Open and use direct investment capital account in foreign currency or in Vietnam Dong

Hi DMS Law firm in Da Nang, Vietnam! I am a Canadian, I am investing to set up a company in Vietnam. Is the foreign direct investment enterprise is required to open a Direct Investment Capital Account ? How to transfer funds in form of foreign investment capital injection ?

Hi!

The contribution of investment capital in cash by the foreign investors or Vietnamese investors shall be made by transfer to the direct investment capital account (Clause 3 Article 4 Circular No. 06/2019/TT-NHNN dated June 26, 2019).

Opening and use of direct investment capital account in foreign currency:

Foreign direct investment enterprise is required to open a direct investment capital account in foreign currency at 01 (one) authorized bank to carry out legal receipt and payment transactions in foreign currency related to foreign direct investment activities in Vietnam (Point a Clause 2 Article 5 Circular No.06/2019/TT-NHNN dated June 26, 2019).

Opening and use of direct investment capital account in Vietnam Dong:

In case of making investment in Vietnam dong, foreign direct investment enterprise is allowed to open 01 (one) direct investment capital account in Vietnam dong at the authorized bank where the direct foreign capital investment account in foreign currency has been opened to perform legal receipt and payment transactions in Vietnam dong related to foreign direct investment activities in Vietnam (Point c Clause 2 Article 5 Circular No. 06/2019/TT-NHNN dated June 26, 2019).

“Foreign direct investment enterprises” shall include:

Enterprises that are established in the form of investment for establishment of economic entities whose foreign investor is a member or shareholder and who are required to follow the procedures for issuance of investment registration certificate in accordance with law on investment;

The enterprises that are not regulated in Point a hereof with 51% or more of charter capital held by a foreign investor, including:

- An enterprise with a foreign investor contributing capital, buying shares where the capital contributed to the enterprise (operating in either conditional or unconditional business lines as applicable to foreign investors) leads to the foreign investor holding 51% or more of charter capital of the enterprise;

- An enterprise being established after split, merger, consolidation which leads to the foreign investor holding 51% or more of charter capital of the enterprise;

- An enterprise that is newly established in accordance with specialized laws;

A project enterprise that is established by a foreign investor for the purpose of a public-private partnership (PPP) project in accordance with laws and regulations on investment.

As such, in case of contributing capital in foreign currency, it is required to open a direct investment capital account in foreign currency; in case of making investment contribution in Vietnam Dong, it is allowed to open 01 (one) direct investment capital account in Vietnam dong (Clause 2 Article 5 Circular No. 06/2019/TT-NHNN dated June 26, 2019)./.

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Phone: 0914 165 703 or Email: dmslawfirm@gmail.com

Opening and use of Direct Investment Capital Account in foreign currency, in Vietnam Dong