Investment capital account
Investment capital account of investors in Viet Nam
In accordance with Viet Nam laws, all transactions related to investment activities of foreign investors in Viet Nam must be performed through an investment capital account opened at an permissible bank. HNLaw & Partners would like to guide customers as follows:
I. Legal base
Circular 06/2019/TT-NHNN, which guides on foreign exchange management to the direct investment activities in Viet Nam
1. Direct investment from abroad to Viet Nam
a. “Direct foreign-owned capital enterprises” includes:
- Enterprises established under the form of investment in the establishment of economic organizations, where foreign investors are members or shareholders, must carry out procedures for the grant of Investment Registration Certificates according to the provisions of law on investment;
- Enterprises that do not fall into the above cases have foreign investors owning 51% or more of their charter capital, including:
+ Enterprises which have foreign investors contributing capital, purchasing shares, part of capital to enterprises (operating in conditional or non-conditional investment business lines which applicable to foreign investors) leading to that foreign investors own 51% or more of charter capital of the enterprises;
+ Enterprises which are established after separated, incorporated, consolidated, leading to that foreign investors own 51% or more of charter capital of the enterprises;
+ New enterprises established under the provisions of specialized laws
- Project enterprises established by foreign investors to execute PPP project under the provisions of law on investment
b. Direct investment capital account
Direct investment capital account is an account which pays in foreign currency or Vietnam dong, opened by direct-foreign investment or direct foreign-owned capital enterprises at an permissible bank to execute transactions related to direct investment activities in Viet Nam. “permissible banks” includes trading banks, branch of foreign banks allowed to trade, provide foreign currency services under the provisions of laws.
The opening of bank account is stipulated in Article 5 Circular 06/2019/TT-NHNN as follows:
“1. Objects that open and use direct investment capital includes:”
a) Direct foreign-owned capital enterprises;
b) Foreign investors participating in BCC contract, foreign investors directly executing PPP projects in case not establishing a project enterprise (hereafter referred as PPP project- direct-executing foreign investors)
2. Objects open direct investment capital accounts following these provisions:
a) Must open foreign currency direct investment capital accounts at 01 (one) bank permitted to carry out legal collection and payment transactions in foreign currencies related to direct foreign investment activities in Viet Nam;
b) Corresponding to the foreign currency for investment capital contribution, only 01 (one) direct investment account in such foreign currency may be opened at only 01 (one) permissible banks;
c) In case of doing investment in Vietnam Dong, 01 (one) direct investment account in Vietnam dong could be opened at the permission bank where foreign direct investment account is opened in foreign currency to carry out legal collection and payment transactions in Vietnam Dong related to foreign direct investment activities in Viet Nam;
d) In case foreign investors participate in many BCC contracts or directly execute many PPP projects, foreign investors must open separate direct investment capital accounts corresponding to each BCC contract or PPP project.”
Therefore, the general principle is the capital contribution in cash of foreign and Viet Nam investors in direct foreign-owned capital enterprises must be executed by transferring to direct investment capital account. To executing direct investment activities in Viet Nam, direct foreign-owned capital enterprises and foreign investors participating in business cooperation contract are allowed to open foreign direct investment accounts in foreign currencies and Vietnam dong at an permissible and separate bank if there are many projects.
Above are the consulting contents on “Foreign direct investment account of foreign investors in Viet Nam” of HNLaw & Partners. Customer who has any question or needs to use legal services please directly contact Company for detailed consultation and best support.
For more details please contact:
HNLAW & PARTNERS LAW FIRM
Address: DBS Building, N028, Lot 31, Commercial Services and Housing Area in Ha Tri, Ha
Tri Ward, Ha Dong, Hanoi.