See now the procedures for transferring capital contributions and shares of foreign investors in joint stock companies, LLCs and the notes you need to know in this article.
Cases of transfer of shares and capital contributions of foreign investors
When a foreign investor transfers capital contributions or shares owned in an enterprise, the following two cases may occur:
- Foreign investors transfer capital contributions and shares to foreign individuals/organizations;
- Foreign investors transfer capital contributions and shares to Vietnamese individuals/organizations.
Procedures and documents for transferring shares and capital contributions of foreign investors
1. Foreign investors transfer capital contributions and shares to foreign individuals/organizations
1.1 For enterprises with investment registration certificate (direct investment)
For foreign invested enterprises (FDI enterprises) with investment registration certificates, depending on whether the transferee of capital/shares is an individual, an organization outside the company or a member/shareholder in the company, the implementation process will be different.
➤ The transferee is a new foreign investor (not yet contributed capital to the company)
The process of transferring capital and shares takes place in the following 3 steps:
Step 1: Carry out procedures for registering capital contribution and share purchase for new foreign investors;
Registration documents for capital contribution and share purchase for foreign investors include:
- Document of registration of capital contribution/share purchase by foreign investors;
- Capital/share transfer contract between seller and buyer;
- Certified copy of passport of foreign investor being an individual or certified copy of business license of foreign investor being an organization;
- Authorization letter for the person submitting the application at the Department of Planning and Investment of the province/city;
- Certified copy of ID card/CCCD of the authorized person submitting the application.
DOWNLOAD FORM: Application for capital contribution and share purchase by foreign investors.
Enterprises submit their applications directly to the Investment Department/Investment Registration Department of the Department of Planning and Investment of the province/city where the enterprise registers its business.
After receiving and processing the application, the Investment Department will return the result as a Notice of eligibility to purchase shares and capital contributions of foreign investors.
Step 2: Procedures for changing business license
After completing the capital transfer procedure, the FDI enterprise must carry out the procedure to change the owner/member/shareholder contributing capital at the Department of Planning and Investment.
Documents for changing owners/members and shareholders of FDI enterprises include:
- Notice of change of owner or change of members/shareholders contributing capital;
- Capital transfer contract between seller and buyer;
- Minutes of contract liquidation;
- List of members/shareholders contributing capital after change;
- List of foreign investors & list of representatives of respective investors;
- Authorization letter for the person submitting the application at the Department of Planning and Investment of the province/city;
- Certified copy of ID card/CCCD of the authorized person submitting the application.
DOWNLOAD FORM: Profile of change of owner, members, shareholders of FDI enterprise.
After preparing all documents, the enterprise submits the application directly to the Business Registration Office (under the Department of Planning and Investment) or submits it online on the National Business Registration Information Portal.
Within 3 – 5 days from the date of receiving the application, the Business Registration Office will check the validity of the application and issue a new business license to the FDI enterprise.
Note:
Changing the company owner (when transferring 100% of the capital of a limited liability company) or converting the company type from a joint stock company to a limited liability company or from 1 member to 2 members (when transferring a part of the capital contribution) is entirely possible.
You can refer to more information in some of the following articles of fdiinvietnam.com.
See also:
- Procedures for converting a 1-member LLC into a 2-member LLC;
- Procedures for converting a 2-member LLC into a 1-member LLC;
- Procedures for transferring capital contributions to foreigners.
Step 3: Procedures for adjusting investment certificate
The dossier for adjusting the investment certificate includes:
- Application for adjustment of investment project;
- Report on investment project implementation status;
- Decision on changing investment certificate;
- Documents on transfer of shares and capital contributions;
- Certified copy of new business license (result in step 2);
- Original investment license;
- Certified copy of investor’s documents: Passport (if individual) or notarized translation business license (if organization) with passport of authorized representative.
DOWNLOAD FORM: Application for adjusting investment certificate due to capital transfer.
After preparing all documents, the enterprise submits them directly to the Investment Department – Department of Planning and Investment of the province/city where the business is registered.
After about 15 working days from the date of valid application, the enterprise will be re-issued a new investment certificate.
➤ The transferee is a former foreign investor (who has contributed capital)
In this case, the enterprise only needs to adjust the investment certificate first and then change the business license (Perform steps 2 and 3 as for the transfer of a new investor).
1.2 For enterprises without investment certificates (indirect investment)
Enterprises shall first apply for a Notice of eligibility to purchase shares and capital contributions from foreign investors (i.e. register to contribute capital to investors), then carry out procedures to register for changes to the business license (perform steps 1 and 2 as above).
2. Foreign investors transfer capital contributions and shares to Vietnamese individuals/organizations
Enterprises only need to carry out procedures to change business licenses at the Business Registration Office – Department of Planning and Investment to be re-issued a new business license, without having to carry out procedures with the investment agency.
Documents for changing business license due to capital transfer include:
- Notice of change of owner or change of members/shareholders contributing capital;
- Contract for transfer of capital contribution/shares;
- Minutes of contract liquidation;
- List of members/shareholders contributing capital after change;
- Authorization letter for the person submitting the application at the Department of Planning and Investment of the province/city;
- Certified copy of ID card/CCCD of the authorized person submitting the application.
DOWNLOAD FORM: Application for changing business license due to capital transfer.
Notes on declaring and paying personal income tax from capital transfer
Within 10 days after signing the transfer contract, the transferor must submit a personal income tax return (for individual investors) or a corporate income tax return (if the foreign investor is an organization) in accordance with the Law.
For joint stock companies, the party transferring shares will have to pay 0.1% personal income tax (for individual investors) or 20% corporate income tax (for institutional investors) on the transfer value.
Some questions about the transfer of capital contributions of foreign investors
1. What are the cases of capital transfer by foreigners?
There are 2 cases:
- Foreign investors transfer capital to foreign individuals or organizations;
- Foreign investors transfer capital to Vietnamese individuals or organizations.
2. After transferring capital, do investors need to do any other procedures?
Investors transferring capital and shares (transferor) must fulfill their obligations to submit personal income tax declaration or corporate income tax declaration and pay taxes according to the Law within 10 days from the date of signing the transfer contract.
3. What procedures are required when a foreign investor transfers shares/capital contributions to another foreign individual who is not a company member?
Businesses need to perform the following 3 steps:
- Step 1: Register capital contribution and share purchase procedures for new foreign investors;
- Step 2: Procedures for changing business license;
- Step 3: Procedures for changing investment certificate.
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