As Vietnam continues to attract strong FDI inflows, foreign investors increasingly choose to contribute capital, purchase shares, or acquire equity in existing Vietnamese companies. This method is popular due to its flexibility, fast processing time, and the fact that it does not require establishing a new legal entity. However, to ensure full legal compliance and long-term protection of interests, investors must understand the conditions, ownership limits, and specific procedures involved. The following guide provides detailed instructions.
1. Who Are Foreign Investors?
Definition under the Law on Investment
According to Vietnam’s 2020 Law on Investment, a foreign investor is an individual holding foreign nationality or an organization established under foreign law that conducts investment or business activities in Vietnam. These investors are subject to specific legal regulations different from domestic investors, particularly regarding market access conditions, ownership ratios, and investment registration procedures.
Types of Foreign Investors
Foreign investors are divided into two main categories: individuals and organizations. Individual investors are foreign nationals with valid passports and legal residence in Vietnam. Organizational investors include companies, corporations, investment funds, or financial institutions legally established abroad. Each category has distinct conditions and investment methods depending on their operational model in Vietnam.
Role of Foreign Investors in Vietnam
Foreign investors play a vital role in driving Vietnam’s economy by contributing capital, transferring technology, creating jobs, and expanding international markets. Their growing participation in strategic industries enhances the competitiveness of domestic enterprises and promotes Vietnam’s global economic integration.
Legal Regulations for Foreign Investors
Foreign investment activities are governed by the Law on Investment, the Law on Enterprises, the Law on Securities, and international treaties to which Vietnam is a party. Certain sectors may impose ownership limits or require a Vietnamese partner in compliance with WTO Commitments or Free Trade Agreements (FTAs). Strict adherence to these regulations ensures the legality and long-term stability of investment projects in Vietnam.
Read more: Detailed Guide on Investing in Vietnam for Foreign Investors
2. What Is Capital Contribution by Foreign Investors?
Forms of Capital Contribution
Capital contribution is an indirect investment form permitted under Vietnamese law, where foreign investors inject money or assets into an enterprise to become its member or shareholder. Common methods include contributing capital to establish a limited liability company (LLC) or partnership, or purchasing shares in a non-listed joint stock company. This flexible investment method allows quick market entry without forming a new legal entity.
Conditions for Contributing Capital to a Vietnamese Company
Foreign investors may contribute capital to Vietnamese companies as long as the company’s business activities are not in sectors prohibited or restricted to foreign investment. Investors must demonstrate financial capacity, maintain a transparent background, and comply with foreign exchange regulations. In certain specialized sectors, additional requirements may apply—such as technical qualifications, security standards, or the involvement of a Vietnamese partner.
Ownership Ratios under Current Regulations
Under the Law on Investment 2020 and related guidance, foreign investors may own up to 100% of charter capital in many industries. However, specific sectors—such as transportation, media, banking, and others subject to WTO commitments—impose ownership limits. The exact ratio depends on Vietnam’s international service commitments and specialized legal provisions.
Cases Requiring Registration with Authorities
If a capital contribution results in foreign investors holding 50% or more of the company’s charter capital, or if the investment involves national defense or security concerns, registration with the Department of Finance is required. The application typically includes an investment agreement, the investor’s legal documents, and relevant company information. The average processing time is around 15 working days.
3. What Is Share Acquisition by Foreign Investors?
Purchasing Shares in a Joint Stock Company
Share acquisition is a common form of investment for foreign investors wishing to participate in an established Vietnamese joint stock company. They may purchase shares from existing shareholders or subscribe to newly issued shares. This allows investors to quickly enter the market while leveraging the target company’s existing operations and customer base. Share purchases are permitted in most industries, except for those restricted under international commitments.
Purchasing Capital Contributions in a Limited Liability Company (LLC)
For LLCs, foreign investors can acquire capital contributions from existing members to become new capital-contributing members. This typically applies to multi-member LLCs or single-member LLCs seeking to transfer part of their ownership. After the transaction, if the number of members exceeds two, the company must convert its legal structure accordingly. The transfer must be registered with the Department of Planning and Investment to officially update the company’s ownership records.
Legal Restrictions on Transfers
Although share and capital transfers are lawful, foreign investors must comply with ownership limits, sector-specific conditions, and capital transfer regulations. Certain industries impose requirements on financial capability, national security control, or minimum Vietnamese ownership ratios. Additionally, compliance with tax declaration, transaction valuation, and financial reporting obligations is mandatory.
