Procedures need to be followed when a new investor contributes capital to the project is an important basis to ensure transparency and legality in adjusting investment capital structure. Implementing the correct procedures helps businesses record changes in investors, ensure the rights and obligations of related parties, and create favorable conditions for the project to continue to deploy stably and attract more development resources.
Procedures need to be followed when a new investor contributes capital to the project
Conditions for contributing capital to investment projects
Conditions for contributing capital to investment projects are stipulated in the Law on Investment 2020, requiring investors to comply with market access conditions, ensure security and defense, and follow correct procedures according to the type of business and capital origin. Specifically:
For domestic investors
According to Clause 1, Article 65 of the Decree 31/2021/ND-CP, domestic investors contributing capital to investment projects must comply with the provisions of the Law on Enterprise and relevant laws appropriate to each type of economic organization.
Domestic investors can contribute capital in the following forms:
Buy shares issued for the first time or additional shares issued by a joint stock company;
Contribute capital to limited liability companies and partnerships;
Contribute capital to other economic organizations.
Unlike foreign investors, domestic investors do not have to carry out capital contribution registration procedures before changing members or shareholders.
For enterprises with 100% charter capital held by the state, the representative of the state capital invested in the enterprise needs to comply with regulations on management and use of state capital invested in production and business at the enterprise and regulations on management and use of public assets when carrying out investment activities in the form of capital contribution.
Conditions for capital contribution for domestic investors
For foreign investors
When contributing capital to investment projects in Vietnam, foreign investors must meet more stringent conditions. Pursuant to Article 24 of the Law on Investment 2020 and Clause 4, Article 65 of Decree 31/2021/ND-CP, foreign investors contributing capital, purchasing shares, purchasing capital contributions in economic organizations established in Vietnam must meet the following conditions including market access, national defense – security, and land use conditions:
Foreign investors must meet market access conditions as prescribed in Clause 3, Article 9 of the Law on Investment 2020 and Articles 15, 16, 17 of Decree 31/2021/ND-CP. This involves determining conditional investment sectors and the maximum capital ownership ratio of foreign investors in specific sectors.
Foreign investors must ensure national defense, security and land use conditions for economic organizations with foreign investors contributing capital. Especially in cases where the economic organization has a Certificate of land use rights in islands, communes, wards, border towns and coastal communes, wards and towns; or other areas that affect national defense and security.
In summary, capital contributions by foreign investors in Vietnam must strictly comply with legal conditions related to investment industries, ownership ratio, national defense – security and land use management, to ensure control and compliance with Vietnam’s socio-economic development policies.
Procedures need to be followed when a new investor contributes capital to the project
Article 21 of the Law on Investment 2020 clearly stipulates that the form of capital contribution investment and capital contribution purchase is one of the 5 forms of investment in Vietnam. When a new investor contributes capital to the project, the procedures that need to be followed will be different depending on each case. Specifically:
In case a domestic investor contributes capital to a project, the project investor needs to carry out procedures to change the business registration content and adjust the investment project capital (if capital contribution changes the capital source of the project);
In case a foreign investor contributes capital to the project, the investor needs to register to contribute capital and purchase the capital contribution; then adjust the capital of the investment project (if the capital contribution changes the project’s capital source) and make changes to the business registration content.
In this article, we focus on procedures for adjusting capital sources to implement investment projects when a new investor contributes capital to the project. Specifically includes the following cases:
In case the investment project is not subject to procedures for approval of investment policy adjustments
When a new investor contributes capital to the project, in case the investment project is not subject to investment policy approval or the project has been approved for investment policy but is not subject to approval for investment policy adjustment, the investor only needs to make adjustments to the investment registration certificate. The adjustment procedure includes the following steps:
Step 1: Prepare documents:
According to the provisions of Clause 2, Article 47 and Clause 1, Article 44 of Decree No. 31/2021/ND-CP, documents to be prepared include:
Document requesting adjustment of investment project;
Report on the implementation of investment projects up to the time of adjustment;
The investor’s decision on adjusting the investment project (in case the investor is an organization);
Explain or provide documents related to the adjustment of the contents specified in Points a, b, c, d, đ, e, g and h, Clause 1, Article 33 of the Law on Investment (if any);
Capital contribution contract or capital contribution agreement between existing investors and new investors;
Copy of legal documents of the new investor (for individual investors: copy of ID card/CCCD/Passport; for institutional investors: copy of Business Registration Certificate or other equivalent document confirming legal status).
