Investment capital account of foreign investors in Viet Nam
Investment capital account of foreign investors in Viet Nam
The original article Investment capital account of foreign investors in Viet Nam
Investment capital account is a type of payment account in Viet Nam dong or in a foreign currency opened by a foreign-invested enterprise at a bank allowed to carry out income and expenditure transactions related to investment activities in Viet Nam. Currently, there are two types of investment capital accounts, namely indirect investment capital account (IDICA) and direct investment capital account (DICA).
Depending on whether the form of investment is direct or indirect, investors will have to register for the appropriate account type. In this article, Nghiep Thanh Law will clearly show you the procedure for opening these two types of investment capital accounts.
1. Direct investment capital account (DICA)
*The following is the definition of this type of account:
“Direct investment capital account” is a payment account in foreign currency or in Viet Nam dong which is established by foreign direct investment enterprises (FDI enterprises), foreign investors open at banks allowed to perform transactions related to foreign direct investment activities in Viet Nam.[1]
Then, who will have to open this type of account? You may refer to Who needs to open DICA in Viet Nam.
After determining whether you are a direct investor or not, it is also important to know the regulations on opening capital accounts in what currency and how many capital accounts are allowed to open by foreign investors. Therefore, you must adhere to Guidelines for opening a direct investment capital account in Viet Nam.
When you know what type of capital account you will open, you will carry out the procedure to open a capital account, to make the procedure easy and not time-consuming, you need to prepare all documents required. Specific documents are mentioned in Procedures for opening a DICA in Viet Nam
2. Indirect investment capital account (IDICA)[2]
*Definition:
Indirect investment capital account means a payment account in Viet Nam dong opened by a foreign investor at a bank allowed to conduct income and expenditure transactions related to foreign indirect investment activities in Viet Nam.
Note: The bank allowed is a Commercial Bank, a foreign bank branch is allowed to do business and provide foreign exchange services.[3]
As well as the DICA, the subject of opening an IDICA is also regulated specifically. They are:
– Foreign investors who are non-residents and conduct indirect investment activities in Viet Nam.
– Organizations and individuals involved in foreign indirect investment activities in Viet Nam.
However, the methods of indirect investment must be one of these:
| 1. Contributing capital, purchasing and selling shares, and capital contributions of foreign investors in enterprises that do not fall into the cases specified in Article 3.2 of Circular 06/2019/TT-NHNN and documents of amendments and supplements (if any) have not been listed or registered for trading on the Stock Exchange. => That is, in case of failure to issue an investment registration certificate, new establishment, ownership of charter capital of less than 51%, PPP project. 2. Contributing capital, purchasing and selling shares in Vietnamese enterprises on the market for trading registration (UPCOM) and the listed stock market, and not directly participating in the management and administration of the enterprise. 3. Purchasing and selling bonds and other securities on Viet Nam’s stock market. 4. Trading in other valuable papers in Viet Nam dong issued by residents being organizations in the Vietnamese territory. 5. Investment trust in Viet Nam dong through fund management companies, securities companies, and organizations authorized to conduct investment entrustment operations in accordance with the provisions of the law on securities; investment trust in Viet Nam dong through credit institutions and foreign bank branches are allowed to perform investment trust operations in accordance with regulations of the State Bank. 6. Contributing capital, transferring contributed capital of foreign investors (not directly involved in management) in securities investment funds and fund management companies in accordance with the law on securities. |
If you are those cased listed above and you have made an indirect investment, you have to open an IDICA, following the procedure in the article Procedures for opening an indirect investment capital account in Viet Nam.
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Translator: Le Khanh Linh
Content writer: Nguyen Linh Chi
Instructor: Nguyen Minh Co
Admin: Lawyer Thuan
[1] Article 3.5 Circular 06/2019/TT-NHNN.
[2] Circular 15/2014/TT-NHNN.
[3]Article 2.1 Circular 16/2014/TT- SBV.
DỊCH VỤ TƯ VẤN PHÁP LÝ HỢP ĐỒNG, BẢO HIỂM XÃ HỘI TRONG LĨNH VỰC LAO ĐỘNG
