Direct investment account is one kind of bank account required to open by foreign investor when investing into Vietnam under form of establishing the foreign investment company or acquiring the capital from existing company.
In this regards, some matter have been occurred causing confusion to the foreign investor. Thus, by this small article, we would like to give an example for reference.
Being a foreigner residing in Vietnam, Mr. Josh remains an account in a commercial bank (Vietnam dong account) and now wishes to transfer money from such account into his 100% foreign invested company operating in Vietnam as capital contribution. A direct investment account in Vietnam dong has been remaining by such Company.
Mr. Josh asked that if he can transfer money from his account into the direct investment account of the company. Having checked, he is of awareness that this matter is guided for the foreigner not residing in Vietnam, but not guided for foreigner residing in Vietnam.
For such, we would be of opinion as follows:
It is stipulated at Point b, Clause 2, Article 4 and Point b, Clause 2, Article 7 of the Circular No. 16/2014/TT-NHNN on August 01st, 2014 of State Bank providing guidance on using the foreign currency account, Vietnam dong account of resident, non-resident at authorized bank (the Circular No. 16) that it is obliged to use payment account of individual resident to “remit, make payment for current transactions, capital transactions in accordance with regulations of law about foreign exchange management”.
It is stipulated in Circular No. 06/2019/TT-NHNN on June 26th, 2019 of State Bank guiding to manage foreign exchange as to foreign direct investment activity into Vietnam that:
– At Clause 1, Article 3: “Foreign investor” means: individual having foreign nationality, organization established under foreign law implementing foreign direct investment activity into Vietnam”.
– At Clause 3, Article 4: “It is obliged for foreign investor, Vietnam investor to transfer into direct investment account when using money to contribute capital”.
– At Point a, Clause 1, Article 6 and Point a, Clause 1, Article 7: “To receive direct investment capital contribution being money from foreign investor, Vietnam investor in foreign direct investment company, foreign investor participating BCC contract, foreign investor directly implementing PPP project”.
Basing on the above regulations, it is entitled for foreigner being resident to transfer money from his/ her payment account at authorized bank for contributing capital via direct investment capital account of the foreign direct investment company.
The above is of extraction from our legal advices rendered for foreign investor doing business in Vietnam. Should any inquiry is made, please feel free to contact us.
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