Depending on whether the enterprise is 100% Vietnamese charter capital or foreign invested, the conditions and documents for transferring shares and capital contributions will be different. Please read this article to better understand the issues related to transferring capital and shares to foreigners.
Conditions for transferring capital contributions and shares to foreigners
Transfer of capital contributions and shares to foreigners will not be based on the type of enterprise, whether it is a joint stock company, a single-member LLC or a LLC with two or more members, but will be divided into: Vietnamese enterprises and enterprises with foreign elements.
► For Vietnamese businesses
If a 100% Vietnamese-owned enterprise wants to transfer capital contributions and shares to foreign investors, it must be based on whether there are any regulations on transferring capital and shares to foreigners in that business line and what is the maximum percentage of capital contributions that can be transferred.
If the enterprise operates in an unconditional industry and the transfer rate is less than 51%: The enterprise only needs to carry out procedures to change the business registration certificate.
In other cases, when members and shareholders transfer capital and shares to foreigners, they must complete procedures to register capital contribution, purchase of shares and capital contributions at the Department of Planning and Investment. Then, they can complete procedures to change the business registration certificate (change of owner/member/shareholder).
► For businesses with foreign elements
Foreign-invested enterprises here can be understood as Vietnamese enterprises with foreign capital contributions or other foreign elements such as a foreign legal representative.
Similar to Vietnamese enterprises, when transferring capital contributions and shares to foreigners, enterprises with foreign elements will also have to consider the business lines and transfer ratio, because there are some industries that do not allow foreigners to register to operate and some industries will limit the percentage of capital contribution.
For example:
>> Tourism industry: Enterprises must have at least 10% capital contributed by Vietnamese people;
>> Freight transport industry: The maximum foreign capital contribution ratio is 49%.
In this case, when a member/shareholder (Vietnamese or foreigner) wants to transfer capital contribution or shares to another foreigner, the enterprise must complete the procedure to change the investor on the investment certificate. Then complete the procedure to change the member/shareholder on the business registration certificate.
Procedures and documents when transferring capital contributions and shares
Vietnamese enterprises or enterprises with foreign elements will have different procedures and documents. fdiinvietnam.com will inform each case as follows:
► For Vietnamese businesses
Step 1: Carry out procedures for registering capital contribution, buying shares, capital contributions, documents include:
- Registration document for capital contribution/share purchase/capital contribution, sample file;
- Copy of ID card/CCCD/passport (if the investor is an individual);
- Copy of business registration certificate (if the investor is an organization).
Step 2: Carry out procedures to change the business registration certificate, the documents include:
- Notice of change of business registration content;
- Decision of the owner/chairman of the board of members/chairman of the board of directors;
- Minutes of meeting of board of members/board of directors.
Note:
In step 1, the institutional investor can provide in lieu of the certificate of establishment another document/paper confirming the legal status of the enterprise.
In step 2, the above documents are usually required, however, you need to note the following 2 issues:
>> Depending on the type of company, the profile will add 1-2 more information, you can see details in this article.
>> If the transfer of capital contributions and shares affects the number of members, you need to carry out procedures to convert the company type. In that case, the documents to be prepared in step 2 include:
- Company charter;
- Application for business registration;
- Notice of change of business registration content;
- Minutes of meeting of board of members/board of directors;
- Decision of the owner/chairman of the board of members/chairman of the board of directors.
As shared, if the transfer rate is below 51% and the industry has no regulations on transfer conditions, you only need to perform step 2.
► For businesses with foreign elements
Step 1: Carry out procedures to change investors on the investment certificate, the documents include:
- Document requesting adjustment of investment project;
- Explanation of meeting the conditions for purchasing and selling goods and activities directly related to purchasing and selling goods;
- Document confirming the account balance is greater than or equal to the investor’s investment capital;
- Notarized copy of ID card/CCCD/passport (for individuals);
- Consular legalization of business registration (for foreign organizations);
- Financial statements for 2 years (for foreign organizations);
- Authorization document to represent capital contribution (for foreign organizations).
Step 2: Carry out the procedure to change the business registration certificate, the documents to be prepared are similar to those for Vietnamese enterprises.
Download form HERE .
Place to receive documents: Business Registration Office of Department of Planning and Investment.
Time to return results: Within 25 – 30 working days from the date of application submission.
Notes when transferring capital contributions and shares to foreigners
1. Within 10 days from the date of transfer, Vietnamese members or shareholders transferring capital contributions to foreigners must submit personal income tax declarations to the competent tax authority.
2. 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.
3. For LLCs, the transferring individual only needs to submit a personal income tax return within 10 days from the date of completion of the transfer.
Frequently Asked Questions
What conditions are required when transferring shares and capital to foreign investors?
You need to pay attention to the following issues: Determine whether the enterprise has foreign elements or 100% Vietnamese capital because it will affect the documents and procedures when making the transfer; Consider whether the industry has regulations for foreigners to register to operate and what is the capital transfer ratio according to the regulations of each industry, for example, the freight transport industry stipulates that foreigners can contribute a maximum of 49% of capital.
What are the documents required when transferring capital and shares to a foreign invested company?
For companies with foreign elements, you need to do the procedure to change the investor on the investment certificate first, then do the procedure to change on the business license. Details of the 2 steps can be found here.
What types of documents are required when transferring capital and shares to a company with 100% Vietnamese charter capital?
You need to perform 2 steps:
Step 1 – Register to buy shares, capital contributions with the following documents: Registration document for capital contribution/purchase of shares/capital contributions; copy of ID card/CCCD/passport (if the investor is an individual) or copy of business registration certificate (if the investor is an organization).
Step 2 – Register to change business registration certificate, depending on the type of enterprise, the documents will be different, details here.
What is a foreign-invested enterprise?
A foreign-invested enterprise or a foreign-invested enterprise can be a joint venture enterprise with foreign capital contributions or other foreign elements such as a foreign legal representative.
Where to submit procedures for transferring shares and capital contributions to foreigners?
After preparing all the transfer documents, you submit them to the Business Registration Office of the Department of Planning and Investment. Within 25-30 working days from the date of submission, the Department will notify you of the results.
Call us at 0978 578 866 (North) , 033 9962 333 (Central) or 033 9962 333 (South) for support.