Question: How is investment in the form of capital contributions or share purchases implemented?

Gattaca Law attorney answers:

Foreign investors can invest in an existing business in Vietnam by purchasing part or all of the capital contribution or shares of the business.

When contributing capital, purchasing shares, or acquiring a capital contribution of a business, foreign investors must complete the procedures to change shareholders or members at the business registration office in accordance with relevant laws.

However, in the following cases, foreign investors must complete the procedures for registering capital contribution or share purchase at the investment registration office before changing members or shareholders at the business registration office:

(i) The capital contributions or share purchases increases the foreign investor's ownership in a business operating in industries or sectors subject to conditional market access for foreign investors;
(ii) The capital contributions or share purchases results in the foreign investor holding over 50% of the charter capital of the business;
(iii) The foreign investor contributes capital, purchases shares, or acquires a capital contribution in a business that holds a land use rights certificate on islands, border communes, wards, towns, coastal areas, or other areas affecting national defense and security.

The procedures for registering capital contribution, share purchase, or capital contribution are as follows:

(1) An economic organization with foreign investors that intends to contribute capital, purchase shares, or acquire a capital contribution under the cases regulated in Clause 2, Article 26 of the Investment Law, shall submit one set of registration documents for capital contribution, share purchase, or capital contribution to the investment registration office where the economic organization is headquartered.

If the conditions prescribed in Clause 2, Article 24 of the Investment Law are met, based on the approval document from the investment registration office, the economic organization with foreign investors shall proceed with the procedures to change members or shareholders at the business registration office in accordance with the law on enterprises and other relevant laws corresponding to each type of economic organization.

(2) The dossier for registering capital contribution, share purchase, or capital contribution includes:

a) A registration document for capital contribution, share purchase, or capital contribution, including the following information: business registration information of the economic organization in which the foreign investor intends to contribute capital, purchase shares, or acquire a capital contribution; business sectors; list of founding shareholders and foreign investors (if any); foreign investors' ownership ratio before and after the capital contribution, share purchase, or capital contribution; transaction value of the capital contribution, share purchase, or capital contribution contract; information about the economic organization's investment project (if any);
b) A copy of the legal documents of the individuals or organizations contributing capital, purchasing shares, or acquiring a capital contribution, and of the economic organization with foreign investors;
c) An agreement document between the foreign investor and the economic organization receiving the capital contribution, share purchase, or capital contribution;
d) A declaration document (with a copy attached) of the Land Use Rights Certificate of the economic organization receiving the capital contribution, share purchase, or capital contribution from the foreign investor (for cases regulated in points b and c, Clause 2, Article 24 of the 2020 Investment Law). The economic organization with foreign investors is responsible before the law for the accuracy and truthfulness of the declaration.

(Source: Vietnam Investment Guidebook)