Procedures for foreign investors to register for capital contribution, purchasing share and capital contribution in Da Nang

Da Nang is in the economic region of the central area. Da Nang has the advantage of its geographical position allows it to easily connect with the northern, central, and southern provinces. With a mild climate, Da Nang has potential for economic development, especially tourism development. In recent years, Da Nang has turned Vietnam into one of the bright spots on the world tourism map. Service industries in Da Nang are the investment direction chosen by many domestic and foreign investors.

Foreign investors investing in Da Nang can contribute in many different forms like establishing economic organizations, BCC contracts, contributing capital, or buying shares of an established company. Foreign investors don’t need to carry out procedures to apply for an Investment Registration Certificate if they’re buying shares or contributing capital to an established company. Although, they have to carry out some other actions following current law:

Overview of investment forms to contribute capital, buy shares, buy capital contributions.

It’s one of the four investment forms specified in the Investment Law 2020, defined in the Enterprise Law 2020, a capital contribution is a contribution of assets to form the charter capital of the company, including capital contribution to establish a company, or establish a company or contribute additional charter capital to an already established company. If foreign investors contribute charter capital to an established company, they can contribute to a limited liability company, a partnership, a joint-stock company, which are the types of companies permitted to establish in Vietnam.

Share is the term in a joint-stock company, where the company’s charter capital is divided into equal parts called shares. Shares have many different types corresponding to different interests such as common shares; voting preference shares; dividend preferred shares.

The contributed capital is the total value of assets of a member who has contributed or committed to contributing to a limited liability company or a partnership. The ratio of contributed capital is the ratio between the contributed capital of a member and the charter capital of a limited liability company or a partnership.

When buying shares of a joint-stock company, foreign investors will become shareholders of the company. The investor will become a member of the limited liability company when they buy the contributed capital of a member. The investor becomes a capital-contributing member of the partnership when purchasing the capital contribution of a capital-contributing member in a partnership.

Investment procedures in the form of capital contribution, share purchase, purchase of contributed capital in Da Nang

Before an investor wants to contribute capital, buy shares or purchase capital contribution to a company, it is necessary to carry out the following two procedures:

• Procedures for registration of capital contribution, share purchase, purchase of contributed capital.
• Members or shareholders changing procedures

Investors need to carry out this procedure, include:

1. a) The contribution of capital, purchase of shares, purchase of contributed capital increases the foreign investors’ ownership ratio in economic organizations engaged in conditional market access for foreign investors. Those occupations include those specified in Section B. Appendix 1 of Decree 31/2021/ND-CP.
2. b) The contribution of capital, purchase of shares, buying of contributed capital leads to the fact that foreign investors or economic organizations with foreign investors hold more than 50% of the charter capital of the organization in the following cases: increase foreign investor’s share of charter capital from less than or equal to 50% to over 50%; increase the rate of ownership of charter capital of foreign investors when foreign investors already own more than 50% of charter capital in economic organizations; c) Foreign investors contribute capital, purchase shares, purchase capital contribution of an organization having a certificate of land use right in the island and border communes, wards and townships; coastal communes, wards, and towns; other areas affecting national defense and security.

Prepared dossiers:

1. a) A registration for capital contribution, share purchase, or capital contribution purchase. Including information on enterprise registration of the economic organization to which the foreign investor intends to contribute capital, purchase shares, or purchase shares. capital contribution; business; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); rate of ownership of charter capital of foreign investors before and after capital contribution, share purchase, purchase of capital contribution to economic organizations; expected transaction value of the contract of capital contribution, share purchase, purchase of contributed capital; information on investment projects of economic organizations (if any);
2. b) Copies of legal papers of individuals, organizations contributing capital, buying shares, purchasing capital contributions, and economic organizations with foreign investors contributing capital, buying shares or purchasing capital contributions;
3. c) A written agreement in principle on capital contribution, share purchase, or capital contribution purchase between a foreign investor and an economic organization in which foreign investors contribute capital, purchase shares, purchase capital contribution, or between foreign investors and shareholders or members of that economic organization;
4. d) A copy of the certificate of land use rights of the economic organization in which foreign investors contribute capital, purchase shares or purchase capital contributions (for specific cases)

     Economic organizations with foreign investors contribute capital, purchase shares, or buy capital contributions shall submit an application for registration at the investment registration agency where the organization’s head office is located, which is the provincial Department of Planning and Investment. Da Nang or the Industrial Park Management Board in Da Nang. Within 15 days from the date of receipt of a valid application, the investment registration authority shall consider the satisfaction of conditions for capital contribution, share purchase, purchase of contributed capital and notify the investor. Unless the economic organizations with foreign investors contributing capital, buying shares, or buying contributed capital shares with certificates of land use rights in islands, communes, wards, border towns, and coastal communes, wards, and townships; other areas affecting national defense and security.

