VIETNAM Law and Practice Contributed by: Thang Nguyen, Minh Nguyen and Nguyet Le, ACSV Legal
Minimum Investment Capital General
In case the capital is not contributed within the required or agreed period, the following proce - dure will apply. • Single-member LLC – must adjust charter capital to reflect actual contribution within 30 days after the deadline. The owner remains liable for obligations up to the committed capital. • Multiple-member LLC – a member failing to contribute in full loses membership or retains rights proportional to the amount paid. Unpaid capital will be sold as decided by the members’ council. The company must update charter capital within 30 days. • JSC – a shareholder not fully paying for shares loses rights to unpaid shares. Unpaid shares are deemed unsold and may be sold by the Board. The JSC must update charter capital and founding shareholders within 30 days. 3.2 Incorporation Process A foreign investor must generally apply for an Investment Registration Certificate (IRC), which is issued by the competent DOF, before an eco - nomic organisation can be incorporated. The economic organisation must be incorporated in accordance with the laws on enterprises or other local laws corresponding with its form. ERC All enterprises in Vietnam must obtain an ERC from the DOF. For new entities, only an ERC is required if foreign ownership does not exceed 50%. The ERC includes key company details such as enterprise name, code, head office address, ownership structure, legal representa - tives, and charter capital.
There is no defined minimum investment capital in unconditional businesses. However, a certain amount of capital contribution might be required in particular fields, where investment requires a high cash flow or poses large financial liabilities and risks upon the investment vehicle. • The charter capital of a single-member LLC and a multiple-member LLC shall be the total value of capital contributed by the member(s) to the company. • The charter capital of a JSC consists of the total aggregated par value of shares of all classes sold by the company. • At the time of the registration of establish - ment, the charter capital is the total value of assets or capital that the owner or members undertake to contribute to an LLC, or the total aggregate par value of shares of all classes which have been registered for subscription by shareholders of a JSC, and stated in the charter of such company. Capital contribution can be in the local currency (VND – Vietnamese dong), freely convertible for - eign currency, gold, land-use rights, intellectual property rights, technology, technical know-how, or other assets which can be valued in VND. Capital contribution time limit Owners of a single-member LLC, the members of a multiple-member LLC and shareholders of a JSC must contribute assets or capital as registered with the relevant authorities within 90 days from the date of issuance of the ERC. Own - ers of single-member LLCs, members of multi- member LLCs, and shareholders of JSCs must contribute capital or pay for subscribed shares within 90 days from the date of ERC issuance, unless a shorter period is specified.
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