Direct investment capital account mean a payment account in foreign currency or Vietnam dong opened by a foreign direct investment enterprise or a foreign investor at an authorized bank to perform the transactions related to foreign direct investment activities in Vietnam in accordance with provisions in Article 5, Article 6 and Article 7 of the Circular 06/2019/TT-NHNN.
A. Foreign direct investment enterprise
Under Article 3.2 Circular 06/2019/TT-NHNN, Foreign direct investment enterprise includes:
- Enterprises that are established in the form of investment for establishment of economic entities whose foreign investor is a member or shareholder and who are required to follow the procedures for issuance of investment registration certificate in accordance with laws and regulations on investment;
- The enterprises that are not regulated in Point a hereof with 51% or more of charter capital held by a foreign investor, including:
(i) An enterprise with a foreign investor contributing capital, buying shares where the capital contributed to the enterprise (operating in either conditional or unconditional business lines as applicable to foreign investors) leads to the foreign investor holding 51% or more of charter capital of the enterprise;
(ii) An enterprise being established after split, merger, consolidation which leads to the foreign investor holding 51% or more of charter capital of the enterprise;
(iii) An enterprise being established under the regulation on specialization fields.
- A project enterprise that is established by a foreign investor for the purpose of a PPP project in accordance with laws and regulations on investment.
B. Receipt and payment transactions on the direct investment capital account in foreign currency
Under Circular 06/2019/TT-NHNN, the receipt and payment transactions of enterprise on the direct investment capital account in foreign currency comprise:
- Receipt transactions:
- a) Receipt of transfer of foreign direct investment capital contribution in foreign currency from foreign investors, Vietnamese investors in foreign direct investment enterprises, foreign investors participating in BCC contracts, foreign investors directly performing PPP projects;
- b) Receipt of transfer of payment of investment capital, investment projects as prescribed in Article 10 of Circular 06/2019/TT-NHNN;
- c) Receipt of transfer of foreign currency bought from authorized credit institutions to remit capital, profits and legal incomes abroad in accordance with provisions of Circular 06/2019/TT-NHNN;
- d) Receipt of transfer from a foreign currency payment account opened at an authorized bank of the foreign direct investment enterprise, a foreign investor participating in a BCC contract or a foreign investor directly performing a PPP project for the purpose of offshore remittance of capital, profit and legal income to the foreign investor; dd) Receipt of foreign currency conversion for making investment capital contribution in case where the currency of capital contribution is different from the currency of the opened direct investment capital account;
- e) Receipt of transfer of share capital surplus from the issuance of new shares to increase charter capital in the foreign direct investment enterprise;
- g) Receipts of transfers of foreign currency received from the sales of domestic petroleum products (after fulfilling all financial obligations and subtracting the costs in Vietnam dong) in accordance with laws and regulations on oil and gas and the Guarantee agreement and commitments of the Government (if any);
- h) Receipts of transfers related to foreign loans of foreign direct investment enterprises in accordance with laws and regulations on foreign loans and debt repayment of the enterprises, except for the cases as prescribed in Clause 3 Article 5 of Circular 06/2019/TT-NHNN;
- i) Other legal receipts in foreign currency related to the foreign direct investment in Vietnam.
- Payment transactions:
- a) Transfer to the foreign currency payment account opened at an authorized bank by the foreign direct investment enterprise, the foreign investor participating in a BCC contract, the foreign investor directly performing a PPP project, the manager of a petroleum project under the laws and regulations on petroleum to perform foreign direct investment activities in Vietnam;
- b) Expense for selling foreign currency to an authorized credit institution to transfer to Vietnamese dong payment account of the foreign direct investment enterprise, the foreign investor participating in a BCC contract, foreign investor directly performing a PPP project;
- c) Transfer of payment of the transfer of investment capital, investment project to the offshore transferor or expense for the sale of foreign currency for payment of the transfer of investment capital or investment project to the transferor in Vietnam in Vietnam dong in accordance with provisions in Article 10 of Circular 06/2019/TT-NHNN;
- d) Payment for offshore remittance of profit and legal incomes in foreign currency from the foreign direct investment in Vietnam by the foreign investor;
- dd) Payment for offshore remittance of the direct investment capital in foreign currency by the foreign investor in case of investment capital reduction, finish, liquidation or termination of the investment project, BCC contract or PPP contract in accordance with laws and regulations on investment;
- e) Payment for foreign currency conversion to carry out the transfer of capital, profits and lawful revenue sources from offshore direct investment activities in cases where the money transferred from capital, profits and lawful revenues to foreign countries are different from the currency of the direct investment account opened;
- g) Expenses for transfer of funds related to foreign loans in foreign currency of foreign direct investment enterprises in accordance with laws and regulations on foreign loans and debt repayment by enterprises, except for cases as prescribed in Clause 3 Article 5 of Circular 06/2019/TT-NHNN;
- h) Other legal payments in foreign currency related to foreign direct investment activities in Vietnam.
Note: The content presented above is for reference only. Subject to the case, the above content may no longer be relevant. For further advice, please contact LMP Lawyers.
