Due to global supply chain shifts, Vietnam is expected to receive a new wave of foreign investment. Vietnamese law has strict regulations on foreign exchange management, so all activities of transferring money into or out of Vietnam by foreign investors are carried out through the capital account.
1. Regulations of Vietnamese law on foreign exchange control
Foreign exchange control for foreign direct investment activities in Vietnam is prescribed in Circular 06/2019/TT-NHNN. Including provisions on: capital contribution; opening and use of direct investment capital account; transfer money to make investment; transfer capital, profits and lawful revenue abroad; transfer of investment capital, transfer of investment projects.
Account of direct investment capital is a payment account in foreign currency or in Vietnam Dong opened by a foreign-invested enterprise or foreign investor at an authorized bank to conduct transactions related to foreign direct investment activities into Vietnam.
Subjects entitled to open and use capital account include:
– Enterprises with foreign capital;
– Foreign investors participating in business cooperation contracts (BCC);
– Foreign investors participating in public-private partnership (PPP) contracts. Foreign investors directly execute PPP projects without establishing enterprises.
2. Conditions for opening capital account
Contributing capital in foreign currencies and Vietnam dong of foreign investors based on the level of capital contribution specified in the Investment Registration Certificate (IRC); Business registration certificate (ERC); the notice of capital contribution, purchase of shares, contributed capital or other papers proving that the foreign investor’s capital contribution is consistent with the law. The investor’s investment capital contribution in cash shall be made through transfer to the capital account.
In case foreign investors participate in many BCC contracts or directly execute many PPP projects. Investors need to open separate capital account corresponding to each BCC contract or PPP project.
3. Records of opening capital account
Foreign investor prepare 01 set of documents including the following documents to open capital account at banks:
– Certified copy of papers
+ Investment registration certificate (IRC);
+ Written approval of capital contribution, purchase of shares or capital contributions of investors;
+ Business registration certificate (ERC). Applicable to cases of establishment of an economic organization.
– Proof of investor’s identity
+ Valid identity card, citizen ID, passport for investors being individuals;
+ Enterprise registration certificate, establishment registration certificate or other papers of equivalent value to institutional investors.
– Other documents required by the bank where the investor opens the capital account.
The file is submitted at the bank where the investor intends to open the capital account. The time to open a capital account is usually 3 to 7 working days depending on the bank. Investors base on investment scope and purposes to select appropriate banks to open capital account.
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