Members and shareholders member changing procedure

2.1. In case a limited liability company, a joint-stock company, or a partnership register to change its charter capital,

The application includes the following documents:

1. a) Notice of change of business registration information signed by the legal representative of the enterprise;
2. b) Resolutions and decisions of the company owner, for one-member limited liability companies; resolutions, decisions, and meeting minutes of the Members’ Council, for limited liability companies with two or more members, partnerships, of the General Meeting of Shareholders, for joint-stock companies, on the change of capital regulations;
3. c) The investment registration authority’s document approving the capital contribution, share purchase, or capital contribution purchase from foreign investors or foreign-invested economic organizations, in the case of having to do so. Procedures for registration of capital contribution, purchase of shares, purchase of contributed capital under the Law on Investment.

2.2 In case the company registers to change the contributed capital, the proportion of contributed capital of members of a limited liability company with two or more members, of general partners of a partnership company

The application includes the following documents:

1. a) Notice of change of business registration information signed by the legal representative of the enterprise;
2. b) List of members of a limited liability company with two or more members; list of members of a partnership, which does not include declarations of capital contributors. The lists must include signatures of members whose capital contribution is changed, signatures of members with unchanged capital contribution are not required;
3. c) The transfer contract or documents proving the completion of the transfer in case of transfer of contributed capital; Contract of donation in case of donation of contributed capital;
4. d) A written approval from the Investment Registration Authority of the capital contribution, share purchase, purchase of capital contributions from foreign investors or foreign-invested economic organizations, in the case of having to do so. procedures for registration of capital contribution, purchase of shares, purchase of contributed capital under the Law on Investment.

2.3 In case of a limited liability company with 2 or more members receives a new member, leading to an increase in the company’s charter capital, the company shall apply for registration of changes in business registration contents.

The application includes the following documents:

1. a) Notice of change of business registration information signed by the legal representative of the enterprise;
2. b) List of members of a limited liability company with two or more members. The list of members must include the signatures of the new member and the member whose capital contribution has changed, the signature of the member whose capital contribution has not changed is not required;
3. c) Resolution, decision, and copy of minutes of the Members’ Council meeting on the admission of new members;
4. d) Papers certifying capital contribution of new members of the company;
5. dd) A copy of an individual’s legal papers in case the new member is an individual, or a copy of an organization’s legal papers, a copy of the individual’s legal papers in the case of an authorized representative, and a copy of the legal document of the individual in the case of an authorized representative copy of the document appointing an authorized representative in case the new member is an organization.

For members being foreign organizations, copies of legal papers of the organization must be consular legalized;

1. e) The investment registration authority’s document approving the capital contribution, share purchase, purchase of capital contributions from foreign investors or foreign-invested economic organizations, in case the procedures for registration of capital contribution, purchase of shares, purchase of contributed capital under the Law on Investment.

2.4 In case of a limited liability company with two or more members changes members due to the transfer of contributed capital

1. a) Notice of change of business registration information signed by the legal representative of the enterprise;
2. b) List of members of a limited liability company with two or more members. The list of members must include the signatures of the new member and the member whose capital contribution has changed, the signature of the member whose capital contribution has not changed is not required;
3. c) The transfer contract or documents proving the completion of the transfer;
4. d) A copy of an individual’s legal papers in case the new member is an individual or a copy of an organization’s legal papers, a copy of the individual’s legal papers in the case of an authorized representative, and a copy of the legal document of the individual in the case of an authorized representative, a copy of the document appointing an authorized representative in case the new member is an organization.

For members being foreign organizations, copies of legal papers of the organization must be consular legalized;

1. dd) The investment registration authority’s document approving the capital contribution, share purchase, purchase of capital contributions from foreign investors or foreign-invested economic organizations, in case the procedures for registration of capital contribution, purchase of shares, purchase of contributed capital following the Law on Investment.

2.5 Notice of change of shareholders being foreign investors in unlisted joint-stock companies

1. a) Notice of change of business registration information signed by the legal representative of the enterprise;
2. b) The list of shareholders being foreign investors has been changed. The list of shareholders being foreign investors must include the signatures of the shareholder whose share value changes, and the signature of the shareholder whose share value remains unchanged;
3. c) Share transfer contract or documents proving the completion of the transfer;
4. d) A copy of the individual’s legal papers in case the transferee is an individual; copies of legal papers of organizations, copies of legal papers of individuals for authorized representatives, and copies of documents of appointment of authorized representatives in case the transferee is an organization.

For shareholders being foreign organizations, copies of legal papers of the organization must be consular legalized;

1. dd) The investment registration authority’s document approving the capital contribution, share purchase, purchase of capital contributions from foreign investors or foreign-invested economic organizations, in case the procedures for registration of capital contribution, purchase of shares, purchase of contributed capital in accordance with the Law on Investment.

For more specific advice on documents and procedures for each case of capital contribution, share purchase, capital contribution in different types of companies, do not hesitate to contact Van Luat. We are always ready to help customers answer questions. Sincerely thank!

Reference source: website: https://thuvienphapluat.vn/

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