Transfer of Capital to Foreign Investors: Legal Regulations and Conditions for Implementation

1. Legal Regulations and Conditions for Executing the Transaction 

When contributing capital, purchasing shares, or purchasing capital contributions, foreign investors (FIs) must consider the following two prerequisites: 

1.1. Market Access Conditions and Ownership Ratio 

• Legal Basis: Section 2, Chapter II of Decree No. 31/2021/ND-CP regulates market access conditions for foreign investors. 

• Principle: Foreign investors are subject to the same market access conditions as Vietnamese investors, except for sectors regulated in the List of sectors restricted or prohibited from market access for foreign investors. 

1.2. Cases Requiring Registration for Capital Contribution/Share Purchase 

• Legal Basis: Clause 2, Article 26 of the Investment Law 2020 stipulates the cases where a foreign investor must register the capital contribution, share purchase, or capital contribution purchase transaction before changing the member/shareholder: 

  • The capital contribution, share purchase, or capital contribution purchase increases the foreign investor's ownership ratio in an economic organization operating in a sector subject to market access conditions for foreign investors. 

  • The capital contribution, share purchase, or capital contribution purchase results in the foreign investor or economic organization specified in Clause 1, Article 23 of the Investment Law 2020 holding over 50% of the charter capital of the economic organization (excluding cases where the existing ownership ratio is already over 50% and is increased). 

  • The economic organization holds a Certificate of Land Use Rights on an island, or in a border commune, ward, or town; a coastal commune, ward, or town; or other areas affecting national defense and security. 

2. Order, Procedures, and Required Documents 

The process of executing the capital contribution, share purchase, or capital contribution purchase transaction is divided into two main steps: 

2.1. Step 1: Registering Capital Contribution, Share Purchase/Capital Contribution (If falling under the cases in Clause 2, Article 26 of the Investment Law 2020) 

• Receiving Authority: The Department of Planning and Investment (DPI) where the company is headquartered. 

• Required Documents: 

  • Written registration for capital contribution/share purchase according to the form specified in Decree No. 31/2021/ND-CP. 

  • Legal documents of the foreign investor and the company, such as notarized copies (with consular legalization) of the Business Registration Certificate/Establishment Decision (for organizations) or passport/ID card (for individuals). 

  • Principal agreement on capital contribution or share purchase between the investor and the transferring party or the company. 

  • Written declaration accompanied by a notarized copy of the Certificate of Land Use Rights of the company (for cases where the company owns a Certificate of Land Use Rights for land located on an island, a border commune, a coastal area, or other areas affecting national defense and security). 

• Processing Time: 15 working days from the date of receiving a complete and valid application. 

2.2. Step 2: Amending the Enterprise Registration Certificate 

• Receiving Authority: The Provincial-level Business Registration Authority. 

• Required Documents: 

  • Notice of change in enterprise registration contents. 

  • List of shareholders who are foreign investors after the change. The list of shareholders who are foreign investors must include the signature of shareholders whose share value changes, but the signature of shareholders whose share value does not change is not mandatory. 

  • Share transfer contract or documents proving the completion of the transfer in case of share transfer; documents proving the capital contribution in case the foreign investor shareholder purchases privately offered shares. 

  • Copy of the legal documents of the organization and copy of the decision to appoint the authorized representative in case the new shareholder is an organization. For foreign organizations, the copy of the legal documents of the organization must be subject to consular legalization. 

  • Copy of the written approval from the Investment Registration Authority on the capital contribution, share purchase, or capital contribution purchase by the foreign investor or economic organization with foreign investment capital, for cases requiring the registration procedure for capital contribution, share purchase, or capital contribution purchase under the provisions of the Investment Law. 

• Processing Time: 03 working days from the date of receiving a complete and valid application. 

3. Regulations on Capital Contribution Fund Transfer and Practical Notes 

3.1. Regulations on Foreign Exchange and Fund Transfer 

• Principle: The transfer of investment capital and investment projects is regulated in detail on a case-by-case basis under Circular No. 06/2019/TT-NHNN and Circular No. 03/2025/TT-NHNN, including the consideration of the investor’s residence status and the form of investment (direct or indirect). As a general principle: 

  • Investment capital contributions in cash by foreign investors and Vietnamese investors must be made via bank transfer into a direct investment capital account (Clause 3, Article 4 of Circular No. 06/2019/TT-NHNN). 

  • All receipts and payments related to foreign indirect investment activities in Vietnam by foreign investors must be conducted through an indirect investment account, which is a Vietnam-dong payment account opened by the foreign investor at an authorized bank (Clause 2, Article 3 of Circular No. 03/2025/TT-NHNN). 

• For direct investment: The payment for the transfer of shares or capital contributions in enterprises with foreign direct investment, as stipulated in Article 10 of Circular No. 06/2019/TT-NHNN, shall be carried out as follows: 

a) Between investors who are non-residents, or between investors who are residents, payment is not required to be made through a direct investment capital account; 

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

• For indirect investment: Foreign indirect investment transactions in Vietnam must open and use an indirect investment account in accordance with Article 4 of Circular No. 03/2025/TT-NHNN, including: 

1. The purchase and sale of securities on the Vietnamese securities market and the purchase and sale of other valuable papers; 

2. Capital contributions, and the purchase of shares or capital contributions in unlisted enterprises that are not subject to the requirement to open a direct investment capital account as prescribed in Circular No. 06/2019/TT-NHNN dated 26 June 2019 of the Governor of the State Bank of Vietnam on foreign exchange management for foreign direct investment into Vietnam, and its amendments, supplements, or replacements (if any); 

3. Entrusted investment in Vietnam dong through fund management companies and other organizations licensed to conduct entrusted investment activities in accordance with law; 

4. The purchase and sale of other types of securities in accordance with securities laws. 

3.2. Practical Experience and Recommendations 

The capital transfer to foreign investors requires full compliance with legal regulations regarding the registration of capital contribution, share purchase, purchase of capital contributions, and the transfer of contributed capital funds. Grasping the procedural order, preparing complete documentation, and avoiding common errors will help the transaction proceed transparently, safely, and effectively. 

Contact Lexsol today for detailed consultation and comprehensive support throughout the capital transfer process, ensuring all procedures are carried out in compliance with the law and with absolute security.