Many companies register billions of dong in charter capital at incorporation, fail to pay it in within the committed 90 days, and then forget the legal duty to adjust that figure on their Enterprise Registration Certificate (ERC). The result: the company carries an inflated charter capital for years, creating exposure when partners, banks or regulators review its records. Increasing or decreasing charter capital looks straightforward, but each company type has its own deadlines and conditions, and it is easy to apply the wrong ones.
Your company has just decided to raise additional capital to expand, but what does the dossier need to include, where is it filed, and how quickly must it be completed? If you want to withdraw part of the charter capital to restructure cash flow, can the company do so immediately, or must it first meet statutory conditions? And if a member or shareholder has not paid in their committed capital in full, who bears responsibility when the company incurs debt? These are the questions that leave many business owners, foreign-invested companies especially, uncertain whenever charter capital needs to change. This article breaks down the current legal framework by company type, the specific registration procedure, and the practical mistakes to avoid.
Legal framework for increasing and decreasing charter capital by company type
Charter capital is one of the mandatory particulars on every company's Enterprise Registration Certificate. Each time charter capital changes, the company must update this information with the business registration authority, not merely record it internally. The 2020 Law on Enterprises sets different conditions for increasing and decreasing capital depending on company type, and part of this framework was amended effective 1 July 2025.
Multi-member limited liability companies
Under Article 68 of the 2020 Law on Enterprises, a multi-member limited liability company may increase its charter capital in two ways: increasing the existing members' capital contributions, or admitting new members. When existing members' contributions are increased, the additional amount is allocated among members in proportion to their current ownership ratio, unless the members agree otherwise.
As for decreasing capital, the company may only return part of a member's contribution if it has operated continuously for two years or more from the date of enterprise registration and still ensures full payment of debts and other property obligations after the return. The company may also decrease capital by repurchasing a member's capital contribution at that member's request, or where a member has failed to contribute in full and on time.
Single-member limited liability companies
For a single-member limited liability company, Article 87 provides that the owner increases charter capital either by contributing additional capital or by raising capital from other contributors. If capital is raised from other contributors, the company must convert into a multi-member limited liability company or a joint stock company, since a single-member LLC by definition has only one owner.
The conditions for a single-member LLC to decrease capital mirror those of a multi-member LLC: the company must have operated continuously for two years or more, and must ensure full payment of debts after returning capital to the owner.
Joint stock companies
A joint stock company calculates charter capital differently: it is the total par value of all shares sold, so increasing capital is usually tied to offering additional shares. The rules on decreasing capital for joint stock companies under Article 112 were recently amended by the National Assembly, effective 1 July 2025, and this is a point where it is very easy to rely on outdated material.
Before the amendment, a joint stock company seeking to return capital to shareholders also had to prove it had operated "continuously" for two years or more, the same as the condition for limited liability companies. From 1 July 2025, the new rule drops the word "continuously" and allows any period during which the company registered a temporary suspension of business to be excluded when counting the two-year mark.
This means a joint stock company that has previously suspended operations for a period may now qualify to decrease capital by returning funds to shareholders sooner than before, whereas limited liability companies applying Article 68 or Article 87 remain subject to the unamended "continuous" requirement. Besides returning capital pro rata, a joint stock company may also decrease capital by repurchasing shares at a shareholder's request or by the company's own decision, where a shareholder fails to pay in full for registered shares, or by redeeming capital from shareholders holding redeemable preference shares under the conditions stated on the share certificate, a ground newly added from 1 July 2025.
| Company type | Legal basis | Condition for decreasing capital by return |
|---|---|---|
| Multi-member limited liability company | Article 68, Law on Enterprises 2020 | Operated continuously for 2 years or more |
| Single-member limited liability company | Article 87, Law on Enterprises 2020 | Operated continuously for 2 years or more |
| Joint stock company | Article 112, Law on Enterprises 2020, as amended by Law 76/2025/QH15 | Operated for 2 years or more, excluding any temporary suspension period; no "continuous" requirement |
Procedure and dossier for registering a change in charter capital with the business registration authority
Whether increasing or decreasing, every change in charter capital must be re-registered with the provincial Business Registration Authority where the company's head office is located; it is not an internal matter the company can simply decide on its own. The specific procedure is set out in the 2020 Law on Enterprises and Decree No. 168/2025/ND-CP on enterprise registration, effective from 1 July 2025, which replaced the earlier decree.
- The company holds a meeting and issues a resolution or decision on increasing or decreasing charter capital: a decision of the owner for a single-member LLC, of the Members' Council for a multi-member LLC, or of the General Meeting of Shareholders for a joint stock company.
