Charter Capital and Investment Capital of Vietnam FIE
A foreign invested enterprise (FIE) in the form of a limited liability company is the most common investment vehicle in Vietnam amongst foreign investors. The term of company or foreign invested enterprise mentioned below refer specifically to a limited liability company. There are no minimum charter capital requirements for establishing a foreign invested enterprise, except for some specific sectors (e.g., banking, real estate, aviation etc.). However, the investors should commit a reasonable amount of charter capital based on the scale and business scope of the foreign invested enterprise. The charter capital and investment capital shall be stated in the charter (also known as articles of association) and other documents when applying for the establishment of a foreign invested enterprise. The charter capital and investment capital will be set out in the investment registration certificate (IRC) of the foreign invested enterprise. The charter capital will be stated in the enterprise registration certificate (ERC) of the foreign invested enterprise as well.
As defined by the Vietnamese law, charter capital is the amount of capital undertaken to be contributed by the investors within a certain period as stated in the charter of the company. The investors?liability for the debts of the company is limited to their committed capital contribution amount. Investment capital is the total capital amount, including charter capital and medium or long-term loan capital, required to carry out the investment project. The amount of the charter capital and investment capital could be different or equal.
The charter capital of a foreign invested enterprise has a statutory term of contribution, while the investment capital does not. The charter capital shall be contributed based on the time frame specified in the investment registration certificate and the charter of the foreign invested enterprise. And the investors must contribute the charter capital in full within 90 days from the date of issuance of the enterprise registration certificate. Failure to do so may result in fines or revoke of the investment registration certificate.
The contribution of the charter capital can be made in the form of currency or other assets which value can be expressed in terms of money. If the contribution is made in currency, the foreign investor must remit the capital into the direct investment capital account of the foreign invested enterprise. According to the relevant regulations, a foreign invested enterprise may only open one direct investment capital account at one licensed bank. In case such foreign invested enterprise wishes to open a direct investment capital account at another licensed bank, it must close the opened direct investment capital account and transfer the entire balance to the new account.
KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.
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