Procedures for foreign investors to withdraw capital from FDI enterprises

See now: Procedures for foreign investors to withdraw capital from FDI enterprises and cases in which investors are allowed to withdraw capital from joint stock companies and LLCs in this article.

In the process of participating in business investment in enterprises in Vietnam, foreign investors, for many reasons and factors, want to withdraw capital from FDI enterprises. The following article fdiinvietnam.com will share the forms and procedures for foreign investors to carry out this procedure.

What is capital withdrawal from FDI enterprises?

Currently, there is no specific legal regulation defining what capital withdrawal or capital withdrawal from FDI enterprises is. It can be understood simply: Capital withdrawal is when individuals or organizations who are owners, members or shareholders of a company want to recover the money they previously spent on business. 

Similarly, foreign investors withdrawing capital from FDI enterprises means foreign individuals and organizations want to withdraw the capital they previously invested in the company for business purposes.

Cases of capital withdrawal from FDI enterprises

1. Withdrawal of capital from joint stock company

Foreign investors who are shareholders in a joint stock company are not allowed to withdraw their capital contributed in the form of common shares from the company in any form, except in cases where the company or another person buys back the shares.

In case a company has a shareholder withdrawing part or all of the share capital they have contributed contrary to the provisions of this clause, that shareholder and the person with related interests in the company must jointly bear responsibility for the debts and other property obligations of the company within the value of the withdrawn shares and any damages incurred.

2. Withdrawal of capital from a limited liability company with 2 or more members

Foreign investors who are members of a limited liability company with two or more members are not allowed to withdraw their contributed capital from the company in any form, except in the following cases:

• Request the company to buy back the capital contribution: In case that member votes against the resolution or decision of the board of members on certain issues in the company such as: Amending or supplementing the contents of the company charter related to the rights and obligations of members and the board of members; reorganizing the company or in some other cases as prescribed in the company charter;
• Transfer of capital contribution: In this case, a member of a limited liability company with two or more members has the right to transfer part or all of his/her capital contribution to another person. However, this transfer must comply with the following regulations: The company member must offer that capital contribution to the remaining capital contributors in proportion to their capital contribution in the company under the same conditions and may only transfer under the same conditions to the remaining members to non-members if the remaining capital contributors of the company do not purchase or do not purchase all of the capital contribution within the prescribed period of 30 days from the date of offering;
• Donate part or all of the capital contribution or use the capital contribution to pay debts;
• Refund of capital contribution by the company: If the company has been operating continuously for more than 2 years from the date the company is granted a certificate of business registration and the company must ensure full payment of debts and other financial obligations after completing the refund to members, the company will reduce its charter capital by refunding a portion of its capital contribution to members in proportion to their capital contribution in the company’s charter capital. This is also a case that is considered a way for members to withdraw capital from a limited liability company with two or more members.

3. Withdrawal of capital from a single-member LLC

The owner of a single-member LLC who is a foreign investor is only allowed to withdraw capital by transferring part or all of the charter capital to another organization or individual.

In case of withdrawing part or all of the contributed charter capital from the company in a form other than transfer, the company owner and related individuals and organizations must be jointly responsible for the debts and other property obligations of the company. 

Procedures for withdrawing capital from joint stock companies and limited liability companies of foreign investors

As mentioned above, capital withdrawal has many different forms and cases. Below, fdiinvietnam.com will guide foreign investors through capital withdrawal procedures in the case of transferring capital contributions or transferring shares.

Depending on the type of company, the documents for transferring capital from foreign investors to Vietnamese investors are also different. Specifically:

Submit application to Department of Planning and Investment:

After preparing the necessary documents mentioned above, the enterprise submits the application to the Business Registration Office under the Department of Planning & Investment in the province or city where the enterprise is headquartered.

Applications can be submitted directly or online on the National Business Registration Portal.

Within 3 working days from the date of application submission, the Business Registration Office will receive, process the application and respond to the enterprise.

Procedures to be followed after investors complete capital withdrawal procedures

1. Termination of investment project

For enterprises with investment registration certificates, when foreign investors transfer all shares or contributed capital to Vietnamese individuals or organizations, according to the provisions of Point a, Clause 1, Article 48 of the Investment Law 2020, the company must carry out procedures to terminate the investment project.

Foreign investors shall submit their decision to terminate the project within 15 working days from the date of decision to the investment licensing authority.

2. Declare personal income tax and pay personal income tax (if any)

Within 10 days from the date of completion of capital/share transfer procedures, foreign investors who are individuals transferring capital contributions or shares to others must submit a personal income tax declaration to the competent tax authority.

For joint stock companies, individuals transferring must both submit a personal income tax declaration and pay personal income tax of 0.1% on the transfer value.

For LLCs, individuals transferring capital contributions only need to submit personal income tax declarations within 10 days from the date of completion of the transfer (in case the transfer is made at par value).

Some questions about foreign investors’ capital withdrawal procedures