An overview of requirements for legal capital for joint stock companies.

I. Understanding legal capital in a joint stock company

Legal capital refers to the minimum amount of capital that a company must have to legally operate under Vietnamese law. This capital threshold is mandated by competent state authorities at the time of enterprise registration and plays a critical role in the issuance of the Enterprise Registration Certificate.

Let’s explore the legal framework on legal capital for joint stock companies with NPLaw.

II. Legal regulations on legal capital in joint stock companies

1. What Is Legal Capital?

The Law on Enterprises 2020 does not provide a specific definition of this term. However, legal capital is commonly understood as the minimum amount of capital required to establish an enterprise.

It ensures the legitimacy and financial responsibility of the enterprise, serving to protect the legal rights and interests of consumers (customers) and business partners. Legal capital is also a prerequisite for obtaining an Enterprise Registration Certificate.

2. When does legal capital apply?

Legal capital requirements apply when a joint stock company registers for establishment and plans to operate in conditional business sectors as defined by Vietnamese law.

3. How is the legal capital amount determined?

The required legal capital is determined based on the relevant legal provisions and the business sector in which the company intends to operate. To determine the legal capital of a joint stock company, the following steps should be taken:

- Identify the business sector in which the company intends to operate;

- Review applicable laws, decrees, and circulars related to that business sector to determine the capital requirement;

- Ensure that the charter capital of the company is not lower than the required legal capital, as the charter capital must satisfy this condition to operate in regulated sectors.

4. Timeframe and procedure for legal capital contribution

For joint stock companies, if the registered charter capital equals the required legal capital, the company must ensure that all capital is fully contributed within 90 days from the issuance date of the Enterprise Registration Certificate.

Procedures for capital contribution include:

1. Shareholders commit to contribute capital and this commitment is recorded in the company’s charter;

2. Capital is transferred to the company’s bank account;

3. Contribution is proven with valid documents;

4. The company is registered with the Department of Planning and Investment;

5. The company must ensure full and timely contribution in compliance with regulations.

III. Questions about legal capital for joint stock companies

1. Is legal capital the same as charter capital?

No, legal capital and charter capital are different concepts. Here's a comparison:

Criteria	Legal Capital	Charter Capital
Definition	Not defined in the Law on Enterprises 2020; refers to the minimum capital required to establish a company	Defined in Clause 34, Article 4 of the Law on Enterprises 2020; the total value of assets contributed or committed by shareholders to establish the company
Applicability	Applies to certain regulated sectors	Applies to all company types
Amount	Fixed amount depending on the business sector	Flexible; no minimum or maximum required by law
Contribution Duration	Must be fully contributed before starting business	Must be fully contributed within 90 days from business registration
Change over time	Fixed, as defined by law	Adjustable, based on the company’s operational needs
Legal Document	Regulated by laws, decrees, circulars	Recorded in the company charter
Legal Meaning	Ensures the company’s legitimacy and capacity; protects stakeholders	Demonstrates shareholders’ financial commitment; basis for profit/loss distribution

2. Does legal capital differ between joint stock companies operating in different sectors?

Yes, legal capital requirements vary depending on the business sector, as well as the company’s scale and registration form. Below are examples of sectors with legal capital requirements:

No	Business Sector	Legal Capital Requirement	Legal Basis
1	Airport operation	VND 100–200 billion	Article 8, Decree 92/2016/ND-CP
2	Aviation services at airports	VND 30 billion	Clause 1, Article 17, Decree 92/2016/ND-CP
3	Health insurance business	VND 300 billion	Clause 3, Article 10, Decree 73/2016/ND-CP
4	Auditing services	VND 6 billion	Clause 1, Article 5, Decree 84/2016/ND-CP
5	Securities brokerage	VND 25 billion	Decree 155/2020/ND-CP
6	International travel services (outbound tourism)	VND 100 million	Decree 168/2017/ND-CP, amended by Decree 94/2021/ND-CP

3. Does the capital contribution to a joint stock company need to be certified? If so, where do I submit the application for certification?

According to the Law on Enterprises 2020 and Decree 01/2021/ND-CP, legal capital contributions do not need to be certified by state authorities. However, several compliance measures are required:

- Capital Contribution Agreement: Shareholders must commit to contributing capital and fulfill obligations per the company charter and capital contribution contracts;

- Contribution Documentation: While state certification is not required, the company must maintain valid documents such as:

+ Receipts for capital transfers;

+ Bank confirmations of fund deposits to the company’s account;

- Verification During Registration: When the company submits its establishment dossier to the Department of Planning and Investment, the capital contribution will be verified through the charter, shareholder list, capital contribution records, etc.;

- Procedures of Capital Contribution: After obtaining the Enterprise Registration Certificate, the company must prove that shareholders have fully contributed capital through documentation evidencing cash or asset transfers.

IV. Legal consulting services for legal capital of joint stock companies

The above information provides a comprehensive overview of legal capital requirements for establishing a joint stock company. For any further inquiries or legal support, please contact NPLaw at: