Procedures for changing investors in FDI enterprises

Procedures for changing investors in FDI enterprises

Step 1: Foreign investors register for capital contribution, purchase shares, and purchase contributed capital in the enterprise

Foreign investors shall carry out procedures for registration of capital contribution, purchase of shares or purchase of contributed capital of economic organizations before changing members or shareholders if they belong to one of the following cases:

• The contribution of capital, purchase of shares, purchase of contributed capital increases the foreign investors' ownership rate in economic organizations engaged in business lines and trades with conditional market access for foreign investors.

• The contribution of capital, purchase of shares, purchase of contributed capital leads to the fact that foreign investors and economic organizations specified at Points a, b and c, Clause 1, Article 23 of the Law on Investment hold more than 50% of the charter capital ratio of economic organizations in the following cases: increasing the rate of ownership of charter capital of foreign investors from less than or equal to 50% to over 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.

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

Applications include:

• A written registration for capital contribution, share purchase, or capital contribution purchase includes the following contents: information on enterprise registration of the economic organization to which the foreign investor intends to contribute capital, purchase shares, or purchase capital shares contribution; business career; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); rate of ownership of charter capital of foreign investors before and after capital contribution, share purchase, purchase of capital contribution to economic organizations; expected transaction value of the contract of capital contribution, share purchase, purchase of contributed capital; information on investment projects of economic organizations (if any).

• Copies of legal documents of individuals and organizations contributing capital, buying shares, purchasing capital contributions and economic organizations with foreign investors contributing capital, buying shares or purchasing capital contributions.

• Written agreement in principle on capital contribution, share purchase, purchase of capital contributions between foreign investors and economic organizations in which foreign investors contribute capital, purchase shares, purchase capital contributions or between investors foreign investment with shareholders or members of that economic organization.

• A copy of the certificate of land use rights of the economic organization in which foreign investors contribute capital, purchase shares or purchase capital contributions (in case the economic organization has a certificate of land use right on the island, communes, wards, border towns and coastal communes, wards and townships; other areas affecting national defense and security).

Implementation procedure:

• Foreign investors submit applications at the Department of Planning and Investment.

• Within 15 days from the date of receipt of a valid application, the investment registration agency shall consider the satisfaction of conditions for capital contribution, share purchase, purchase of contributed capital and notify the investor. Written notice shall be sent to foreign investors and economic organizations in which foreign investors contribute capital, purchase shares or purchase capital contributions.

Note: In case an economic organization with a foreign investor contributes capital, buys shares or buys a contributed capital, has a certificate of land use rights in islands, communes, wards, border townships and communes, wards, seaside town; In other areas affecting national defense and security, the investment registration agency shall carry out the following procedures:

• Within 03 working days from the day on which the valid application is received, the investment registration agency shall consult with the Ministry of National Defense and the Ministry of Public Security on the satisfaction of the conditions for ensuring national defense, security and control land use case.

• Within 07 working days from the date of receipt of the written request from the investment registration agency, the Ministry of National Defense and the Ministry of Public Security shall give opinions on the satisfaction of conditions for ensuring national defense and security for the organization economic organizations with foreign investors contributing capital, buying shares or buying capital contributions; If the request is not made within the time limit, it shall be deemed to have agreed to the satisfaction of the conditions for ensuring national defense and security for economic organizations in which foreign investors contribute capital, purchase shares or purchase shares, capital.

• Within 15 days from the date of receipt of valid applications, the investment registration agency shall consider meeting the conditions for capital contribution, share purchase, purchase of contributed capital and based on opinions of the Ministry of National Defense, Police to notify investors. Written notice shall be sent to foreign investors and economic organizations in which foreign investors contribute capital, purchase shares or purchase capital contributions.

Step 2: Foreign investors make capital contribution, buy shares, and contribute capital to enterprises with foreign capital

Form of capital contribution: through direct investment capital account in the form of bank transfer.

The members and shareholders transferring capital shall declare tax upon transfer in accordance with the law of personal income tax, corporate income tax (if any).

Step 3: Change the Enterprise Registration Certificate at the Business Registration Office – Department of Planning and Investment

Case 1: New foreign investors contribute capital to the enterprise

Applications of new foreign investors contributing capital to the enterprise:

• Announce change of enterprise registration information signed by the legal representative of the enterprise.

• Resolutions and decisions of the company owner, for single-member limited liability companies; resolutions, decisions and meeting minutes of the Members' Council, for limited liability companies with two or more members, partnerships; resolutions and decisions of the General Meeting of Shareholders, for joint stock companies, on the change of charter capital.

• List of members of limited liability companies with two or more members; list of members of a partnership, which does not include declarations of capital contributors. The lists must include signatures of members whose capital contribution is changed, signatures of members with unchanged capital contribution are not required.

• Notarized copy of ID card/passport of new member/shareholder contributing capital to the company.

• The investment registration authority's document approving the capital contribution, share purchase or capital contribution purchase of foreign investors or foreign-invested economic organizations in case procedures are required to be carried out to register for capital contribution, purchase of shares or purchase of contributed capital in accordance with the Law on Investment.

Implementation procedure

• Enterprises submit 01 application at the Business Registration Office - Department of Planning and Investment.

• Within 03 working days from the date of receipt of a valid application, the business registration authority shall issue a new enterprise registration certificate to the enterprise.

Case 2: Foreign investors receive transfer of shares/contributing capital in the enterprise

Applications of foreign investors receiving transfer of shares/contributing capital in the enterprise:

• Announce change of enterprise registration information signed by the legal representative of the enterprise.

• List of members of limited liability companies with two or more members; list of members of a partnership, which does not include declarations of capital contributors. The lists must include signatures of members whose capital contribution is changed, signatures of members with unchanged capital contribution are not required.

• Share transfer contract or documents proving the completion of the transfer.

• A copy of the individual's legal papers in case the transferee is an individual; copies of legal papers of organizations, copies of legal papers of individuals for authorized representatives and copies of documents of appointment of authorized representatives in case the transferee is an organization.

• The investment registration authority's document approving the capital contribution, share purchase or capital contribution purchase of foreign investors or foreign-invested economic organizations in case procedures are required to be carried out to register for capital contribution, purchase of shares or purchase of contributed capital in accordance with the Law on Investment.

Implementation procedure:

• Enterprises submit 01 application at the Business Registration Office - Department of Planning and Investment.

• Within 03 working days from the date of receipt of a valid application, the business registration authority shall issue a new business registration certificate to the enterprise.

Step 4: Make changes to investors in the Investment Registration Certificate

Applications of change investor in Investment Registration Certificate

• A document request for adjustment of the investment project.

• Report on the implementation of investment projects up to the time of adjustment.

• Investor's decision on adjustment of investment project for institutional investors.

• Explain or provide documents related to investor adjustment according to regulations, including: Documents on investor's legal status; Documents proving the investor's financial capacity; Documents proving that the investor has contributed capital, purchased shares, contributed capital, etc.

Implementation procedure

• Enterprise submits 01 application at the investment registration certificate-issuing agency.

• Within 10 days from the day on which the valid application is received, the Investment Registration Authority shall amend the Investment Registration Certificate for the investor.

Customers wishing to use the service of changing investors of FDI companies, please contact Siglaw for the fastest and most accurate support from a lawyer.