According to the current law, foreign investors have the right to contribute capital, share capital, buy shares in companies in Vietnam, accordingly, the form of buying shares of foreign investors needs to comply in accordance with the provisions of law. Today, AMI will share with you the investment orders and procedures in the form of buying shares of foreign investors.
The basic concepts
To understand clearly the orders and procedures for registration of shares, we first need to understand some of the following concepts in accordance with Article 3 of the Law on Investment 2014.
Foreign investors are individuals with foreign nationalities, which are organizations established under foreign laws to carry out business investment activities in Vietnam.
Economic organizations are organizations established and operating under the provisions of Vietnam law, including enterprises or cooperatives, cooperative unions and other organizations conducting business investment activities.
Foreign-invested economic organizations are economic organizations with foreign investors being members or shareholders, investors may be individuals or organizations.
Forms and conditions for buying shares of foreign investors:
Foreign investors may purchase shares or capital contributions at economic organizations in the following forms:
- Purchasing shares of joint stock companies from such companies or their shareholders;
- Purchasing capital contributions of members of limited liability companies to become members of such companies;
- Purchasing capital contributions of capital-contributing members in partnerships to become capital-contributing members of such partnerships;
- Purchasing capital contributions of members of other economic organizations not prescribed at Points a, b and c of this Clause.
The order of purchasing shares of foreign investors:
Investment procedures in the form of buying shares of foreign investors are conducted through the following steps (based on the provisions of Article 26 of the Investment Law 2014 guided by Article 46 of Decree 118/2015/ND-CP)
Step 1: Preparing and submitting the application
The investor prepares the application file for share purchase and submits the dossier at the Department of Planning and Investment where the head office of the economic organization organization has a foreign investor to buy shares is located;
According to the provisions of Clause 2, Article 26 of the Investment Law 2014, the application file for share purchase and capital contribution includes:
- A written registration of capital contribution or share or capital contribution purchase, covering information on the economic organization to which or at which the foreign investor intends to contribute capital or purchase shares or capital contributions; the foreign investor’s charter capital holding rate after contributing capital to, or purchasing shares or capital contributions at, the economic organization;
- A copy of the identity card or passport, for individual investors; a copy of the establishment decision or another equivalent document certifying the legal status, for institutional investors.
If the investor authorizes another person to submit the application file and receive the results of the share purchase, the person who submits the application file and receives the results must present the identity card or passport or other documents other legal individuals and documents authorizing individuals to submit and receive results in accordance with law.
Step 2: Appraising and approving the application
The Department of Foreign Economic Affairs under the Department of Planning and Investment will consider and evaluate the dossier. In case the application meets the investment conditions for foreign investors, within 15 days from the date of receipt of a complete and valid file, the Department of Planning and Investment will notify the investor in writing to Investors implement procedures to change shareholders and members in accordance with the law. In case the dossier does not meet the investment conditions, the Department of Planning and Investment will notify the investor in writing and state the reason.
Step 3: Getting results
After receiving the Notice of approval of the purchase of shares from the Department of Planning and Investment, the economic organization with a foreign investor to buy shares or contributed capital should carry out procedures to change members and shareholders at the Business Registration Agency in accordance with the law on enterprises or other laws corresponding to each type of economic organization.
When carrying out investment procedures in the form of buying shares of foreign investors, investors do not have to carry out procedures for issuance of Investment Registration Certificate as for the other case of establishment of a company with investment capital.