Step 2: The investor submits 01 set of documents prepared as above to the investment registration agency competent to issue the investment registration certificate.
Step 3: Within 10 days from the date of receiving valid documents, the Investment Registration Authority adjusts the Investment Registration Certificate for the investor.
In case the investment project is subject to approval procedures for adjusting investment policies
According to the provisions of Point c, Clause 3, Article 41 of the Law on Investment 2020, in case a new investor contributes capital to an investment project, changing the total investment capital by 20% or more, changing the scale of the investment project, the investor must carry out procedures to approve the adjustment of investment policies. This procedure includes:
For investment projects under the Prime Minister’s investment policy approval authority:
Pursuant to the provisions of Article 44 of Decree 31/2021/ND-CP, adjustment procedures include the following steps:
Step 1: The investor submits 08 sets of documents to the Ministry of Planning and Investment (after the merger, the Ministry of Finance). Profile includes:
Document requesting adjustment of investment project;
Report on the implementation of investment projects up to the time of adjustment;
Investor’s decision on adjusting investment projects for institutional investors;
Explain or provide documents related to the adjustment of the contents specified in Points b, c, d, đ, e, g and h, Clause 1, Article 33 of the Law on Investment (if any).
Within 03 working days from the date of receiving the valid dossier, the Ministry of Finance sends the dossier to the competent state agency as prescribed in Clause 3, Article 32 of Decree 31/2021/ND-CP to get opinions on the contents of investment project adjustments.
Within 15 days from the date of receipt of valid documents, the consulted agencies shall have opinions on the content of adjusting the project within the scope of state management of that agency.
Step 3: Within 35 days from the date of receiving valid documents, the Ministry of Finance prepares an appraisal report on the investment project adjustment contents to submit to the Prime Minister.
Step 4: Within 05 working days from the date of receiving the appraisal report from the Ministry of Finance, the Prime Minister decides to approve the investment policy adjustment. The decision to approve the investment policy adjustment is sent to the Ministry of Finance, the Investment and Investor Registration Authority, ministries and agencies related to the implementation of the investment project, and the investor approval agency (if any).
Note: For investment projects to build and operate infrastructure of industrial parks and export processing zones, investors submit documents to the Management Board of industrial parks, export processing zones, high-tech zones, economic zones or the Department of Finance in case the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones has not yet been established.
For investment projects under the investment policy approval authority of the Provincial People’s Committee
Pursuant to the provisions of Article 45 of Decree 31/2021/ND-CP, adjustment procedures include the following steps:
Step 1: The investor submits 04 sets of documents similar to the case of adjusting investment projects under the Prime Minister’s investment policy approval authority to the Investment Registration Authority.
Step 2: The investment registration agency processes the documents:
Within 03 working days from the date of receiving the valid dossier, the Investment Registration Authority sends the dossier to the competent state agency as prescribed in Point b, Clause 4, Article 33 of Decree 31/2021/ND-CP to get opinions on the contents of investment project adjustments;
Within 15 days from the date of receipt of valid documents, the consulted agencies shall have opinions on the content of adjusting the project within the scope of state management of that agency;
Within 25 days from the date of receiving valid documents, the Investment Registration Authority prepares an appraisal report on the adjusted contents of the investment project to submit to the Provincial People’s Committee;
Within 07 working days from the date of receiving the documents and appraisal report from the Investment Registration Authority, the Provincial People’s Committee decides to approve the investment policy adjustment. The decision to approve the investment policy adjustment is sent to the Investment and Investor Registration Authority, the Investor Approval Authority in case of investor approval according to the provisions of Clause 3, Article 29 of the Law on Investment, Departments and agencies related to the implementation of investment projects.
