After carrying out the necessary procedures to reach mutual agreements, LA Company transfers this deposit to the DICA account (direct investment capital account).

Ms. Bui Thi Tuyet Ngan asked, is it right for LA Company to do so?

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

Regarding the payment of share transfer value, Point b, Clause 1, Article 10 of Circular No. 06/2019/TT-NHNN dated June 26, 2019 of the State Bank of Vietnam guiding foreign exchange management for operations Foreign direct investment activities in Vietnam provide:

"1. The payment of the transfer value of shares and contributed capital in a foreign-invested enterprise specified in Clause 2, Article 3 of this Circular shall be made as follows: ...

b) Between a non-resident investor and a resident investor must be done through a direct investment capital account.

Regarding the deposit, Article 3 of Circular No. 32/2013/TT-NHNN dated December 26, 2013 of the State Bank of Vietnam guiding the implementation of regulations restricting the use of foreign exchange in the territory of Vietnam stipulates:

"In the territory of Vietnam, all transactions, payments, listings, advertisements, quotations, pricing, pricing in contracts, agreements and other similar forms... of residents, people non-resident is not done in foreign exchange".

Pursuant to the above provisions: (i) The payment of transfer value of shares and contributed capital in foreign direct investment enterprises (FDI enterprises) between foreign investors who are non-residents and resident Vietnamese investors must do so through the FDI enterprise's direct investment capital account; and (ii) Valuation, payment... deposit for purchase and sale of capital contribution in FDI enterprises (as mentioned by Ms. Bui Thi Tuyet Ngan) cannot be done in foreign currency.

In addition, the deposit is made on the basis of ensuring compliance with the provisions of civil law and other relevant laws.