(S&B Law) When investing in Vietnam, one of the biggest concerns of investor is the investment capital of the projects.
Under the regulation on investment, the investment capital is the total amount of charter capital and loan. Additionally, there are some business lines requesting the legalized capital such as real estate, finance.
However, when examining the investment projects, the competent authority will consider the investment capital. If the investment capital is not reasonable, the investor will be requested to explain the financial capacity.
Thus, when investing in Vietnam, the investor must have the explanation letter on financial capacity on the implementation of the project.
The explanation varies between the kinds, scopes, and business lines of project. For a manufacturing project, the investor should explain the following conditions:
- The investment expenses for plant and office, even if renting or building up;
- Expected expenses for machines and equipment for manufacturing;
- Purchasing and importing expenses for materials;
- Personnel expenses;
- Managing expenses, sales and marketing expenses …
The investor must calculate the necessary expenses until collecting the revenue to ensure the operation of the project.
These expenses can not exceed the CHARTER CAPITAL.
The minimum investment/charter capital is the total expenses of the project.
We have just presented some conditions on financial capacity of the investor.
We strongly recommend the foreign investors consult the legal or financial advisors when making an investment in Vietnam and obtaining the license.
Lawyer Tran Van Tri, S&B Law Company Limited.