Legal procedures for foreign companies’ requests to withdraw capital

In the context of international economic integration, many foreign companies investing in Vietnam may wish to withdraw capital or terminate their investment for various reasons such as investment restructuring, changes in business strategy, or optimization of resources after a period of operation. However, foreign companies’ requests to withdraw capital in Vietnam is not merely a financial matter but also involves complex legal procedures.

I. Current situation of foreign companies’ requests to withdraw capital 

In recent years, Vietnam has become an attractive destination for foreign investors due to its dynamic business market, incentive investment policies, and stable economic growth. However, the need for foreign companies to withdraw capital has also emerged for various reasons, including changes in investment strategies, corporate restructuring, or mergers and acquisitions.

In practice, capital withdrawal by foreign investors in Vietnam is not straightforward and often involves legal challenges and administrative procedures. Common issues include:

• Complex administrative procedures: It needs to implement multiple steps involving investment authorities, banks, and tax authorities.
• Foreign exchange conversion and capital repatriation requirements: Capital withdrawal must comply with foreign exchange regulations and rules on remittance of profits abroad.
• Tax obligations: Foreign companies must fully fulfill tax obligations related to profits, dividends, or compensation payments.
• Risks of internal disputes: Capital withdrawal may give rise to disputes among shareholders, joint venture partners, or other related parties.

Overall, although Vietnam offers many favorable opportunities, foreign companies need to clearly understand the legal procedures and associated risks when withdrawing capital in order to ensure legal compliance and protect their investment interests.

II. What does it mean for a foreign company’s request to withdraw capital?

During the investment process in Vietnam, foreign companies may have a request to withdraw capital, meaning the withdrawal of part or all of the capital invested in a Vietnamese enterprise. Such an activity involves not only the recovery of financial resources but also legal procedures, tax obligations, foreign exchange conversion, and regulations on shareholder protection. Understanding the concept, reasons, and required documents is an essential first step toward lawful and effective capital withdrawal.

1. Common reasons why foreign companies request to withdraw capital from the Vietnamese market

Common reasons for foreign companies to withdraw capital from Vietnam include:

• Changes in business strategy: Enterprises may wish to restructure investments or shift their objectives to other markets or industries.
• Low business performance: Business operations in Vietnam fail to meet expectations regarding profitability or market share.
• Market fluctuations or economic risks: It includes policy changes, intensified competition, or exchange rate volatility.
• Mergers, acquisitions, or capital transfers: It leads to a need to reallocate resources.

Identifying the reasons for capital withdrawal helps enterprises choose an appropriate withdrawal method and prepare the necessary legal procedures.

2. What documents must a foreign company prepare when requesting to withdraw capital?

A foreign company requesting to withdraw capital must prepare documents including:

• Resolution of the board of directors or shareholders: Approving the capital withdrawal and specifying the withdrawal method.
• Documents relating to the Vietnamese enterprise: Investment Registration Certificate, Enterprise Registration Certificate, and dossiers for capital adjustment registration.
• Tax records and financial statements: Confirmation that tax obligations have been fully fulfilled, including corporate income tax and value-added tax (VAT), if applicable.
• Documents related to foreign exchange conversion: Dossiers submitted to banks to conduct remittance abroad in accordance with regulations of the State Bank of Vietnam.
• Relevant contracts and agreements: It includes joint venture agreements and shareholders’ agreements, ensuring the rights and interests of all related parties.

Proper preparation of documents and procedures is a critical step to ensure that capital withdrawal is conducted lawfully, transparently, and with minimal dispute risk.

III. Legal regulations on foreign companies’ requests to withdraw capital

Capital withdrawal by foreign companies in Vietnam is not only a financial procedure but is also governed by numerous important legal regulations. Understanding these regulations enables enterprises to withdraw capital lawfully, minimize risks, and protect investors’ rights and interests.

1. Main regulations to note regarding foreign companies’ requests to withdraw capital

Important legal regulations that foreign companies should take into account include:

• Law on Investment 2020, as amended in 2025: Provisions on adjustment of investment projects (Article 41); authority to amend Investment Registration Certificates (Article 39); and related regulations.
• Law on Enterprise 2020, as amended in 2025: Registration of changes to enterprise registration contents (Article 30), including changes in business lines; transfer of ownership of contributed capital assets (Article 35); and related provisions.
• Circular No. 186/2010/TT-BTC guiding the remittance of profits abroad by foreign organizations and individuals earning profits from direct investment in Vietnam: Determination of remittable profits (Article 3); notification of profit remittance abroad (Article 5); and related provisions.
• Other relevant legal documents such as the Law on Tax Administration 2019, the Law on Corporate Income Tax 2025, and Circular No. 06/2019/TT-NHNN on foreign exchange management for foreign direct investment activities.

A thorough understanding of these regulations helps foreign companies withdraw capital in compliance with the law, safeguard their interests, and avoid disputes or sanctions. 

