How is investment abroad by economic organizations with foreign capital in Vietnam and state-owned enterprises regulated?

How is overseas investment of foreign-invested economic organizations in Vietnam regulated?

Pursuant to Article 70 of Decree 31/2021/ND-CP regulating investment Investment abroad by economic organizations with foreign investment in Vietnam, specifically as follows:

“Article 70. Investment abroad by economic organizations with foreign investment in Vietnam

For economic organizations with foreign investors holding more than 50% of charter capital, the source of capital invested abroad must be equity, which does not include capital contributions to Carrying out investment activities in Vietnam. In case of using additional contributed capital to invest abroad, the investor must first carry out the procedures for granting an Outward Investment Registration Certificate according to the provisions of this Decree, then carry out the procedures for increasing capital and fully contributing charter capital in Vietnam before transferring investment capital abroad.”

Thus, to make investments abroad, for economic organizations with foreign investors holding more than 50% of charter capital, the source of capital invested abroad must be equity capital, which does not include capital contributions to carry out investment activities in Vietnam.

If using additional contributed capital to invest abroad, the investor must first carry out the procedures for granting an Outward Investment Registration Certificate according to the provisions of this Decree, then carry out the procedures for increasing capital and fully contributing charter capital in Vietnam before transferring investment capital abroad.

How is overseas investment of state-owned enterprises regulated?

Pursuant to Article 71 of Decree 31/2021/ND-CP stipulating the overseas investment of state-owned enterprises as follows:

(1) Conditions for deciding on investment, authority, process and procedures for deciding on investment and terminating investment for overseas investment projects of state-owned enterprises comply with the provisions of law on management and use of state capital invested in production and business at enterprises and other relevant legal regulations.

(2) The owner’s representative agency decides on the policy of investing abroad, the policy of terminating investment abroad according to internal processes and regulations in accordance with its authority and tasks according to the provisions of law on management and use of state capital invested in production and business at enterprises and other relevant legal regulations.

(3) Responsibilities of the owner’s representative agency

– Decide to invest abroad according to authority and take responsibility for investment performance in accordance with the law on management and use of state capital for business investment in enterprises and relevant laws;

– Inspect and supervise investment activities abroad; Resolve problems in implementing legal regulations on overseas investment;

– Manage and supervise the use of state capital to invest abroad in state-owned enterprises, the state capital invested in enterprises under their management authority or of which they represent the owner; Evaluate the effectiveness of using state capital invested in enterprises with investment activities abroad;

– Implement the reporting regime related to overseas investment under the management of that agency according to the provisions of Article 73 of the Investment Law and send it to the Ministry of Planning and Investment.

What are the documents determining the location and form of implementation of investment projects abroad?

In Article 73 of the Decree 31/2021/ND-CP regulations on documents determining the location of investment projects abroad as follows:

(1) The following investment projects must have documents identifying the location of the investment project:

– Projects subject to approval by the Prime Minister or the National Assembly for investment abroad;

– Energy projects;

– Projects on animal husbandry, farming, forestry, and aquaculture;

– Mineral survey, exploration, exploitation and processing projects;

– Projects that build factories, production, processing and manufacturing facilities;

– Investment projects for construction of works and infrastructure; Real estate investment and business projects except service provision activities: real estate brokerage, real estate trading floor, real estate consulting, real estate management.

(2) Documents determining the location of an investment project are one of the following types of documents, including location determination content:

– Investment license or document of equivalent value from the country or territory receiving investment;

– Decision on land allocation or land lease by competent agencies and organizations in the country or territory receiving investment;

– Winning bid and contract contracts; land allocation and land lease contracts; investment and business cooperation contract accompanied by documents proving the authority of the party involved in the contract with respect to the location;

– Agreement in principle on land allocation, land lease, business location lease, transfer of land use rights or assets attached to land; business investment cooperation agreement accompanied by documents proving the authority of the parties involved in the agreement regarding the location.

At the same time, Article 74 of Decree 31/2021/ND-CP regulates Documents determining the form of implementation of investment projects abroad, specifically:

(1) For investment activities abroad in the form of overseas contracts specified in Point b, Clause 1, Article 52 of the Investment Law, the investor submits an agreement or contract with the foreign partner on investment or other documents of equivalent value accompanied by documents on the legal status of the foreign partner.

(2) For investment activities abroad in the form of capital contribution, share purchase, purchase of capital contribution of an economic organization abroad to participate in the management of that economic organization, the investor submits an agreement, contract or other document determining the capital contribution, purchase of shares, purchase of capital contribution along with documents on the legal status of the overseas economic organization to which the investor contributes capital, purchases shares, buys capital contribution.

(3) For investment activities abroad in other forms of investment according to the provisions of the law of the receiving country as prescribed in Point dd, Clause 1, Article 52 of the Investment Law, the investor submits documents identifying that form of investment according to the provisions of law of the country or territory receiving the investment.