1. What is indirect investment?
Indirect investment refers to the investment in Vietnam by a foreign investor (“Investor”) under the following forms (“Indirect Investment”):
(i) capital contribution to, purchase and sale of shares, and capital contribution of enterprises not having any stocks listed or registered for transaction on the Stock Exchange and not subject to direct investment according to the provisions of Clause 2, Article 3 of Circular No. 06/2019/TT-NHNN;
(ii) capital contribution to, purchase and sale of shares, and capital contribution of enterprises having stock listed or registered for transaction on the Stock Exchange;
(iii) purchase and sale of bonds and other securities on the Vietnamese securities market;
(iv) purchase and sale of other valuable papers dominated in Vietnamese Dong issued by residents being organizations permitted to issue such papers within the territory of Vietnam;
(v) investment trust dominated in Vietnamese Dong through fund management companies, securities companies, and licensed organizations to carry out investment trust according to law and regulations on securities; investment trust dominated in Vietnamese Dong through credit institutions and foreign bank branches licensed to carry out investment trust in accordance with the regulations of the State Bank of Vietnam;
(vi) capital contribution, transfer of Investor’s contributed capital in securities investment funds and fund management companies according to law and regulations on securities;
(vii) other forms of Indirect Investment according to the applicable law.
2. What is the IICA?
The indirect investment capital account (“IICA”) is a payment account in Vietnamese Dong opened by the Investor at the licensed bank to conduct permitted transactions of collection of receivables and payment of payables related to Indirect Investment.
3. How many IICAs that the Investor permitted to open?
When conducting Indirect Investment, the Investor is only allowed to open only one (01) IICA at one (01) licensed bank at a time.
4. Is the Investor allowed to change the bank providing the IICA?
If the Investors do not wish to operate the IICA which they have opened with a licensed bank, they can open a new IICA with another licensed bank.
Where the Investors have opened a new IICA, the following must apply:
(i) the Investor must request the licensed bank in which the old IICA was opened to conduct the following work:
(A) close the old IICA; and
(B) transfer the entire balance from the old IICA to the new IICA.
(ii) The Investor shall only conduct transactions of collection of receivables and payment of payables on the newly opened IICA after the previously opened IICA has been closed and settled.
5. What transaction can be conducted through the IICA
The IICA is used for conducting transactions related to Indirect Investment, specifically as follows:
The transactions of collection of receivables
The following receivables must be collected via IICA:
(i) receivables incurred from the sale of foreign currencies to licensed credit institutions;
(ii) receivables denominated in Vietnamese Dong incurring from Indirect Investment from:
(A) the transfer of shares or capital contribution;
(B) the sale of securities, and other valuable papers;
(C) the dividend, interest on bonds, and valuable papers.
(iii) receivables of funds transfer from the Investor’s Vietnamese Dong-denominated payment account opened at the licensed bank;
(iv) receivables of funds transferred from the account of the fund management company, securities company, credit institution, and foreign bank branch licensed to conduct investment trust for the Investor (applicable in cases where the Investor conducts Indirect Investment under the form of investment trust);
(v) other lawful receivable in Vietnamese Dong conducted by the Investor related to Indirect Investment.
The transactions of payment of payables
The payment of the following payables must be conducted via IICA:
(i) payables for the implementation of the Indirect Investment under permitted forms by law;
(ii) payables for the purchase of foreign currency from licensed credit institutions to transfer capital, profits, and lawful incomes abroad;
(iii) payables of the lawful expenses incurred in Vietnam;
(iv) payables transfer of funds from the Investor’s Vietnamese Dong-denominated account to opened at the licensed bank to the new account (referred to the case mentioned in Section 5);
(v) payables of funds transferred from the account of the fund management company, securities company, and permitted organizations to conduct delegated investment for the Investor (applicable in cases where the Investor conducts Indirect Investment under the form of investment trust);
(vi) other lawful payables related to Indirect Investment.
6. What are the restrictions on the balance of the indirect investment capital account?
The Investor is not permitted to transfer the balance in the IICA to fixed-term deposits and savings at credit institutions or foreign bank branches.