Ms. Tran Thi Phuong Thuy (HCMC) asked the authorities to guide the following cases:

Company A is a one-member limited liability company with capital contribution by individual B and registered in Ho Chi Minh City. In 2017, a US company bought back the entire contributed capital of individual B and became the sole owner of company A. The transfer price is equal to the charter capital of company A (the amount of personal capital B has already paid). contribute).

From 2017 until now, the US company has not been able to transfer capital to company A nor has individual B been able to withdraw capital from company A.

In 2021, the US company wants to carry out procedures to transfer capital to company A, but the indirect investment capital account at the bank has been temporarily locked by the bank.

In the opinion of the bank, because the time limit has passed for the transfer of capital to company A, company A must send an official dispatch to the State Bank to ask for permission to reopen this account.

Ms. Thuy asked What documents should Company A need to prepare and which contact unit of the State Bank of Vietnam should be contacted?

The State Bank of Vietnam responded to this issue as follows:

Regulations on foreign exchange management

According to Clause 2, Article 3 of Circular No. 06/2019/TT-NHNN dated June 26, 2019 of the State Bank guiding the management of foreign exchange for foreign direct investment activities in Vietnam, regulations:

“Foreign direct investment enterprises include:

... b) Enterprises other than those specified at Point a of this Clause with foreign investors owning 51% or more of the enterprise's charter capital, including:

(i) Enterprises in which foreign investors contribute capital, purchase shares, or contribute capital to the enterprise (operating in conditional or non-conditional investment and business lines, applicable to investors); foreign) resulting in foreign investors owning 51% or more of the enterprise's charter capital;

(ii) The enterprise is established after the separation, merger or consolidation resulting in foreign investors owning 51% or more of the charter capital of the enterprise;

(iii) Newly established enterprises in accordance with specialized laws;…”.

Article 5 of Circular No. 06/2019/TT-NHNN stipulates that foreign direct investment enterprises specified in Clause 2, Article 3 of this Circular must open a direct investment capital account at a credit institution. allowed to conduct lawful revenue and expenditure transactions related to foreign investment activities in Vietnam.

Clause 2, Article 11 of Circular No. 06/2019/TT-NHNN stipulates the responsibilities of authorized credit institutions as follows: To open and close direct investment capital accounts at the request of investment enterprises that have foreign direct investment, foreign investors in accordance with the provisions of this Circular.

Article 10 of Circular No. 06/2019/TT-NHNN stipulating that the payment of transfer value of shares and contributed capital in foreign-invested enterprises between non-resident investors and investors Investments being residents must be made through the direct investment capital account, and the valuation and payment of investment capital transfer values, investment projects between residents and non-residents must be done by Vietnamese Dong.

Opening and using a payment account

The opening and use of payment accounts of residents and non-residents at payment service providers must comply with the provisions of Circular No. 23/2014/TT-NHNN dated August 19, 2014; Circular No. 02/2019/TT-NHNN dated February 28, 2019 of the State Bank and Circular No. 16/2020/TT-NHNN dated December 4, 2020 of the State Bank (amending Circular No. 23 /2014/TT-NHNN). These documents specifically stipulate dossiers, order, procedures, opening and use of payment accounts (including investment capital accounts).

Pursuant to the above provisions, in case a foreign investor who is a non-resident buys 100% of the contributed capital of a Vietnamese enterprise, this enterprise will be classified as “Foreign direct investment enterprises” according to the provisions of Circular No. 06/2019/TT-NHNN.

Therefore, it is recommended that citizens, authorized credit institutions and businesses strictly comply with the provisions of Circular No. 06/2019/TT-NHNN and other relevant provisions of the law.