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Legal advice on capital contribution, purchasing shares for foreign investors

Nowadays, Vietnam is on the way to expanding its developed market, which has attracted investors from countries all over the world. Many foreign investors have chosen to invest in capital contribution, purchasing shares to the company with 100% Vietnam capital or register to contribute capital, purchasing shares to foreign-invested companies in Vietnam.

The conditions about capital contribution, purchasing share are governed primarily by two laws namely the Law on Enterprises and the Law on Investment. According to the current law, foreign investors have the right to contribute capital or purchase shares in Vietnamese companies. The following article will provide some regulations on foreign investors with capital contribution, buying shares or capital contribution in enterprises in Vietnam.

Forms of capital contribution, share purchase, capital contribution purchase by foreign investors:

  1. Buying shares in the initial issue or additional shares of a joint stock company;
  2. Capital contribution to limited liability companies and partnerships;
  3. Purchase of shares in a joint stock company from a company or a shareholder;
  4. Purchase of equity interests from members of a limited liability company to become a member of a limited liability company;
  5. Capital contribution to Vietnamese companies in other forms

When foreign investors contribute capitals, buy shares, buy capital contributions in Vietnam, there might be two cases to carry out the procedures for registration:

Case 1: Foreign investors shall carry out the procedures for registration of capital contribution, share purchase, or capital contribution purchase of an economic organization before changing members or shareholders if falling into one of the following cases:

a) Contribution of capital, purchase of shares, purchase of capital contributions increases the ownership ratio of foreign investors in economic organizations conducting business in sectors or trades with conditional market access for domestic investors. out;

b) Contribution of capital, purchase of shares, purchase of capital contribution leads to foreign investors, business organizations specified at Points a, b and c, Clause 1, Article 23 of this Law holding more than 50% of capital. charter of an economic organization in the following cases: increasing the percentage of foreign investors of ownership in charter capital from less than or equal to 50% to over 50%; increase the proportion of foreign investors of ownership in charter capital when foreign investors already own more than 50% of charter capital in economic organizations;

c) Foreign investors contribute capital, purchase shares, purchase capital contributions from economic organizations having certificates of land use rights on islands, in border communes, wards or towns; coastal communes, wards and towns; other areas affecting national defense and security.

Case 2: An investor not falling into the case specified in Clause 2 of this Article shall carry out procedures for change of shareholders or members according to relevant provisions of law when contributing capital, purchasing shares or buying capital contributions of the group. economic function. Where there is a need to register the capital contribution, share purchase, or capital contribution purchase of an economic organization, the investor shall comply with the provisions of Clause 2 of this Article.

National Assembly in Vietnam passed Law on Enterprises and Law on Investment and both of these Laws take effect on January 1, 2021. Therefore, it makes doing business in Vietnam become more difficult than before. You need to find out a prestigious law firm to be consulted on the most effective procedures and conditions when contributing capital or purchasing shares to Vietnamese companies.

To have a great preparation for a long-term investment project, investors should research legal problems and procedures relating to the purchase of shares or stakes. Apolo Lawyers Law Firm will be the most accurate choice to help you in consulting and operating the procedures as well as the dossiers. The time and cost will be shortened than before but still comply with legal regulations. If you are concerned about investment in Vietnam and have any questions about capital contribution, share or capital contributions purchase, please feel free to contact Apolo Lawyers Law Firm to be supported and to get some legal advice.

For further information, contact us:

Apolo Lawyers - Solicitors & Litigators

Address: 10th Floor, PaxSky Building, No. 51 Nguyen Cu Trinh Street, District 1, Ho Chi Minh City

Binh Thanh Branch

Address: 9th/F, Tower K&M Building, 33 Ung Van Khiem St., Binh Thanh Dist., HCM City

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Tel: (028) 66.701.709 / (028) 35.059.349

Mobile 1/ Whatsapp 1: 0939.486.086

Mobile 2/ Whatsapp 2: 0908.043.086

Email: contact@apolo.com.vn

Website: apololawyers.com

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