complete the procedures for technology registration, valuation, and ownership transfer.
• Draft the technology contribution agreement and asset valuation report according to the prescribed template.
• The representative will carry out the technology transfer registration procedures at the competent authorities.
• Make changes to the business registration details related to increasing charter capital or changing members.
• Providing advice on tax and accounting issues related to technology assets after capital contribution.

Some frequently asked questions when carrying out the procedure of contributing capital through technology

The following, Long Phan Consulting Company are some frequently asked questions regarding the latest technology-based capital contribution procedures. We invite interested clients to refer to them:

What are the rights of organizations and individuals in technology transfer activities?

Based on the provisions of Article 7 of the 2017 Law on Technology Transfer, as amended by Clause 5, Article 1 of the 2025 Law on Amended Technology Transfer, regarding the right of organizations and individuals to transfer technology, the following applies:

1. Ownership and usage rights of technology are established, recognized, and protected in accordance with the provisions of the law on intellectual property, the law on science, technology and innovation, the law on the management and use of public assets, the law on civil matters, other relevant legal provisions, and international treaties to which the Socialist Republic of Vietnam is a party.
2. The owner of the technology has the right to transfer ownership and the right to use the technology.
3. Organizations and individuals with the right to use technology may transfer that right to use to other organizations and individuals when the technology owner agrees in writing or in other forms as prescribed by law.
4. The scope of technology transfer as agreed upon by the parties includes:
   • The right to use proprietary or non-proprietary technology;
   • The right to transfer the right to use the technology from the transferee to a third party.
5. The technology transferee has the right to improve, develop, and exploit the technology based on the transferred technology in accordance with the law on intellectual property and other relevant laws.
6. In cases where technology is owned or used by multiple organizations or individuals, the transfer of ownership or usage rights of the technology shall be carried out in accordance with the provisions of this Law, civil law, and other relevant laws.
7. In cases where technology is integrated into a product, machinery, equipment, or system, ownership or the right to use the technology does not automatically arise simultaneously with ownership of that product, machinery, equipment, or system, unless otherwise provided by law or agreed upon by the parties in accordance with the law. Ownership or the right to use the technology must be determined separately from the ownership of the product, machinery, equipment, or system incorporating the technology.

Which types of technologies are encouraged for transfer?

The types of technologies encouraged for transfer are stipulated in Article 9 of the Law on Technology Transfer 2017, amended and supplemented in 2025, specifically as follows:

1. High-tech technologies are prioritized for investment and development, including strategic technologies as stipulated by the law on high-tech technologies.
2. Advanced technologies, new technologies, clean technologies, and green technologies suitable to Vietnam’s socio-economic conditions are encouraged to be transferred from abroad to Vietnam and domestically when they meet one of the following requirements:
   • To create products of higher quality and greater competitiveness compared to products created using similar existing technologies;
   • Creating new products and services;
   • Creating new services, industries, and professions in the production, manufacturing, and processing of products; raising and cultivating new, tested varieties;
   • Saves resources, energy, and raw materials compared to similar technologies currently available in Vietnam;
   • Production and utilization of new and renewable energy; high-efficiency energy storage;
   • To create machinery and equipment to improve the quality of education and training; medical machinery and equipment, and pharmaceuticals to serve in examination, treatment, and protection of human health, and to improve the physical quality of Vietnamese people;
   • Detecting, responding to, and forecasting to prevent and mitigate natural disasters and epidemics; conducting rescue operations; protecting the environment, adapting to climate change, and reducing greenhouse gas emissions;
   • Synchronized production along the value chain has high socio-economic efficiency;
   • Create products that can be used simultaneously for defense, security, and civilian purposes;
   • Developing and modernizing traditional crafts.
3. Technology; machinery and equipment accompanying the technology as stipulated in point d, clause 1, Article 4 of the Law on Technology Transfer 2017, amended and supplemented in 2025, currently available in Vietnam, except for technologies stipulated in clauses 1 and 2 of Article 9, and clause 2 of Article 10 of the Law on Technology Transfer 2017, amended and supplemented in 2025; technologies using raw materials that are domestically produced products, semi-products, and supplies are encouraged to be transferred abroad.

What are the circumstances under which the transfer of technology from foreign countries to Vietnam and the transfer of technology within the country are restricted?

According to Clause 1, Article 10 of the 2017 Law on Technology Transfer, as guided by Article 3 of Decree 76/2018/ND-CP on restrictions on the transfer of technologies from foreign countries to Vietnam and domestic transfer, the following cases are subject to restrictions:

• The technology, machinery, and equipment associated with it are no longer commonly used in developed industrial countries.
• Use of hazardous chemicals or generation of hazardous waste must comply with national technical standards and regulations.
• Creating products through genetic modification.
• Using radioactive materials to produce radioactive substances that meet national technical standards and regulations.
• Use resources and minerals in a way that limits domestic exploitation.
• The technology for breeding, raising, and cultivating new varieties has not yet been tested.
• Creating products that negatively impact social customs, traditions, and morals.

What actions are strictly prohibited in technology transfer activities?

The following acts are strictly prohibited in technology transfer activities, as stipulated in Article 12 of the 2017 Technology Transfer Law:

• Exploiting technology transfer to negatively impact national defense, security, national interests, human health, the environment, ethics, and national customs; infringing upon the legitimate rights and interests of organizations and individuals; and destroying natural resources and biodiversity.
• Transfer of prohibited technologies; unauthorized transfer of restricted technologies.
• Violation of regulations regarding technology transfer rights.
• Deception and falsification in the drafting and execution of technology transfer contracts, technology transfer service contracts, technology content in contracts, and investment project documents.
• Obstructing or refusing to provide information on technology transfer activities as requested by competent state agencies.
• Disclosing technological secrets in violation of the law and hindering technology transfer activities.
• Using technology that is not in accordance with the technology approved and licensed by the competent state management agency.

How is the valuation of technology-based assets contributed as capital regulated?

Technology is an intangible asset, and its value is often subjective. Therefore, valuing technology is the most challenging aspect due to its intangible nature and fluctuating market value. The law stipulates two forms of valuation in Article 36 of the 2020 Enterprise Law:

• The founding members/shareholders mutually agree on and determine the value in Vietnamese Dong based on the principle of consensus.
• Hire a professional valuation firm.

However, if the technology is overvalued, the investors are jointly liable to cover the difference and compensate for any resulting losses. This risk is particularly significant for startups whose technology has not yet generated stable revenue.

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Conclusion

Long Phan Consulting Company is committed to providing standardized advisory services to maximize the protection of Clients’ rights in capital contribution transactions. We accompany enterprises from the valuation stage and dossier drafting until the completion of all administrative procedures. If you require immediate assistance, please contact us directly via Hotline 1900636389.