Purchase of share or portion of capital contribution in a Vietnamese company
Among investment forms in Vietnam, the purchase of shares/stakes is the most popular one. Thanks to available customers, human resources and facilities, investors will not spend too much time and effort in entering the Vietnam market. In this form, the investors must carry out the procedures for registering the purchase of share /stakes in the target enterprises with the investment licensing agency.
How to register to buy shares/stakes? What are the conditions for registering the purchase of shares/stakes? Which documents should be prepared? Investors always have problems when they answer these questions.
Accordingly, Bizlawyer would like to advise potential investors on the procedure for and legal problems relating to the purchase of shares/stakes.
Conditions for registering the purchase of shares/stakes
According to Article 25 of 2014 Law on Investment, conditions for purchasing shares or stakes of business organizations are as follows:
- Foreign investors shall purchase shares or stakes of a business organization in the following manners:
- Purchasing shares of joint-stock companies from the companies or their shareholders;
- Purchasing capital contributions to limited liability companies by their members and become members of limited liability companies;
- Purchasing capital contributions to partnerships by partners and become partners;
- Purchasing capital contributions to business organizations other than those mentioned in Points a, b, and c of this Clause from their members
- Conditions of charter capital ownership ratio for foreign investors corresponding to each investment field
- Conditions on investment form, the scope of activities, Vietnamese partners participating in the implementation of investment activities and other conditions under the provisions of international treaties to which Vietnam is a member.
Procedures for purchasing shares or stakes to business organizations
The person in charge of performing the procedures
The investors shall perform the procedures for registration of purchasing shares/stakes in an investment licensing authority.
Licensing authority: Provincial Department of Planning and Investment (“DPI”)
Step 1: Applying the documents to Competent authority
The documents include:
- A written for registration of capital contribution or purchase of shares/capital contributions, which specifies information about the business organization to which investment is made; the holding of the foreign investor after investing;
- A copy of the ID card or passport (if the investor is an individual); a copy of the Certificate of establishment or an equivalent paper that certifies the legal status of the investor (if the investor is an organization).
Note: Valid copy means a copy extracted from the master register or a copy authenticated by a competent authority or a copy that has been compared with the original, or a copy printed from the national database about residents, enterprise registration, and investment.
Step 2: Receive and check the completion of the documents
The DPI receives and checks the documents; if the documents are complete, it will receive them and issue a Receipt to the investor; If the documents are not complete, the officer of the DPI will guide the investor to supplement and complete the documents.
Step 3: Process the applications
Within 15 days from the date of receiving the valid applications, the DPI shall consider the fulfillment of investment conditions for foreign investors and notify the investor that the applications meet the conditions or not.
Step 4: Receive results
The investor will follow the Receipt to receive the results at the DPI.
Time limit for processing: Within 15 days from the date of receiving the valid applications
To have a great preparation for a long-term investment project, investors should research on legal problems and procedures relating to the purchase of shares or stakes.