How does Vietnamese law govern the remittance of capital for investment project implementation? What are the safe and lawful methods of capital remittance? Foreign investors are very interested in and paid their attention to these questions when considering forms of inward investment in Vietnam.

Circular No. 06/2019/TT-NHNN provides some conditions/regulations on foreign exchange management for foreign direct investment in Vietnam, among which, all transactions relating to foreign direct investment activities in Vietnam must be conducted via a direct investment capital account.

When does a foreign investor can remit investment capital to Vietnam?  Which are the forms and assets of capital remittance? This article is about to address these questions.

1. What is the investment capital?

• According to Article 3.18, Law on investment 2014, “Capital means money and other assets used in order to conduct business investment activities.” 
• Accordingly, investors can use both money and assets to carry out investment activities. However, Bizlawyer will mainly mention the remittance of investment capital in money in this article.
• The currency used in investment activities is a foreign currency or Vietnam dong. Accordingly, foreign investors must open an account of direct investment capital in a foreign currency or in Vietnam dong with a bank.

2. What are the forms of the remittance of investment capital?

• According to Article 4.3 Circular No: 06/2019/TT-NHNN, “The monetary capital contribution by a foreign investor […] must be remitted to the direct investment account opened by such foreign investor” 
• “A direct investment account” means a foreign currency account or a Vietnam dong account opened by a FDI enterprise or a foreign investor with an authorized bank to perform transactions regarding foreign direct investment in Vietnam (according to Article 3.5 Circular No. 06/2019/TT-NHNN).

The following foreign-invested enterprises are permitted to open and use a direct investment account

• Any enterprise established in form of investment of establishing a business organization whose members or shareholders are foreign investors, and granted an investment registration certificate in accordance with the law on investment.
• Any enterprise other than those as prescribed above in which foreign investors hold at least 51% of charter capital.
• Project enterprises established by foreign investors to implement PPP projects in accordance with the law on investment.
• Foreign investors participating in BCC, or implementing PPP projects without establishing project enterprises

Do you know the necessary procedures for profit repatriation from Vietnam after having a successful investment activity in Vietnam?

3. Time for remittance of investment capital

A foreign investor can remit capital either at the stage of investment preparation (before the investment project is licensed by the competent agency) or after the investment project is licensed by the competent agency.

• At the stage of investment preparation, foreign investors are permitted to remit money from abroad, or from a payment account in foreign currencies or in Vietnam dong opened by such foreign investors with an authorized bank in Vietnam to pay lawful expenses during the stage of investment preparation in Vietnam.

– If the investment project of the foreign investor is licensed, the investment capital of such foreign investor can be fully or partly either (i) converted into equity, or (ii) converted into foreign loan capital of FDI enterprises.

– If the investment project of the foreign investor is not licensed, the money will be returned to the foreign investors in foreign currency or Vietnamese dong, excluding legal expenditures on such stage in Vietnam.

Within the time limit specified in the BCC (in case of investment in the form of BCC).

If you do not know the necessary procedures for applying for an investment project in Vietnam, you can refer to our other articles relating to the investment sector.

• After the investment project of the foreign investor is licensed, the foreign investor must/is obliged to contribute its investment capital fully and timely as committed after finalizing all capital contributed at the stage of investment preparation. In particular:

– Within 90 days from the date of being granted Enterprise Registration Certificate (in case of establishment of a new economic organization).

– After being granted a notice of the foreign investor’s eligibility to contribute capital or purchase shares/stakes (in case of investment in the form of capital contribution, share purchase).

Conclusion

Investment activity has been always challenging and interesting for foreign investors. Before breaking into the Vietnam market, foreign investors should have clear and accurate knowledge in terms of the legal field. Bizlawyer is always ready to support the foreign investors who have the demand for implementing an investment project in Vietnam!

Bizlawyer is providing legal services relating to the remittance of investment capital. Should clients have any question or are interested in our legal service, please contact us via our email: Info@bizlawyer.vn or Hotline Call: +8486.888.1900 for timely advice and support.