Foreign investors must transfer money in and out through the Direct Investment Capital Account (DICA) for investment capital contribution.
FDI enterprises, foreign investors participating in business cooperation contracts, foreign investors implementing investment activities in Vietnam in the direct foreign investment forms in accordance with current provisions of law on investment should comply with the provisions of the investment law when making investment and transfer the capital into Vietnam implementing FDI activities in Vietnam, through setting up company.
The capital contribution in cash of foreign investors and Vietnamese partners in FDI enterprises must be made through transferring to the DICA, either in foreign currencies or Vietnam dong, which are opened by FDI enterprises and foreign investors participating in a business cooperation contract at an authorized credit institution in order to perform the relevant transaction to the FDI activities in Vietnam. From DICA account, the investor could then transfer into transaction bank accounts opened in a commercial banks in Vietnam.
The transfer of investment capital before being granted investment certificate into Vietnam and the transfer of capital abroad in case of not being granted investment certificate of foreign investors shall be complying with the provisions of the relevant regulations.
After being granted the investment certificate, the accounting of pre-establishment costs of FDI enterprises into equity or foreign loans is made on the basis of agreement between the involving parties, ensured to comply with current provisions of Vietnamese law and regulations on accounting, borrowing, repayment of foreign debts of enterprises and other relevant provisions of Vietnamese law and regulations. In case the foreign investors do not use all the investment capital transferred into Vietnam to satisfy the legal costs for the preparatory phase of investment, foreign investors can buy foreign currency and transfer the remaining investment capital abroad in foreign currency on the basis of the issuing records and documents evidencing investment capital transferred into Vietnam and the expenses incurred for investment projects in Vietnam.
In case foreign investors had moved investment capital into Vietnam to satisfy the legal costs for the preparatory phase of investment in Vietnam but were not granted the investment certificate by Vietnamese competent agencies, foreign investors are allowed to transfer the investment capital transferred abroad after deducting the expenses incurred in relation to the preparation of direct investment projects in Vietnam. The investment capital transferred abroad by foreign investors shall not exceed the maximum investment capital transferred into Vietnam and the amount of interest of non-term loans incurred (if any). Foreign investors are allowed to buy foreign currency and transfer abroad the investment capital transferred into Vietnam in accordance with valid documents proving the amount of investment capital transfer red into Vietnam and legitimate expenses incurred in relation to the preparation of investment projects in Vietnam.
Along with that, foreign investors are allowed to transfer abroad the charter capital, direct investment capital upon termination of operations (due to ending, the liquidation or the dissolution of the enterprise before maturity), interest and foreign loans, profits and other lawful income relating to operations of FDI activities in Vietnam through the DICA. In case FDI enterprises and foreign investors participating in business cooperation contracts have to close the DICA due to ending, liquidation, dissolution which lead to the termination of FDI activities in Vietnam or conduct investment capital transfer resulting in alteration of the initial legal person of FDI enterprises, foreign investors are allowed to use their DICA, either in foreign currency or in Vietnam dong, opened at authorized credit institutions in order to transfer direct investment capital and legitimate income abroad legally.
Moreover, FDI enterprises and foreign investors can use legitimate income sources in Vietnam dong or foreign currency gained from operations of FDI activities in Vietnam to perform re-investment activities in Vietnam. Simultaneously, they also have the right to use such income sources to purchase foreign currency at an authorized credit institution and transfer abroad within 30 days since the date of buying foreign currency.
The credit institutions have the right to require FDI enterprises and foreign investors to provide legal records and proofs relating to the FDI activities in Vietnam. They are also responsible for regulating, inspecting and storing the documents appropriate with the revenue and expenditure transactions of the DICA of foreign investors to ensure the revenue and expenditure transactions are made complying with the stipulations of this Circular and in accordance with the relevant provisions of the Vietnamese law and regulations; and selling foreign currency to foreign investors to transfer abroad on the basis of foreign currency balances of credit institutions.
The laws on investment in Vietnam will continue be adjusted to encourage investment into various sectors of the economy. The changes of laws will be monitored by ANT Lawyers Foreign Investment Practice in Hanoi, Da Nang and Ho Chi Minh City to provide clients with updates.