When the enterprise decides to expand its operation abroad, it is not only about entering new markets but also about facing the unique legal challenges of each country and Vietnamese law. With Vietnamese law, outward investment activities are currently being managed quite strictly for the Government to control cash flow as well as evaluate the effectiveness of investment activities. Therefore, in addition to some enterprises having favourable conditions in performing the outward investment procedures, many enterprises are confused about how to meet the conditions prescribed by Vietnamese law to transfer capital abroad to do business. In the context of this article, we will guide you through the steps you need to take to be able to transfer money abroad through investment activities outside of Vietnam.
- Follow the procedures for issuance of outward investment registration certificate
If the investment project is not subject to approval for its investment guidelines, the investor shall prepare a dossier including:
- An outward investment registration form;
- A document about the investor's legal status;
- An outward investment decision;
- The document specifying the location of the outward investment project (similar to an investment project falling under the Prime Minister's authority to approval its investment guidelines);
- The document specifying the form of outward investment (similar to an investment project falling under the Prime Minister's authority to approval its investment guidelines);
- A commitment to balance sources of the foreign currency or a commitment of an authorized credit institution to provide foreign currency for the investor. If the investor submits a commitment to balance foreign currency sources, a credit institution's certification of the balance of the investor's foreign currency account must be enclosed;
- The tax authority's certification of the investor's fulfilment of the tax payment obligation;
- The approval document issued by a competent authority for outward investment in the fields of banking, securities, insurance, real estate business, press-radio-television (if any).
Within 05 working days from the receipt of the application, The Ministry of Planning and Investment shall inspect the validity of the application; if the application is invalid or has to be clarified, the Ministry of Planning and Investment shall notify the investor.
If the amount of foreign currency capital transferred overseas is VND 20 billion or more and does not belong to the project specified in Article 56 of the Investment Law, the Ministry of Planning and Investment shall request the State Bank of Vietnam in writing to provide opinions. If the outward investment project involves press, radio or television, the Ministry of Planning and Investment shall send a written request for opinions to the Ministry of Information and Communications.
Within 07 working days from the receipt of the written request for opinions, the State Bank of Vietnam shall give the Ministry of Planning and Investment a written response.
Within 15 days from the date of receiving the valid application, the Ministry of Planning and Investment shall issue the outward investment registration certificate; in case of refusal to issue the outward investment registration certificate, the Ministry of Planning and Investment shall send the investor a written notification of its refusal to issue the outward investment registration certificate, and reasons therefore.
- Carry outthe registration of outward investment-related forex transactions
After being granted the Certificate of Outward Investment registration, investors shall open 01 investment capital account in 01 foreign currency suitable to the need to transfer investment capital abroad at 01 licensed credit institution and carry out the registration of outward investment-related forex transactions with the State Bank of Vietnam.
The application for the registration of outward investment-related forex transactions consists of:
- The application form for the registration of outward investment-related forex transactions (using the form stated in Annex No. 01 herein).
- The copy which originated from the master register or certified copy or copy, enclosed with the original for comparison, of Investment License or Certificate of outward investment or Certificate of the outward investment registration issued by competent authorities of Vietnam. The person making the comparison of the copy with the original thereof, if any, shall verify the accuracy of the copy with its original.
- The copy in a foreign language, and the translation into Vietnamese (with the investor's confirmation of the accuracy of such copy, and translation) of the written approval or the investment permit issued by the host country or the document proving that the investment activities executed in the host country are conformable with the host country's law.
- The original certificate of the investor's investment capital account granted by the licensed credit institution, including account number, and type of foreign currency.
- The original certificate granted by the licensed credit institution to certify the amount transferred abroad by the investor before the investor obtains the Certificate of outward investment registration. This is to cover expenditures for activities related to the forming of such investor's investment project abroad in compliance with laws in cases where the investment capital is transferred abroad before having a Certificate of Outward Investment registration granted.
- The written explanation about the transfer of investment capital in VND to foreign countries in cases where the investment capital in VND is transferred abroad.
Within 10 working days from the date on which the valid application is received, the State Bank of Vietnam shall confirm or refuse to confirm the investor's registration of outward investment-related forex transactions in the form of paper documents or electronic documents.
- Transfer of investment capital overseas
After completing the registration of outward investment-related forex transactions, investors will proceed to transfer investment capital overseas to carry out outward investment activities. The transfer of investment capital overseas must comply with regulations of law on foreign exchange management, export and technology transfer, and relevant regulations of law.
- Reporting of outward investment activities
Investors executing outward investment projects must follow the reporting regime as follows:
Within 60 days from the day on which the project is approved or licensed as prescribed by the law of the host country, the investor shall send a written notification of outward investment enclosed with a copy of the written approval for the investment project or a document proving the right to invest in the host country to the Ministry of Planning and Investment, the State Bank of Vietnam, and a representative mission of Vietnam in the host country.
Investors shall submit quarterly, and annual reports on the operation of their investment projects to the Ministry of Planning and Investment, the State Bank of Vietnam, and a representative mission of Vietnam in the host country.
Within 06 months from the day on which the tax declaration or an equivalent document is available as prescribed by the host country's law, the investor shall submit a report on the operation of the investment project enclosed with the financial statement, tax declaration, or an equivalent document prescribed by the host country's law to the Ministry of Planning and Investment, the State Bank of Vietnam, the Ministry of Finance, a representative mission of Vietnam in the host country, and a competent authority prescribed in this Law and relevant regulations of law.
Form: done in writing and through the National Investment Information System.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
