Steps for Foreign Investors to Contribute Capital or Purchase Shares in Vietnamese Enterprises

Jun 4

Capital contributions by foreign investors into Vietnamese companies are increasingly common amid global economic integration. However, to comply with Vietnamese laws, investors must understand the legal procedures, investment conditions, and necessary documentation. This article provides a step-by-step guide to help both investors and enterprises save time and reduce legal risks.

Understanding Foreign Capital Contributions

Before proceeding, investors should fully understand the nature of capital contribution in Vietnam and the conditions applicable to each business sector. This ensures lawful, effective investment and helps avoid unnecessary legal obstacles.

Common Forms of Capital Contribution

Foreign investors may invest in Vietnamese companies through:

Purchasing shares in an existing joint-stock company;
Acquiring capital contributions in a limited liability company (LLC);
Co-founding a new company with local investors.

Depending on the type of enterprise and investment method, investors should choose the most appropriate approach to ensure their rights are protected and legal compliance is maintained.

Conditions for Foreign Investors

Not all business sectors are fully open to foreign investors. Under the Investment Law and Vietnam’s WTO commitments, some sectors are subject to market access conditions such as ownership limits, joint venture requirements, or approvals from specialized authorities.
Therefore, investors should carefully check whether their intended sector is restricted or conditional.

Legal Procedures for Capital Contribution or Share Purchase

After identifying the appropriate business sector, investors must follow the legal procedures for investing in a Vietnamese enterprise. Depending on ownership ratio and business line, the contribution may require registration, but all procedures must be transparent and compliant.

Step 1: Obtain Approval from the Department of Planning and Investment

According to the 2020 Investment Law, if the foreign investor invests in a conditional business sector or acquires 50% or more ownership, they must register the capital contribution with the Department of Planning and Investment (DPI) where the company is headquartered.

Required documents:

Capital contribution/share purchase registration form
Notarized copy of passport/business license
Share transfer or capital contribution agreement
Amended company charter (if any)
Proof of conditional business sector (if any)

Processing time: Approximately 15 working days from the date of receipt of valid documents.

Step 2: Register Changes with the Business Registration Authority

Once approved (if required), the company must carry out further steps with the Business Registration Office under DPI:

For joint-stock companies: update shareholder list, and disclose changes to founding or major shareholders.
For LLCs: register change of members or increase in charter capital.

Documents may include:

Notification of changes in enterprise registration
Resolutions and minutes of the Members’ Council or Board of Directors
Share transfer agreement and payment evidence
Amended charter (if any)

Important Notes for Foreign Capital Contribution

Besides complying with legal procedures, investors must pay special attention to financial and foreign exchange requirements. Technical aspects such as remittance accounts and banking procedures can affect the legality of capital recognition.

Capital Remittance via Investment Account

Foreign investors are required to remit capital via an investment capital account opened at a commercial bank in Vietnam. The account must be funded with lawful capital in convertible foreign currency or VND.
Incorrect remittance may result in invalidation of capital contribution.

Register Foreign Exchange Transactions with the State Bank

In some cases, foreign investors must register foreign exchange transactions with the State Bank or an authorized commercial bank, especially when:

Capital is contributed in foreign currency;
The transaction involves transferring capital, dividends, or profits abroad.

Rights and Responsibilities After Capital Contribution

Completing the capital contribution is just the beginning. Foreign investors must be aware of their rights under the law, as well as responsibilities they must fulfill during their cooperation with the Vietnamese company.

Investor Rights:

Official recognition as a member/shareholder;
Participation in management, profit sharing, and asset control depending on ownership;
Legal protection under Vietnamese laws and international treaties.

Investor Obligations:

Comply with laws on business, taxation, labor, environment, etc.;
Fulfill reporting obligations as required by authorities;
Avoid proxy investments through Vietnamese nationals.

Are You Exploring Foreign Capital Contribution in Vietnam?

Contact DEDICA Law Firm – a professional legal partner specialized in foreign investment, M&A, and business licensing. We assist with industry assessment, document preparation, licensing procedures, and legal support after the transaction.
With hands-on experience and a dedicated team, DEDICA provides effective, transparent, and timely legal solutions tailored for foreign investors.

Foreign capital contributions offer significant opportunities but also involve legal risks. It’s essential to understand current laws, assess the business sector carefully, and choose a suitable investment structure. When necessary, seek legal counsel to ensure compliance and protect your rights throughout the investment process.

Contact DEDICA Law Firm today for expert legal advice!