Regulations on transferring profits from abroad to Vietnam

Transferring profits from abroad to Vietnam is an important financial activity, complying with strict legal regulations. Foreign investors need to clearly understand the relevant regulations and procedures to ensure legal and effective profit transfer. This article by Long Phan will provide detailed information about the regulations and procedures for transferring profits from abroad to Vietnam.

Regulations on transferring profits from abroad to Vietnam

Pursuant to Article 68 Law on Investment 2020, except in the case of retaining profits, transferring profits from abroad to Vietnam is regulated as follows:

• Within 06 months from the date of the tax finalization report or document with equivalent legal value according to the law of the investment-receiving country, the investor must transfer all profits earned and other income from overseas investments to Vietnam.
• During the profit transfer period without transferring profits and other income to Vietnam, the investor must notify the Ministry of Finance and the State Bank of Vietnam in advance in writing. The time limit for repatriating profits is not to exceed 12 months from the date of expiry of the profit transfer time limit.
• In cases where the deadline for transferring profits has passed but the profits have not been repatriated to the country and no notification has been made, or in cases where the extended time limit has passed and the investor has not yet repatriated profits to the country, they will be handled according to the provisions of law.

>>> See more: Consulting on transferring profits from Vietnam to foreign countries for investors

Cases where profits are retained abroad

Article 67 of the Law on Investment 2020 also stipulates a number of cases where investors are allowed to retain profits abroad for reinvestment, including:

• Continue to contribute investment capital abroad when not yet fully contributing capital as registered.
• Increase investment capital abroad.
• Implement new investment projects abroad.

Procedures for transferring profits from abroad to Vietnam

Procedures for transferring profits from abroad to Vietnam includes the following steps:

• Prepare documents: Investors need to prepare documents proving the source of profits, financial reports, tax payment documents abroad, and other related documents.
• Choose money transfer method: Customers can choose different money transfer methods, including money transfer via bank, international money transfer organization, or electronic payment applications.
• Make a money transfer: After completing the documents and choosing the money transfer method, the investor carries out money transfer procedures according to the regulations of the bank or money transfer organization.
• Declare and pay taxes: After receiving money, investors need to declare and pay taxes according to Vietnamese law.

Note on Double Taxation Avoidance Agreement: When transferring money to Vietnam, customers need to pay attention to the Double Taxation Avoidance Agreement between Vietnam and the country where profits arise. If the two countries have signed this agreement, customers can deduct the tax amount paid abroad when paying taxes in Vietnam.

>>> See more: Regulations on transferring profits abroad of FDI enterprises.

Long Phan’s consulting service for transferring profits from abroad to Vietnam

Long Phan Consulting Company providing comprehensive consulting services on transferring profits from abroad to Vietnam, including:

• Consulting on legal regulations related to profit transfer.
• Instructions for preparing documents and money transfer procedures.
• Develop optimal profit transfer plans, ensure legal compliance and save costs.
• Consulting on tax issues related to profit transfer.
• Support in resolving issues that arise during the profit transfer process.
• Check the compatibility of legal regulations between countries.
• Minimize risks for customers.

Frequently Asked Questions (FAQ)

Below are frequently asked questions about transferring profits from abroad to Vietnam:

What documents do investors need to prepare when transferring profits?

Documents include: audited financial statements, tax payment documents abroad, documents proving the source of profits, and other documents required by the bank or money transfer organization.

What money transfer methods can investors use?

Investors can use bank transfers, international money transfer organizations, or e-wallets.

What is the maximum time limit for transferring profits to Vietnam?

The maximum term is 18 months, including 6 months as prescribed and 12 months of extension.

What happens if the investor does not transfer profits on time?

Investors will be handled according to Vietnamese law.

Are investors allowed to retain all profits abroad?

No, profits can only be retained in cases of reinvestment as prescribed by law.

How do double taxation agreements affect profit remittances?

This agreement helps investors avoid having to pay taxes twice for the same profit, by allowing the tax paid abroad to be deducted when paying taxes in Vietnam.

Is there a limit to the maximum amount of profits that can be transferred to Vietnam?

Currently, Vietnamese law does not stipulate a limit on the maximum amount of profit transferred.

What risks should you keep in mind when transferring profits from abroad to Vietnam?

Risks include exchange rate fluctuations, tax policy changes, and arising legal issues.

Conclude

Transferring profits from abroad to Vietnam is a complex process, requiring investors to clearly understand the provisions of law and comply with correct procedures. To ensure the profit transfer process goes smoothly and effectively, customers can contact us via the hotline: 0906735386 for the best advice and support.