Market Access Conditions and Vietnamese Partnership Requirements
Depending on the business sector, foreign investors may be subject to specific market access conditions under Vietnam’s WTO Commitments or Free Trade Agreements (FTAs). Some sectors require joint ventures with Vietnamese partners or impose maximum ownership limits. Therefore, before acquiring shares or capital, investors should review the industry regulations and verify the legal status of their Vietnamese partners to ensure a compliant and effective transaction.
4. Procedure for Capital Contribution or Share Purchase by Foreign Investors
Step 1: Prepare and Compile the Application file
Before proceeding with the investment, foreign investors must prepare a complete legal application file for capital contribution or share acquisition registration. The application file typically includes: an application for capital contribution/share purchase; a copy of the investor’s passport or business registration certificate; the capital transfer or investment agreement; a copy of the target company’s business registration certificate; and land use right certificates (if applicable). Depending on the industry and ownership ratio, additional documents may be required to demonstrate market access eligibility.
Step 2: Submit the Application file to the Department of Finance
The application file is submitted to the Department of Finance where the target company is headquartered. Upon receipt, the authority reviews the application file for completeness and compliance with Vietnamese law, WTO commitments, and relevant international treaties. The standard processing time is approximately 15 working days from the date of receiving a valid application file. If documents are incomplete, the authority will request amendments or supplements.
Step 3: Update Membership/Shareholder Information at the Business Registration Office
Once approved, the target company must update its shareholder or member records with the Business Registration Office of the same jurisdiction. This step requires submission of: the resolution and meeting minutes of the Members’ Council or General Meeting of Shareholders; the new investor’s personal or legal documents; the transfer agreement; and related paperwork. After completion, the foreign investor officially becomes a lawful member or shareholder of the Vietnamese enterprise.
Notes on Processing Time, Fees, and Additional Requirements
Processing time and costs may vary by locality and transaction complexity. Government fees include application submission and company information update charges. Some sectors may also require additional approvals, such as consent from line ministries, special business licenses, or security clearances from the Ministry of National Defense or Ministry of Public Security. Therefore, investors should prepare documentation carefully and seek assistance from professional consultants to ensure compliance and timely completion.
5. Foreign Investment Consulting Services at Thanhlap.wacontre.com
Advisory on Investment Policies and Forms
With a team of seasoned experts in foreign investment, Thanhlap.wacontre.com provides comprehensive consulting services on legal policies and investment structures tailored to each investor’s goals and capabilities. We assist clients in evaluating the advantages of capital contribution, share acquisition, or establishing a new enterprise, while clearly explaining legal obligations, benefits, and restrictions applicable to foreign investors in Vietnam.
Read more: Services Of Company And Enterprise Establishment
Guidance on Documentation and Legal Procedures
We assist in drafting, reviewing, and submitting all required legal documents — from the initial investment registration to changes in shareholders or members of the enterprise. Our services include detailed guidance for each document type, submission to the Department of Planning and Investment, representation before government authorities, and handling of any issues arising during the approval process.
Representation Before Government Authorities
To minimize risks and save time for investors, the legal team at Thanhlap.wacontre.com directly works with relevant agencies such as the Business Registration Office, the Department of Planning and Investment, tax authorities, and other government departments. This allows clients to focus on business operations without the burden of complex administrative procedures.
Post-Registration Services: Accounting, Tax, and Legal Support
Beyond completing initial investment procedures, we also provide post-registration services including accounting and tax compliance, financial reporting, labor consulting, and corporate legal advisory. With long-term support, Thanhlap.wacontre.com is committed to helping businesses operate smoothly, comply with legal requirements, and maximize investment efficiency in Vietnam.
Read more: Newly Established Company Services
Capital contribution or share acquisition is a flexible and cost-effective investment method, ideal for foreign investors seeking quick market entry in Vietnam without establishing a new company. However, to ensure legal compliance and long-term protection of interests, investors must clearly understand market access conditions, ownership limits, and the required procedures with competent authorities.
If you have any questions, please contact our Hotline at (028) 3820 1213 or email us at [email protected] for prompt consultation and support. With an experienced team, Service thanhlap.wacontre.com is always ready to serve customers in the most enthusiastic and efficient manner. (For Japanese customers, please contact Hotline: (050) 5534 5505).
