Capital contribution transfer is the act of transferring a part or all of the rights and obligations corresponding to one’s capital contribution in a company to another individual or organization. When a capital contribution transfer is made, the information about the capital contribution and the owner of the capital contribution on the Investment Registration Certificate and the Enterprise Registration Certificate will be changed. Therefore, the enterprise needs to adjust the information at the competent governmental agency.
The service of adjusting information due to capital contribution transfer between investors is a service in which VinaSC Group will conduct consulting activities and carry out procedures to register changes in investment registration content/enterprise registration content according to regulations. With many years of experience and a team of high-quality personnel, Vinasc Group is confident that it can provide customers with the most professional, fast, and effective service.
I. SERVICE PROVISION PROCESS AT VINASC:
Step 1: VINASC receives basic information about the capital contribution transfer
- Vinasc receives basic information about the capital contribution transfer of the enterprise, including:
The percentage of the capital contribution being transferred;
The percentage of capital contribution after the transfer corresponding to each investor;
Information on new investors (if any);
Copies of legal documents of individuals, organizations contributing capital, buying shares, buying capital contributions, and economic organizations with foreign investors contributing capital, buying shares, buying capital contributions.
Documents of agreement in principle on capital contribution, share purchase, capital contribution purchase (if any).
Note: Documents issued by foreign agencies must be certified or legalized by Vietnamese diplomatic missions or consular offices abroad; translated into Vietnamese and certified in accordance with Vietnamese law.
- Vinasc will review the specific legal requirements involved to develop a plan for implementing the service.
*Case 1: In the case of carrying out procedures for capital contribution registration, share purchase, or capital contribution purchase by a foreign economic organization.
*Case 2: Not in the case of carrying out procedures for capital contribution registration, share purchase, or capital contribution purchase by a foreign economic organization.
Step 2: Prepare necessary dossier
- The two parties discuss and agree on the content of the service, then Vinasc bases on them to prepare the necessary documents to hand over to the business for authentication.
- Vinasc receives the complete authenticated dossier along with the documents that the business needs to prepare to complete the dossier.
Step 3: Submit the application to the competent authority as prescribed
- Note: If the transferor is a Vietnamese company that does not have an Investment Registration Certificate (IRC), there is no need to carry out the IRC adjustment procedure below.
- Case 1: In the case of registration for capital contribution, share purchase, or purchase of capital contribution from a foreign economic organization.
- Submit the application for capital contribution, share purchase, or purchase of capital contribution;
- Submit the application for adjustment of the Enterprise Registration Certificate (ERC) at the business registration authority;
- Submit the application for adjustment of the Investment Registration Certificate (IRC) at the investment registration authority (if any).
- Case 2: Not in the case of registration for capital contribution, share purchase, or purchase of capital contribution from a foreign economic organization.
- Submit the application for adjustment of the Enterprise Registration Certificate (ERC) at the business registration authority;
- Submit the application for adjustment of the Investment Registration Certificate (IRC) at the investment registration authority (if any).
Step 4: Track the processing of documents
- VINASC monitors the dossier processing process step by step and reports the progress to the business as requested. In case of need to modify, supplement information, documents, Vinasc is responsible for completing it as soon as possible to limit work interruption.
Step 5: Complete the service & Deliver the results to the client
- Review all the steps of the service implementation to ensure that the service has been completed comprehensively
- Transfer to the business the specific results that Vinasc collects on behalf of the business during the service provision process.
II. SPECIFIC RESULTS
- Notice of approval of the acquisition of capital contribution (if any)
- New Enterprise Registration Certificate (ERC)
- New Investment Registration Certificate (IRC) (if any)
III. ESTIMATED IMPLEMENTATION TIME
- Applying for the Certificate of Confirmation of Capital Contribution Registration, Share Purchase, Capital Contribution Purchase (if any): 25-30 working days
- Applying for the Enterprise Registration Certificate: 05-07 working days
- Applying for the Investment Registration Certificate (if any): 25-30 working days
The estimated time above is calculated from the date Vinasc receives the complete dossier as requested and sent to you.
IV. DETAILED INSTRUCTIONS
NOTES ON CAPITAL CONTRIBUTION RATIO IN TRANSFER
Foreign investors must follow the procedures for registering capital contributions, purchasing shares, or acquiring equity in an economic organization before changing members or shareholders if they fall under one of the following cases:
- The capital contribution, share purchase, or equity acquisition increases the ownership ratio of foreign investors in a business sector/line or industry with conditional market access for foreign investors.
- The capital contribution, share purchase, or equity acquisition results in the foreign investor or economic organization (with foreign investors/economic organizations holding more than 50% of the charter capital) holding more than 50% of the charter capital of the economic organization in the following scenarios:
- Increasing the ownership ratio of foreign investors from 50% or less to more than 50%;
- Increasing the ownership ratio of foreign investors when the foreign investor already holds more than 50% of the charter capital in the economic organization.
- The foreign investor contributes capital, purchases shares, or acquires equity in an economic organization with a land use rights certificate on islands and border communes, wards, and towns; coastal communes, wards, and towns; or other areas affecting national defense and security.
- If the investor does not fall under the above categories, they should follow the procedures for changing shareholders or members according to relevant laws when contributing capital, purchasing shares, or acquiring equity in an economic organization.
Notes During the Capital Contribution Transfer Process
Before deciding to transfer capital contributions, legal, financial, and asset due diligence of the company should be performed to accurately determine debts, burdens, and obligations before and at the time of transfer. This due diligence ensures that the buyer makes the most informed decision about whether to acquire the company and affects the transfer price and the seller’s liability for any outstanding obligations of the business. The transfer of the company does not alter its rights and obligations. In most company transfers, the former owners remain responsible for certain obligations of the business for a certain period after the transfer is completed. Such terms should be included in the transfer contract.
