Procedure for increasing/decreasing investment capital
The investment capital recorded in the Investment Registration Certificate (“IRC”) includes the investor’s equity (corresponding to the charter capital of the business registration certificate) and mobilized capital (borrowed capital). In the stage of project implementation, the investor can fully increase capital to expand the project scale, expand its business – production or decrease capital according to the actual situation of the project. At that time, the investor needs to perform the procedure for adjusting the investment capital recorded in the IRC in accordance with Vietnamese law.
The following article will help investors grasp the procedure for adjusting investment capital and provide related notes when implementing this procedure.
1. Person in charge
Investor performs the procedures for adjusting the IRC, Business Registration Certificate (“BRC”) at a competent licensing authority.
2. Licensing authority
Authority in charge of promulgating final decision: Provincial People’s Committee will make an adjustment to an investment policy decision (“IPD”) (if the project subject to investment policy decision)
Authority in charge of performing administrative procedures: Provincial Department of Planning and Investment, or Management Board of an industrial park, a processing zone or a high-tech park (hereinafter referred to as “Investment registration body”)
3. Procedure for increasing/decreasing investment capital
Step 1: Submit applications for amendment of IRC
The investor submits 01 (one) set of applications to the investment registration body by itself or by an authorized person.
A set of applications for amendment to an IRC includes the following documents:
- A written request for adjusting investment project;
- A report on the implementation of the investment project to the time of adjusting;
- An explanation statement for the amendment. In this statement, the investor explains the financial capacity, the investment capital source to ensure the increase of capital or explanation of the feasibility of project implementation when decreasing capital. The investor can attach documents to this statement for proofing
- The investor’s decision on adjusting the investment project (increase/decrease of investment capital);
- In case of capital increase): Documents certifying the investor’s capital contribution (in case the investor contributes additional capital); financial commitment of the parent company; financial institutions’ commitment to financial support; guarantee of financial capacity of the investor (in case of capital mobilization)
Step 2: Receive and check the applications
The investment registration body shall receive and check the applications; if the applications are complete and valid, it will receive the file and issue a receipt to the investor; If the applications are incomplete, it will guide the investor to supplement and complete the applications.
Step 3: Examine and verify the applications
- In case the project is not subject to the decision on investment policy: Within 10 working days from the date of receiving valid applications, the investment registration body shall adjust the IRC for the investor.
- If the project is subject to the decision on investment policy, the procedures will be taken longer as follows:
Within 3 working days after receiving valid applications, the DPI shall send the applications to the competent state body for commenting on the amendment content;
Within 10 working days after receiving the proposal of the DPI, the bodies receiving the applications above must send their opinions for the amendment contents under their management competence;
Within 5 working days after receiving the opinions of the above-mentioned bodies, the investment registration body shall make a report on verification of investment project amendment contents and submit it to the provincial People’s Committee;
Within 05 working days from the date of receiving the verification report of the investment registration body, the provincial People’s Committee decides to adjust the decision on investment policy and send to the investment registration body;
Within 03 working days from the date of receiving the investment policy adjustment decision of the provincial People’s Committee. Based on the written decision on investment policy adjustment by the provincial People’s Committee, the investment registration body shall adjust the investment certificate for the investor.
Step 4: Receive results
The investor shall receive the result based on the appointment date on the Receipt of applications at the investment registration body.
Results: an amended IRC
Step 5: Adjust BRC
After being granted an amended IRC, the investor shall submit a set of applications for the charter capital amendment on BRC at the business registration body. Within 5 working days after receiving complete and valid applications, the business registration body shall grant an amended BRC.
4. A few consideration when increasing or decreasing investment capital
– For projects required an investment policy decision, when the adjustment of investment projects relates to the increase or decrease of investment capital by more than 10% of the total investment capital, the procedures for granting an investment policy decision must be carried out before adjusting IRC.
– In case the investor’s proposal to adjust the content of an IRC will result in its investment project falling in within the requirement of an investment policy decision, the investment registration body shall perform the procedures for the issuance of investment policy decision before adjusting IRC
– The investor must prove its financial situation for the proportion of investment capital registered to increase.
– The registered capital for implementing the project in the current IRC must be fully contributed in accordance with the law.
– In case the adjustment of investment capital leads to a change of charter capital (contributed capital of the investor), the investor needs to perform a procedure for changing the charter capital on the BRC.
The legal procedures relating to the decrease or increase of investment capital, are always complex and required several information and documents. Should our clients are interested in or have the demand for decreasing or increasing investment capital, please contact us for more guidance.