PROVISIONS ON FOREIGN DIRECT INVESTMENT IN VIETNAM

Under Circular No. 06/2019/TT-NHNN issued by the State Bank of Vietnam on June 26, 2019 and coming into effect on September 06, 2019:

– Foreign and Vietnamese investors in enterprises with foreign directly-invested capital are allowed to contribute capital using foreign currencies, Vietnamese Dong (VND) in accordance with their registered amounts which are recorded in the:

• Investment Registration Certificates;
• Certificates of incorporation and operation in accordance with provisions of specialized laws (in the case of enterprises with foreign directly-invested capital which are established and operating in accordance with specialized laws);
• Notices of the foreign investors’ eligibility to contribute capital or purchase shares/stakes;
• Signed PPP contracts with competent authorities and other documents which can prove the compliance with laws of capital contribution of foreign investors.

– In the case of enterprises whose foreign investors have opened and used indirect investment accounts to contribute, purchase shares/stakes that leads to such investors holding 51% and more of the charter capital, such enterprises shall open a direct investment account;

– The following enterprises shall close their direct investment accounts, and their non-resident foreign investors who own shares/stakes shall open indirect investment accounts in accordance with regulations of foreign exchange management:

• Any enterprise whose foreign investors hold less than 51% of charter capital, except for enterprises established in the form of investment in establishing a business organization whose members or shareholders are foreign investors and must be granted an investment registration certificate in accordance with the law on investment;
• Any enterprise that does not need an investment registration certificate but has been granted one by competent authorities under investment law;
• Enterprises with foreign directly-invested capital whose stocks are listed or registered for transactions on stock exchanges;
• In case one of the enterprises mentioned above is borrowing and repaying foreign debt through its direct investment account, it is allowed to continue using this account for the purpose of borrowing and foreign debt repayment in accordance with regulations of law on foreign borrowing and debt repayment of enterprises.

Best regards,