For investment projects subject to investment policy approval of the Management Board of industrial parks, export processing zones, high-tech parks, and economic zones
Pursuant to the provisions of Article 46 of Decree 31/2021/ND-CP, adjustment procedures include the following steps:
Step 1: The investor submits 04 sets of documents similar to the case of adjusting investment projects under the Prime Minister’s investment policy approval authority to the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones.
Step 2: Competent agency processes documents:
Within 03 working days from the date of receiving valid dossiers, the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones shall send dossiers to competent state agencies as prescribed in Point b, Clause 7, Article 33 of Decree 31/2021/ND-CP to get opinions on the contents of investment project adjustments;
Within 15 days from the date of receipt of valid documents, the consulted agencies shall have opinions on the content of adjusting the project within the scope of state management of that agency;
Within 25 days from the date of receiving valid documents, the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones decides to approve the investment policy adjustment. The decision approving the investment policy adjustment is sent to investors and agencies related to the implementation of the investment project.
Thus, depending on each specific case of the project and the level of change when a new investor contributes capital, the investor needs to determine the correct legal process to be followed to ensure that the adjustment of the investment project is carried out legally, fully and promptly according to the provisions of current law.
In-depth consulting services on procedures to be followed when a new investor contributes capital to the project at Long Phan Consulting Company
In-depth consulting services on capital contribution procedures for new investors’ projects at Long Phan Consulting Company provide comprehensive solutions for businesses. We own a team of experienced experts in the field of investment and business, who will provide customers with the most professional and effective support service.
Long Phan Consulting Company provides specialized services, including:
Consulting on capital contribution conditions applicable to each type of investor;
Review and support the preparation of documents and carry out procedures for adjusting investment projects;
Carry out procedures for registering capital contribution, purchasing shares, purchasing capital contributions for foreign investors;
Carry out procedures to change business registration when there is a new investor;
Support in negotiating and drafting capital contribution contracts;
Consulting on tax obligations and other issues related to capital contributions of new investors.
With a commitment to accompany businesses on every step of development, Long Phan Consulting Company is always ready to bring the most optimal and effective solutions to all investors’ capital contribution needs.
Frequently asked questions
These are frequently asked questions about the procedures that need to be followed when a new investor contributes capital to the project.
In what form can foreign investors contribute capital?
Foreign investors can contribute capital in cash, assets, intellectual property rights, technology, or through purchasing shares/capital contributions of economic organizations in Vietnam.
Is it necessary to establish a capital contribution contract?
Yes, capital contribution contracts are an important legal basis that records capital contribution commitments, rights and obligations between related parties, and are often required in investment project adjustment documents.
Do I need to pay tax when transferring capital contribution?
Yes, the transfer of contributed capital or shares may incur corporate income tax or personal income tax obligations, depending on the transferor.
If a project does not have an Investment Registration Certificate, can it contribute capital?
No, the project must have a valid Investment Registration Certificate before changing or adding investors through capital contribution.
If a foreign investor contributes less than 51% capital, is prior approval required?
Depending on the industry and region, if you are not in an industry with market access conditions, and the ownership ratio is below the threshold, you do not need to apply for prior approval but must still register at the Department of Finance.
Are there any limits on capital contribution to real estate projects?
Yes, there are. Foreign investors are not allowed to contribute capital or own real estate projects in some sensitive areas related to national defense and security or that have not been permitted according to Vietnamese law.
Do foreign investors need to open an investment account in Vietnam?
Yes, all capital contribution transactions must be made through an investment account in foreign currency or Vietnamese Dong opened at a licensed bank in Vietnam.
Is there a limit to the number of investors in a project?
There is no specific quantity limit, but it is necessary to ensure that the governance structure is suitable for the type of business and complies with regulations on conditional industries.
Conclude
Procedures to be followed when a new investor contributes capital to the project require strict compliance with current Vietnamese legal regulations. Long Phan Consulting Company with a team of experienced legal experts will assist customers in handling the entire process from determining capital contribution conditions to completing investment registration procedures. Please contact us immediately via the hotline 0906735386 for detailed advice and support in resolving capital contribution procedures quickly and effectively.
Procedures need to be followed when a new investor contributes capital to the project
Procedures need to be followed when a new investor contributes capital to the project is an important basis to ensure transparency and legality in adjusting investment capital structure. Implementing the correct procedures helps businesses record changes in investors, ensure the rights and obligations of related parties, and create favorable conditions for the project to continue to deploy stably and attract more development resources.
