According to the Enterprise Law 2020 and its guiding decrees, declaring charter capital and ensuring timely capital contributions by shareholders or members is not only a legal obligation but also reflects the transparency and credibility of the enterprise in the market. However, many enterprises have faced administrative penalties — and even suspensions or criminal prosecution in serious cases — for “declaring fictitious capital” or “failing to fully contribute capital.” This article provides a detailed summary and analysis of the regulations on charter capital registration, capital contributions, and corresponding penalties for violations, helping businesses proactively comply and avoid unnecessary risks.
- Under Vietnamese law, declaring a charter capital amount higher than the actual contributed amount (known as “fictitious capital”) is illegal and subject to administrative penalties under Article 47 of Decree 122/2021/NĐ-CP.
📌 Administrative penalties for fictitious capital declarations:
| Declared Charter Capital (fictitious) | Penalty Amount |
| Under VND 10 billion | VND 20 – 30 million |
| From VND 10 to under VND 20 billion | VND 30 – 40 million |
| From VND 20 to under VND 50 billion | VND 40 – 60 million |
| From VND 50 to under VND 100 billion | VND 60 – 80 million |
| From VND 100 billion or more | VND 80 – 100 million |
In addition to the fine, enterprises are required to register an adjustment to reflect the actual contributed capital.
Note:
- Declaring fictitious capital is explicitly prohibited under Clause 5, Article 16 of the Enterprise Law 2020.
- Enterprises must be truthful when declaring charter capital to avoid legal and financial risks.
- Under Vietnamese law, failure to fully contribute the committed charter capital within the legal time limit is a violation and may result in administrative penalties.
📌 Capital contribution deadline:
According to the Enterprise Law 2020, founding members or shareholders must fully contribute their committed capital within 90 days from the date of issuance of the Enterprise Registration Certificate.
⚠️ Penalties for failure to contribute full charter capital:
If after 90 days the enterprise has not contributed the full charter capital and fails to adjust the registered capital, it may be fined under Article 46 of Decree 122/2021/NĐ-CP as follows:
- A fine from VND 30,000,000 to VND 50,000,000 for failure to adjust the charter capital after the contribution deadline has passed, in cases where no founding member or shareholder has fulfilled their contribution commitment.
Remedial measures:
The enterprise must adjust the charter capital or change the founding members/shareholders in accordance with regulations at the business registration authority.
📌 Legal responsibility:
In addition to administrative penalties, members or shareholders who fail to fully contribute capital are still responsible for the company’s financial obligations up to the amount of their committed contribution, for obligations incurred prior to the capital adjustment date.
- Comparison: Incomplete Capital Contribution vs. Fictitious Capital Declaration
| Criteria | Incomplete Capital Contribution | Fictitious Capital Declaration |
| Definition | Failure to contribute the committed capital within the statutory period (90 days) | Declaring a significantly inflated charter capital beyond actual financial capability to create a misleading impression |
| Legal Basis | – Enterprise Law 2020: Articles 47 (2), 75 (2), 113 (1) – Decree 122/2021/NĐ-CP, Article 46 | – Enterprise Law 2020, Article 16 (Prohibited acts) – Decree 122/2021/NĐ-CP, Article 47 |
| Time of Violation | After the 90-day contribution deadline | At the time of company registration (false declaration) |
| Administrative Penalty | VND 30 – 50 million for failure to adjust capital | VND 20 – 100 million depending on the fictitious amount |
| Additional Legal Responsibility | Must adjust capital to actual contribution or change founding members/shareholders | Must adjust charter capital to actual contributed amount |
| Risks to Business | – Loss of shareholder/member status for unpaid capital – Financial liability up to committed amount | – Legal credibility damage – May be investigated for fraud or deception |
| Remedy | Must adjust capital within 30 days from contribution deadline | Must re-register charter capital accurately or face legal consequences |
| Severity | Moderate – often due to limited financial capacity or plan change | More serious – considered intentional deception |