Công văn 4646/BKH-DTNN

Respectfully to: The Department of Planning and Investment of Ho Chi Minh City

During past time, the Ministry of Planning and Investment has received a few of official dispatches of your Department for proposal of guiding on contributing and buying shares of foreign investors in Vietnamese enterprises. For this issue, the Ministry of Planning and Investment has opinions as follows:

1. At the present, the Ministry of Planning and Investment is assuming the prime responsibility for, and coordinating with relevant agencies in research, submission to the Government for promulgation of Decrees amending the Government’s Decree No. 108/2006/ND-CP of September 22, 2006 guiding and detailing a number of articles of the Law on investment (hereinafter referred to as “the Decree No. 108/2006/ND-CP”) and shall try to settle maximally problems, including problems relating to contributing capital and buying shares of foreign investor in Vietnamese enterprises.

2. While the above-mentioned Decrees have not yet promulgated, the Ministry of Planning and Investment suggests your Department to research, apply some provisions on contributing and buying shares of foreign investors in Vietnamese enterprises under direction as follows:

2.1. Regarding dossier

When considering the capital contribution and buying shares of Vietnamese enterprises which conducted by foreign investor, the business registration agencies shall suggest investors to supplement the following documents in dossier of adjustment of business registration content:

- For the foreign investors being organizations: They must have account of investment capital opened at commercial banks in Vietnam;

- For the foreign investors being individuals: They must have an individual account opened at commercial banks in Vietnam;

2.2. Regarding agencies checking the conditions for foreign investors to contribute capital and buy shares

- In according to provisions in clause 1 Article 56 of the Decree No. 108/2006/ND-CP if a foreign investor contributes capital in, buy shares of a Vietnamese enterprise, such enterprise shall do procedure for business registration as prescribed by law on enterprises.

The agencies of business registration shall check conditions of capital contribution, buying shares, which conducted by foreign investors in according to provisions of current law (rate of capital contribution, buying shares; fields/trades, etc).

- In case an owner of a one member limited liability company transfers his/her contribution capital for foreign investors and makes change of type of enterprises, it shall be required to comply with the provision in Article 19 of Decree No. 139/2007/ND-CP.

2.3. Foreign investors contributing capital and buying all charter capital of owners

When a foreign investor conducts capital contribution by buying all charter capital of an owner in a one member limited liability company in order to become new owner of such one member limited liability company, this enterprise shall be required to implement the investment procedures for grant of certificate of investment as prescribed in the Decree No. 108/2006/ND-CP

2.4. A foreign investor enjoys inheritance from the contribution capital in order to become member of a limited liability company

The foreign investor enjoying inheritance must abide by provisions of Vietnamese law and international commitments relating to conditions to accede in market such as rate of equity, trades/fields, etc and implement financial obligations as prescribed by current law relating to receipt of inheritance.

In case receiving inheritance, when the rate of equity in company of foreign investor or fields/trades of enterprise, etc are not suitable with provisions of current law, the agencies of business registration shall guide such enterprise/ investor to do procedures for adjustment of content of business registration in conformity with regulation, in according to the direction in which the devisee is required to sale the company for the Vietnamese investors or remove trades which foreign investors are not been permitted for business participation or remove trades which exceed the allowed rate of charter capital with respect to foreign investors.

Above is opinion of the Ministry of Planning and Investment sent to your Department for reference and reporting to People’s Committee of Ho Chi Minh city for consideration, decision.