Table of Contents
Conditions for contributing capital to investment projects
Conditions for contributing capital to investment projects are stipulated in the Law on Investment 2020, requiring investors to comply with market access conditions, ensure security and defense, and follow correct procedures according to the type of business and capital origin. Specifically:
For domestic investors
According to Clause 1, Article 65 of the Decree 31/2021/ND-CP, domestic investors contributing capital to investment projects must comply with the provisions of the Law on Enterprise and relevant laws appropriate to each type of economic organization.
Domestic investors can contribute capital in the following forms:
Unlike foreign investors, domestic investors do not have to carry out capital contribution registration procedures before changing members or shareholders.
For enterprises with 100% charter capital held by the state, the representative of the state capital invested in the enterprise needs to comply with regulations on management and use of state capital invested in production and business at the enterprise and regulations on management and use of public assets when carrying out investment activities in the form of capital contribution.
For foreign investors
When contributing capital to investment projects in Vietnam, foreign investors must meet more stringent conditions. Pursuant to Article 24 of the Law on Investment 2020 and Clause 4, Article 65 of Decree 31/2021/ND-CP, foreign investors contributing capital, purchasing shares, purchasing capital contributions in economic organizations established in Vietnam must meet the following conditions including market access, national defense – security, and land use conditions:
In summary, capital contributions by foreign investors in Vietnam must strictly comply with legal conditions related to investment industries, ownership ratio, national defense – security and land use management, to ensure control and compliance with Vietnam’s socio-economic development policies.
Procedures need to be followed when a new investor contributes capital to the project
Article 21 of the Law on Investment 2020 clearly stipulates that the form of capital contribution investment and capital contribution purchase is one of the 5 forms of investment in Vietnam. When a new investor contributes capital to the project, the procedures that need to be followed will be different depending on each case. Specifically:
>>> Reference:
In this article, we focus on procedures for adjusting capital sources to implement investment projects when a new investor contributes capital to the project. Specifically includes the following cases:
In case the investment project is not subject to procedures for approval of investment policy adjustments
When a new investor contributes capital to the project, in case the investment project is not subject to investment policy approval or the project has been approved for investment policy but is not subject to approval for investment policy adjustment, the investor only needs to make adjustments to the investment registration certificate. The adjustment procedure includes the following steps:
Step 1: Prepare documents:
According to the provisions of Clause 2, Article 47 and Clause 1, Article 44 of Decree No. 31/2021/ND-CP, documents to be prepared include:
Step 2: The investor submits 01 set of documents prepared as above to the investment registration agency competent to issue the investment registration certificate.
Step 3: Within 10 days from the date of receiving valid documents, the Investment Registration Authority adjusts the Investment Registration Certificate for the investor.
In case the investment project is subject to approval procedures for adjusting investment policies
According to the provisions of Point c, Clause 3, Article 41 of the Law on Investment 2020, in case a new investor contributes capital to an investment project, changing the total investment capital by 20% or more, changing the scale of the investment project, the investor must carry out procedures to approve the adjustment of investment policies. This procedure includes:
For investment projects under the Prime Minister’s investment policy approval authority:
Pursuant to the provisions of Article 44 of Decree 31/2021/ND-CP, adjustment procedures include the following steps:
Step 1: The investor submits 08 sets of documents to the Ministry of Planning and Investment (after the merger, the Ministry of Finance). Profile includes:
Step 2: Competent authorities conduct consultation:
Within 03 working days from the date of receiving the valid dossier, the Ministry of Finance sends the dossier to the competent state agency as prescribed in Clause 3, Article 32 of Decree 31/2021/ND-CP to get opinions on the contents of investment project adjustments.
Within 15 days from the date of receipt of valid documents, the consulted agencies shall have opinions on the content of adjusting the project within the scope of state management of that agency.
Step 3: Within 35 days from the date of receiving valid documents, the Ministry of Finance prepares an appraisal report on the investment project adjustment contents to submit to the Prime Minister.
