Assets for Capital Contribution under Vietnamese Law

Dear Client,

Regarding your question concerning the types of assets that can be used for investment in Vietnam, DB Legal would like to respond as follows:

According to Clause 1, Article 28 of Decree No. 31/2021/NĐ-CP dated March 26, 2021, which details and guides the implementation of several articles of the Law on Investment (hereinafter referred to as Decree 31), a foreign investor may contribute capital to implement an investment project using the following types of assets:

1. Investor's contributed capital, which can be in the form of cash, machinery, equipment, the value of intellectual property rights, technology, technical know-how, the value of land use rights, or other assets as stipulated by civil law and international investment treaties.

2. Mobilized capital to implement the investment project.

3. Retained profits of the investor used for reinvestment (if any).

Furthermore, the contribution of charter capital to an enterprise is specifically regulated in Clause 1, Article 35 of the Law on Enterprises 2020 as follows:

Article 35. Capital contribution for company establishment and issuance of capital contribution certificates

Members of a limited liability company or partnership and shareholders of a joint-stock company must contribute capital to the company in full and with the correct type of assets as committed when registering the enterprise, within a period of 90 days from the date of issuance of the Enterprise Registration Certificate. This period does not include the time required for transporting or importing the contributed assets, or for carrying out administrative procedures to transfer ownership of the assets. Within this period, members and shareholders shall have rights and obligations corresponding to the committed capital contribution ratio.

To ensure legality and transparency, Article 36 of the Law on Enterprises 2020 also regulates the types of assets and the transfer of their ownership as follows:

Article 36. Assets for capital contribution

1. Assets for capital contribution include Vietnamese Dong, freely convertible foreign currencies, gold, the value of land use rights, the value of intellectual property rights, technology, technical know-how, and other assets that can be valued in Vietnamese Dong.

2. Only individuals and organizations that are the lawful owners or have the lawful right to use the assets specified in Clause 1 of this Article shall have the right to use such assets for capital contribution in accordance with the law.

Conclusion

Based on the regulations cited above, a foreign investor can indeed use a wide variety of assets to contribute capital for investment in Vietnam, ranging from cash to non-tangible assets like the value of land use rights and intellectual property.

However, it is crucial to note that contributing capital with non-monetary assets must strictly comply with the regulations on valuation and transfer of ownership as stipulated in the Law on Enterprises to ensure legality and transparency. Additionally, investors must prepare all relevant documents proving ownership of the contributed assets as part of their investment registration dossier.

This is DB Legal's response to your inquiry. Should you have any further questions, please do not hesitate to contact us for support.

Sincerely,

DB Legal

The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.

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