Procedures for increasing investment capital of foreign - invested companies

In the process of implementing investment projects, in order to expand their business scale, many foreign-invested companies have a need to increase investment capital but encounter difficulties in the implementation order and procedures. If you need advice and support, you can contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479.

1. What is capital increase?

Increasing investment capital is the fact that an investor adds additional capital to the project, to the company, by mobilizing additional capital from existing members and shareholders of the company or calling for external investors to contribute capital. to the company or borrow capital, mobilize capital from other sources to expand production and business activities or maintain and restore the operations of company.

2. Forms of increasing investment capital

2.1. For a foreign-invested company operating under an Investment Registration Certificate and an Enterprise Registration Certificate:

The investment capital is recorded on the Investment Registration Certificate, also known as the Investment License, including 02 parts as follows:

• Contributed capital for project implementation: this is the capital contribution to implement the project, this is also part or all of the charter capital of the company.
• Mobilized capital: this is the capital that Investors are entitled to mobilize by borrowing from credit institutions, from shareholders, members of the company, from other entities or from other sources.

Therefore, the investment capital of the foreign-invested company on the Investment Registration Certificate in this case may be equal to or higher than the charter capital registered by the company on the Enterprise Registration Certificate.

Procedures for increasing investment capital of foreign - invested companies

Thus, the forms of increasing the investment capital in this case are:

• Increase capital contribution for project implementation: In this case, the existing investor contributes more capital to the company or receives additional capital from the new investor. When increasing this contributed capital, the Company also changes the charter capital and investment capital, so the Company must make adjustments to the Investment Registration Certificate and the Enterprise Registration Certificate.
• Increase in mobilized capital: In this case, the Investor borrows more capital from credit institutions, shareholders, company members, other entities or from other sources. When raising such additional capital, the charter capital does not change, only the investment capital changes, so the Company only needs to make adjustments to the investment registration certificate.

2.2. For foreign-invested companies operating only under the Certificate of Business Registration:

The investment capital of the company is also the charter capital of the company. The company increases capital in the same manner as the case of increase of contributed capital for the implementation of the project mentioned above.

3. Procedures for increasing investment capital.

Depending on each case, the procedures for increasing charter capital of foreign-invested companies are regulated differently, specifically as follows:

3.1. For foreign-invested companies operating under the Investment Registration Certificate and the Enterprise Registration Certificate

• Increase in contributed capital to implement the project:

Case 1: In the case of having to register for capital contribution under the provisions of the Investment Law 2020. The capital contribution increases the ownership ratio of foreign investor in economic organizations doing business in lines and trades with conditional market access for foreign investors; Foreign investors contribute capital, purchase shares, purchase capital contributions from economic organizations with land use right certificates in islands and border communes, wards and townships; coastal communes, wards and towns; other areas affecting national defense and security.

Case 2: Not in the case of having to register for capital contribution according to the provisions of the Investment Law 2020.

• Increase the mobilized capital of project:

As mentioned above, the increase in the mobilized capital of the project changes the total investment capital of the project but does not change the charter capital of the Company.

3.2. For foreign-invested companies operating only under the Certificate of Business Registration

Foreign-invested companies only operate under the Certificate of Business Registration. When increasing investment capital, there are 2 cases as follows:

• Case 1: The company must register to contribute capital in accordance with the provisions of the Investment Law 2020, then the Investor follows 3 steps:

Step 1: Register to contribute capital.

Step 2: Make capital contribution.

Step 3: Increase the charter capital on the Business Registration Certificate.

• Case 2: The company is not required to register for capital contribution under the provisions of the Investment Law 2020, the Investor directly increases capital and carries out procedures for increasing charter capital on the Certificate of Business Registration.

Procedures for increasing investment capital of foreign - invested companies

Above is a detailed guide on procedures for increasing investment capital of foreign invested companies. If you have any questions, please contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479 for the best support.

View more: Investment Lawyers in Vietnam

View more: Regulations on Investment Registration Certificates

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