Step 4: Within 05 working days from the date of receiving the appraisal report from the Ministry of Finance, the Prime Minister decides to approve the investment policy adjustment. The decision to approve the investment policy adjustment is sent to the Ministry of Finance, the Investment and Investor Registration Authority, ministries and agencies related to the implementation of the investment project, and the investor approval agency (if any).
Note: For investment projects to build and operate infrastructure of industrial parks and export processing zones, investors submit documents to the Management Board of industrial parks, export processing zones, high-tech zones, economic zones or the Department of Finance in case the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones has not yet been established.
For investment projects under the investment policy approval authority of the Provincial People’s Committee
Pursuant to the provisions of Article 45 of Decree 31/2021/ND-CP, adjustment procedures include the following steps:
Step 1: The investor submits 04 sets of documents similar to the case of adjusting investment projects under the Prime Minister’s investment policy approval authority to the Investment Registration Authority.
Step 2: The investment registration agency processes the documents:
For investment projects subject to investment policy approval of the Management Board of industrial parks, export processing zones, high-tech parks, and economic zones
Pursuant to the provisions of Article 46 of Decree 31/2021/ND-CP, adjustment procedures include the following steps:
Step 1: The investor submits 04 sets of documents similar to the case of adjusting investment projects under the Prime Minister’s investment policy approval authority to the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones.
Step 2: Competent agency processes documents:
Thus, depending on each specific case of the project and the level of change when a new investor contributes capital, the investor needs to determine the correct legal process to be followed to ensure that the adjustment of the investment project is carried out legally, fully and promptly according to the provisions of current law.
>>> See more: What do you need to prepare when applying for an investment license?
In-depth consulting services on procedures to be followed when a new investor contributes capital to the project at Long Phan Consulting Company
In-depth consulting services on capital contribution procedures for new investors’ projects at Long Phan Consulting Company provide comprehensive solutions for businesses. We own a team of experienced experts in the field of investment and business, who will provide customers with the most professional and effective support service.
Long Phan Consulting Company provides specialized services, including:
With a commitment to accompany businesses on every step of development, Long Phan Consulting Company is always ready to bring the most optimal and effective solutions to all investors’ capital contribution needs.
Frequently asked questions
These are frequently asked questions about the procedures that need to be followed when a new investor contributes capital to the project.
In what form can foreign investors contribute capital?
Foreign investors can contribute capital in cash, assets, intellectual property rights, technology, or through purchasing shares/capital contributions of economic organizations in Vietnam.
Is it necessary to establish a capital contribution contract?
Yes, capital contribution contracts are an important legal basis that records capital contribution commitments, rights and obligations between related parties, and are often required in investment project adjustment documents.
Do I need to pay tax when transferring capital contribution?
Yes, the transfer of contributed capital or shares may incur corporate income tax or personal income tax obligations, depending on the transferor.
If a project does not have an Investment Registration Certificate, can it contribute capital?
No, the project must have a valid Investment Registration Certificate before changing or adding investors through capital contribution.
If a foreign investor contributes less than 51% capital, is prior approval required?
Depending on the industry and region, if you are not in an industry with market access conditions, and the ownership ratio is below the threshold, you do not need to apply for prior approval but must still register at the Department of Finance.
Are there any limits on capital contribution to real estate projects?
Yes, there are. Foreign investors are not allowed to contribute capital or own real estate projects in some sensitive areas related to national defense and security or that have not been permitted according to Vietnamese law.
Do foreign investors need to open an investment account in Vietnam?
Yes, all capital contribution transactions must be made through an investment account in foreign currency or Vietnamese Dong opened at a licensed bank in Vietnam.
Is there a limit to the number of investors in a project?
There is no specific quantity limit, but it is necessary to ensure that the governance structure is suitable for the type of business and complies with regulations on conditional industries.
Conclude
Procedures to be followed when a new investor contributes capital to the project require strict compliance with current Vietnamese legal regulations. Long Phan Consulting Company with a team of experienced legal experts will assist customers in handling the entire process from determining capital contribution conditions to completing investment registration procedures. Please contact us immediately via the hotline 0906735386 for detailed advice and support in resolving capital contribution procedures quickly and effectively.
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