After completing the transfer (or when conditions stated in the transfer contract are met), the buyer should convene a meeting of the General Meeting of Shareholders/Members’ Council to re-elect company management positions, such as board members and chairman. These internal procedures are necessary to ensure the enterprise complies with legal regulations and maintains internal governance safety.
*Summary Table of Required Documents
| *Case 1: Subject to the procedure for registering capital contribution, share purchase, or capital contribution purchase of a foreign economic organization. | ||||
| No. | Required documents | Implementer | ||
| Customer
(1) |
Vinasc Group (2) | Vinasc Group handles on behalf of our client (3) | ||
| 1 | Consular legalized, translated, and notarized copy of one of the following documents.
+ For individuals: Copy of Citizen ID/Passport. + For organizations: Establishment Decision/Enterprise Registration Certificate/Investment Registration Certificate or other equivalent documents. |
X | X | |
| 2 | Notarized copy of the Passport of the legal representative and the representative managing the investor’s capital contribution; | X | X | |
| 3 | Notarized copy of the Enterprise Registration Certificate of the transferring party of capital contribution/shares; | X | X | |
| 4 | Documents for registering capital contribution, share purchase, capital contribution purchase (if applicable);
Document registering capital contribution, share purchase, capital contribution purchase;
Minutes of agreement on capital contribution, share purchase, capital contribution purchase;
Decision on capital contribution, share purchase, capital contribution purchase;
Principle agreement document;
Decision on appointing the representative of the capital contribution;
Power of attorney. |
X | ||
| 5 | Documents for requesting adjustment of the Investment Registration Certificate (if applicable):
Document requesting adjustment of the investment project;
Investment project proposal;
Report on the implementation status of the project;
Power of attorney. |
X | ||
| 6 | Documents for requesting adjustment of the Enterprise Registration Certificate:
Notification of changes in enterprise registration information;
Company charter (if changing the type of business registration);
Minutes of meeting (if applicable);
Decision to repurchase the capital contribution;
Decision on appointing the representative managing the investor’s capital contribution (if the investor is an organization);
List of representatives (if the investor is an organization);
List of members (if applicable);
Capital contribution transfer agreement;
Power of attorney. |
X | ||
| *Case 2: Not subject to the procedure for registering capital contribution, share purchase, or capital contribution purchase of a foreign economic organization. | ||||
| No. | Required documents | Implementer | ||
| Customer
(1) |
Vinasc Group (2) | Vinasc Group handles on behalf of our client (3) | ||
| 1 | Consular legalization, translation, and notarized copy of one of the following documents:
For individuals: Copy of Citizen ID/Passport. For organizations: Establishment Decision/Enterprise Registration Certificate/Investment Registration Certificate or other equivalent documents. |
X | X | |
| 2 | Copy of the Passport of the legal representative and the representative managing the investor’s capital contribution; | X | X | |
| 3 | Notarized copy of the Enterprise Registration Certificate of the party transferring capital contribution/shares; | X | X | |
| 4 | Documents for requesting adjustment of the Investment Registration Certificate (if applicable):
Document requesting adjustment of the investment project;
Investment project proposal;
Report on the implementation status of the project;
Principle agreement document;
Explanatory report on meeting conditions (if applicable);
Decision to repurchase the capital contribution;
Decision on appointing the representative of the capital contribution;
Power of attorney. |
X | ||
| 5 | Documents for requesting adjustment of the Enterprise Registration Certificate:
Notification of changes in enterprise registration information;
Company charter (if changing the type of business registration);
Minutes of meeting (if applicable);
Decision to repurchase the capital contribution;
Decision on appointing the representative managing the investor’s capital contribution (if the investor is an organization);
List of representatives (if the investor is an organization);
List of members (if applicable);
Capital contribution transfer agreement;
Power of attorney. |
X | ||
(*) According to the procedure, the customer is responsible for completing the documents in column (1), and Vinasc will be responsible for completing the documents in column (2).
(*) In some cases, if the customer has difficulty preparing the documents, Vinasc can complete the documents in column (3) on their behalf. However, in this situation, we must examine each specific case and the following issues may arise:
– Additional document preparation costs (these costs will vary depending on the government agency and the legal regulations in Vietnam at each stage)
– Additional time required to prepare these documents
(*) During the preparation process, the customer should send a scanned copy of all the above documents in advance so that we can prepare the documents in a timely manner.
(*) In some special cases, the government agency may request additional information to supplement the documents.
V. RISK WARNING
Adjusting an investment project refers to a foreign investor altering one or more aspects of an investment project that has been registered with the competent state authority. This procedure is mandatory when there are specific changes to the project’s objectives, scale, location, form, capital, duration, etc.
According to Decree 122/2021/ND-CP, investors may be subject to administrative fines ranging from VND 70,000,000 to VND 100,000,000 if they do not follow the procedure for adjusting the Investment Registration Certificate when the project adjustment changes the content of the Investment Registration Certificate.
Additionally, the investor will be required to proceed with the adjustment of the Investment Registration Certificate.
Besides, depending on the needs of customers, VinaSC often advises and supports investors to control well the contents related to the above services such as tax accounting, labor, social insurance, salary, sub-licenses… in a complete and compliant manner with the laws in Vietnam that you can refer to.
Please contact VinaSC for advice, support, and detailed quotes for the above services.