20 Nov CAPITAL CONTRIBUTION FOR ESTABLISHMENT A COMPANY – WHAT YOU NEED TO KNOW
There is only a business Law system for both local and foreigner investors to do business in Vietnam, deals with the establishment, organization, restructuring, dissolution, and relevant activities of enterprises, including limited liability companies, joint-stock companies, partnerships, capital contribution, sole proprietorships, and groups of enterprises. We would like to introduce to you four of key topics to know about the business regulations in Vietnam:
It would be our pleasures to share with you for any query or question about the terms and conditions as well as practical cases which we have been experiencing since years 2000, where the first law on enterprise has allowed private sector to born and blooming.
CAPITAL CONTRIBUTION FOR ESTABLISHMENT A COMPANY
LAW ON ENTERPRISES
Law No. 68/2014/QH13 Hanoi, November 26, 2014
DEADLINE OF CAPITAL CONTRIBUTION TO COMPANY ESTABLISHMENT
Charter capital of a multi-member limited liability company upon business registration is the total value of capital contribution to the company promised by the members. Charter capital of a single-member limited liability company on the business registration date is total value of assets promised to be contributed by the owner, which is written in the company’s charter.
Every member, owner must contribute capital properly in terms of sufficiency and type of assets as agreed within 90 days from the day on which the Certificate of Business registration is issued. If sufficient charter capital is not fully contributed by the deadline, the owner shall register a change to the charter capital within 30 days from the deadline for fully contributing charter capital, each member has the rights and obligations proportional to their promised capital contribution.
METHOD OF PAYMENT IN CAPITAL CONTRIBUTION TRANSACTIONS AND IN THE PURCHASE, SALE AND TRANSFER OF CAPITAL CONTRIBUTIONS AT OTHER ENTERPRISES
Enterprises may not make cash payment (in banknotes and coins issued by the State Bank of Vietnam) in capital contribution transactions and in the purchase, sale and transfer of capital contributions at other enterprises. When conducting capital contribution transactions and when purchasing, selling or transferring capital contributions at other enterprises, enterprises shall:
- Pay by check.
- Pay by payment order – money transfer.
- Pay by other non-cash payment modes in accordance with current regulations.
FINES ON VIOLATIONS OF REGULATIONS ON ENTERPRISE ESTABLISHMENT
A fine of VND 5,000,000 and VND 10,000,000 for any of the following acts:
- Continuing to operate after the operational time stated in the Charter has ended and not allowed extension.
- Failing to contribute the capital on schedule as registered.
A fine of between VND 10,000,000 and VND 20,000,000 for acts of failing to contribute enough capital as registered.
A fine of between VND 25,000,000 and VND 30,000,000 for one of the following acts:
- Intentionally valuing assets to contribute capital improperly with the actual value.
- Conducting business as enterprise after having the business registration certificate revoked or after dissolution.
- Conducting business under the form of an enterprise without the registration of enterprise establishment.
IT IS VERY IMPORTANT TO NOTE
- The Foreign investors in an FDI enterprise are eligible to contribute their invested capital into the direct investment accounts only, shall not pay into the current accounts to avoid a lot of troubles in the following steps, especial in withdrawal capital, profit back to their home country.
- The payor names shall be the same with the investor names in the business licenses.
- The remitted capital shall be net amount only, and exactly with the capital in the business licenses.
- The capital can be paid in installments.
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