2. How is the capital withdrawal procedure for foreign companies in Vietnam regulated?

The capital withdrawal process for foreign companies in Vietnam generally consists of the following basic steps:

• Step 1: Decision on capital withdrawal: The board of directors or shareholders approve the withdrawal, specifying the amount and method of withdrawal.
• Step 2: Submission of dossiers for registration of changes to the Enterprise Registration Certificate in accordance with Article 30 of the Law on Enterprise 2020, as amended in 2025.
• Step 3: Fulfillment of tax obligations: Payment of taxes related to profits, dividends, corporate income tax, and other financial obligations.
• Step 4: Remittance of capital abroad: Completion of banking procedures in compliance with foreign exchange regulations of the State Bank of Vietnam.
• Step 5: Update of enterprise dossiers: Adjustment of charter capital registration, update of shareholder information and related documents with the business registration authority.

Proper implementation of the capital withdrawal process enables enterprises to complete lawful procedures, protect their interests, and minimize legal risks.

IV. Questions regarding foreign companies’ requests to withdraw capital

1. How are the rights of foreign companies protected when withdrawing capital?

The rights of foreign companies withdrawing capital are protected under the Law on Enterprise 2020, as amended in 2025, including:

• Multi-member limited liability companies: Pursuant to Article 50 of the Law on Enterprise 2020, members of a multi-member limited liability company are not permitted to withdraw capital in any form, except where they request the company to redeem their capital contribution, transfer their capital contribution to another person, or in certain special cases.
• Joint-stock companies: Pursuant to Article 119 of the Law on Enterprise 2020, shareholders are not allowed to withdraw capital contributed in the form of ordinary shares under any circumstances. Shareholders may only withdraw their investment through the following means: The company refunds part of the capital contribution in proportion to share ownership according to a resolution of the General Meeting of Shareholders (Clause 5 Article 112 of the Law on Enterprises 2020); shareholders transfer of shares to another person (except as provided in Clause 3 Article 120 of the Law on Enterprise 2020); or shareholders request the company to redeem shares (Article 132 of the Law on Enterprise 2020).
• Partnerships: Pursuant to Article 185 of the Law on Enterprise 2020, a general partner has the right to withdraw capital from the partnership subject to approval by the Members’ Council. In such cases, the partner must give written notice at least six months prior to the withdrawal date and may only withdraw capital at the end of the fiscal year after the financial statements for such a year have been approved.

Understanding these rights allows investors to proceed with capital withdrawal with confidence and to plan for optimal returns.

2. What difficulties may foreign companies encounter during the capital withdrawal process?

Foreign companies seeking to withdraw capital may encounter difficulties such as:

• Complex administrative procedures: Capital withdrawal dossiers require various documents such as shareholder resolutions, tax records, and Investment Registration Certificates; omissions may delay or result in rejection of applications.
• Tax and financial obligations: Investors must fulfill taxes arising from profits, dividends, or capital transfers; failure to do so may result in suspension of capital withdrawal by authorities.
• Foreign exchange challenges: Remittance abroad is subject to exchange rate regulations, foreign currency quotas, and approvals of the State Bank of Vietnam.
• Internal disputes: Capital withdrawal through share transfers or mergers may lead to disputes among shareholders or joint venture partners regarding share valuation, rights, and obligations.

Identifying these challenges in advance helps enterprises prepare appropriate documentation, ensure legal compliance, and minimize dispute risks.

3. What happens if a foreign company wishes to withdraw capital but has not fulfilled its financial obligations?

All tax and financial obligations must be fulfilled prior to capital withdrawal, including corporate income tax, capital transfer tax, and related fees. If such obligations remain outstanding, the competent authorities may suspend the withdrawal, and the investor may be subject to administrative sanctions or late payment interest.

4. Are there cases where a foreign company’s request to withdraw capital is denied, and what should the company do?

A foreign company’s request to capital withdrawal may be denied in cases such as:

• Incomplete dossiers or inaccurate information.
• Outstanding tax obligations.
• Violations of investment laws or conditions for capital transfer.

In such cases, the company should promptly take measures including supplementing documents, completing tax obligations, and coordinating with competent authorities for approval. In complex situations, engaging legal experts is advisable to ensure proper handling of the dossier in accordance with applicable procedures.

Full compliance with legal requirements and submission of valid documents enable investors to overcome refusals and safeguard their interests.

5. What forms of capital withdrawal are available to foreign companies?

Foreign companies may withdraw capital through the following forms:

• Remittance abroad: Withdrawing contributed capital, profits, or dividends to overseas accounts via banks in compliance with foreign exchange regulations.
• Share transfer: Selling all or part of shares to domestic shareholders or third-party investors, accompanied by registration of changes in capital and shareholder information.
• Combination of both forms: Receiving capital in cash or by transfer while transferring shares, depending on investment strategy.

Selecting a withdrawal method consistent with investment strategy helps optimize benefits while ensuring compliance with Vietnamese law.

V. Do you need legal expertise to support a foreign company in withdrawing capital?

Capital withdrawal by foreign companies in Vietnam involves complex procedures and numerous legal regulations on investment, taxation, foreign exchange, and shareholder responsibilities. NPLaw can accompany and support enterprises by:

• Providing detailed consultation on capital withdrawal procedures, from document preparation and shareholder resolutions to working with investment authorities, banks, and tax agencies.
• Ensuring fulfillment of legal obligations, including tax payments and completion of financial statements, while safeguarding shareholder rights.
• Optimizing capital withdrawal methods in line with investment strategy and applicable laws.

With professional legal support, foreign companies can withdraw capital efficiently, lawfully, and with minimized legal risks in the Vietnamese market.