- Prepare the dossier for registering the change in enterprise registration content: an application for registration of the change, a copy of the above resolution or decision, minutes of the meeting for a multi-member LLC, and, depending on the case, documents proving that the additional capital contribution or share purchase has been paid in full, or the most recent financial statements if capital is being decreased by way of a return of capital or repurchase of a capital contribution.
- File the dossier with the provincial Business Registration Authority where the company's head office is located, within 10 days from the date the increase or decrease in charter capital is completed.
- The Business Registration Authority reviews the dossier within 3 working days and issues a new Enterprise Registration Certificate recording the revised charter capital.
If the capital increase includes a contribution from a foreign investor that is subject to registration under the Law on Investment, the dossier must also include the investment registration authority's written approval of that capital contribution, share purchase, or purchase of a capital contribution. This is a step foreign-invested companies commonly overlook, and it is a separate procedure outside the scope of this article.
Risks and common mistakes in practice when increasing or decreasing charter capital
The most common mistake DEDICA encounters is a company registering a high charter capital at incorporation to impress partners, but failing to pay it in within the committed 90 days. The 2020 Law on Enterprises is clear: once the 90 days lapse without full payment, the company is legally required, not merely advised, to register an adjustment of charter capital to match the amount actually contributed, within the following 30 days. This rule applies to all three company types discussed above.
Many companies skip this step for years. As a result, the charter capital on the Enterprise Registration Certificate no longer reflects the capital actually paid in, creating risk when a bank appraises a loan application, when a counterparty conducts due diligence ahead of an M&A deal, or when regulators inspect the company. Members who have not contributed in full also remain liable, to the extent of their committed contribution, for the company's financial obligations arising before the date the company completes the adjustment.
The second mistake is applying the wrong condition across company types, particularly when relying on material written before 1 July 2025. As explained above, a joint stock company is no longer required to show "continuous" operation when returning capital to shareholders and may exclude any period of temporary business suspension, while a limited liability company remains subject to the unchanged "continuous" requirement. Confusing the two means the dossier is prepared on the wrong legal basis and has to be redone.
The third mistake concerns the financial obligation after a capital decrease. The law only allows a company to return capital to members or shareholders if it still ensures full payment of debts and other property obligations. Returning capital in breach of this condition means the member who received it must return the money or property received to the company, and jointly bear liability for the company's debts and other property obligations to the extent of the amount not yet returned.
The fourth mistake is filing the registration for a change in charter capital late, past the 10-day deadline from the date the increase or decrease is completed, which can expose the company to administrative penalties for enterprise registration violations. For foreign-invested companies, increasing charter capital often also triggers a duty to adjust the Investment Registration Certificate, or to carry out capital contribution or share purchase registration under the Law on Investment, before filing the charter capital change dossier. Missing this step causes the business registration authority to reject the dossier for lack of the investment registration authority's approval.
DEDICA's role in handling charter capital change procedures
For companies without an in-house legal function, tracking the 90-day capital contribution deadline, the mandatory 30-day adjustment window, and the 10-day registration deadline is easy to miss amid the day-to-day demands of running a business. Under its ongoing legal advisory service, DEDICA tracks these deadlines for clients, prepares the dossier correctly for each company type, and deals directly with the business registration authority, including, for foreign-invested companies, handling the related Investment Registration Certificate procedure at the same time, with bilingual English and Chinese support where needed.
Every dossier and piece of advice is reviewed by a senior DEDICA lawyer before it reaches the client, helping companies avoid exactly the common mistakes described above without having to maintain a costly in-house legal department.
Conclusion
Increasing or decreasing charter capital involves four steps: issuing an internal resolution or decision by the body with authority under the company type, preparing the dossier under Decree No. 168/2025/ND-CP, filing it with the provincial Business Registration Authority within 10 days of completing the change, and receiving a new Enterprise Registration Certificate within 3 working days. Three points deserve particular attention: if a member or shareholder has not paid in charter capital in full after 90 days, the company must register a corresponding decrease within the following 30 days, and this cannot be left unresolved; the "two years of continuous operation" condition for returning capital now applies only to limited liability companies, since joint stock companies have, from 1 July 2025, been allowed to exclude any period of temporary business suspension; and in every case of decreasing capital, the company must still be able to pay its debts in full after the return, or the member who received the funds must return them and bear joint liability. If your company is about to change its charter capital, review the correct legal basis for your company type before the resolution meeting, to avoid having to redo the dossier from scratch.
DEDICA offers an ongoing legal advisory service, supporting companies through business registration changes such as increasing or decreasing charter capital, changes of members or shareholders, contract review, and day-to-day legal compliance. Contact DEDICA for a lawyer to assess your specific dossier and the right roadmap for changing your company's charter capital.
This article is for general reference based on the law in force at the time of writing. Every company's situation is different; please consult a DEDICA lawyer for advice tailored to your specific case.
