What do investors need to do when changing foreign direct investment capital? What conditions and procedures investors are required to implement? In the following article, NPLaw shall analyze some applicable legal regulations on change in foreign direct investment capital.
I/ Current state of changing foreign direct investment capital
Business investment is an activity bringing a large economical benefit to organizations and individuals. In the integration era, investment activities are becoming more and more popular both domestically and internationally. Especially, when the State applies many beneficial policies to attract and encourage investment. Not only foreign investors invest in Vietnam, but domestic investors also desire to use their capital sources for developing foreign direct investment.
II/ Change in foreign direct investment capital
1. What is foreign direct investment?
Clause 13, Article 3 of Law on Investment 2020 defines “foreign direct investment”, as follows: Foreign direct investment activities mean investors transfer investment capital from Vietnam to abroad, and use profits obtained from such an investment capital to implement business investment activities abroad.
Therefore, in summary, foreign direct investment means investors transfer investment capital from Vietnam to abroad to operate business investment abroad.
2. What cases are investors required to change foreign direct investment capital?
Change in foreign direct investment is based on investors’ needs and plans. Commonly, such a change will be conducted in some following cases:
- Enhancing investment capital: Projects need additional capital to expand and develop them, investors also may change capital sources to complete their projects.
- Changing members, shareholders or owners: Such a change can lead to increase or decrease in enterprises’ capital sources when implementing their projects.
- Changing objectives, operation scope or structures: If investors decide to change business objectives and scope, or structures of foreign direct investment projects, they can change their capital sources to reflect such a change.
III/ Legal regulations on changing foreign direct investment capital
1. Conditions on reissuance of the Offshore Investment Registration Certificate
Pursuant to Article 41 of Decree No. 31/2021/ND-CP: If the Investment Registration Certificate is lost or damaged, investors shall submit a written proposal applying for reissuance of the Investment Registration Certificate to the investment registration agency for such a reissuance within 05 working days from the date the agency receives the proposal.
Thus, reissuance of the Offshore Investment Registration Certificate shall also be implemented when it falls down in one of cases such as loss or damage.
2. Procedures for reissuance of the Offshore Investment Registration Certificate
Procedures for reissuance of the Offshore Investment Registration Certificate, as follows:
Step 1: Investors shall submit a written proposal applying reissuance of the Offshore Investment Registration Certificate to the agency issuing such a certificate through post office or direct at the agency’s headquarters.
Step 2: Within 05 working days from the date the investment registration agency receives the written proposal, the agency issuing the Offshore Investment Registration Certificate shall consider the reissuance of such a certificate to investors.
3. Necessary dossiers for reissuance of the Offshore Investment Registration Certificate
For re-issuance of the Offshore Investment Registration Certificate, investors need to prepare a written proposal applying reissuance of the Investment Registration Certificate to submit it to the competent agencies according to Clause 1, Article 41 of Decree No. 31/2021/ND-CP, as follows:
- If the Investment Registration Certificate is lost or damaged, investors shall submit a written proposal applying for reissuance of the Investment Registration Certificate to the investment registration agency for such a reissuance within 05 working days from the date the agency receives the proposal.
* The written proposal for reissuance of the Offshore Investment Registration Certificate according to Form No. B.I.15 in Circular No. 03/2021/TT-BKHDT.
IV/ Questions on changing foreign direct investment capital
1. Does changing foreign direct investment capital require adjustment of the Offshore Investment Registration Certificate?
Pursuant to Point c, Clause 1, Article 63 of Decree No. 31/2021/NP-CP, as follows:
- Investors implement procedures for adjusting the Offshore Investment Registration Certificate in some following cases:
- Changing foreign direct investment capital;
- Changing investment capital sources and methods.
Thus, when investors change foreign direct investment capital sources, they are required to implement procedures for adjusting the Offshore Investment Registration Certificate as defined by Law.
2. If investors fail the adjustment of the Offshore Investment Registration Certificate, how much will they be fined?
Pursuant to Point d, Clause 1, Article 21 of Decree No. 122/2021/ND-CP regulating the violation of implementing procedures for foreign direct investment, as follows:
- If investors fail to implement procedures for adjusting the Offshore Investment Registration Certificate in cases as prescribed by Law, they are subject to being fined from 50.000.000 VND to 70.000.000 VND.
Thus, if investors fail the adjustment of the Offshore Investment Registration Certificate as defined by Law, they shall be fined from 50.000.000 VND to 70.000.000 VND.
Above is NPLaw’s article analyzing some regulations on changing foreign direct investment capital sources. With professional lawyers and a team of specialists, NPLaw is willing to provide Clients with reputable and proficient legal services ensuring Clients’ the best legitimate rights and benefits.
