Question:
Our company in Ho Chi Minh City is a Joint Stock Company with 3 Vietnamese shareholders. The company does not own land, and currently, all shareholders want to sell all shares to three new shareholders (2 Vietnamese and 1 British). I would like to ask what procedures the company needs to follow?
Answer:
According to the regulations in Clause 2, Article 26 of the Investment Law:
- Foreign investors shall carry out procedures for capital contribution registration, share purchase, and purchase of capital contribution portions in economic organizations before changing members or shareholders in the following cases:
- a) Capital contribution, share purchase, or capital contribution portion purchase increases the ownership ratio of foreign investors in economic organizations operating in sectors and trades accessing markets with conditions for foreign investors;
- b) Capital contribution, share purchase, or capital contribution portion purchase leads to foreign investors, economic organizations stipulated in points a, b, and c of Clause 1, Article 23 of this Law holding over 50% of the charter capital of the economic organization in cases: increasing the ownership ratio of charter capital from below or equal to 50% to over 50%; increasing the ownership ratio of charter capital when foreign investors already hold over 50% of the charter capital in the economic organization;
- c) Foreign investors contribute capital, purchase shares, or purchase capital contribution portions of economic organizations holding Certificates of land use rights on islands and communes, wards, border towns; communes, wards, border towns near the sea; other areas affecting national defense and security."
Since the company did not specify its business sector and the capital ratio of each shareholder after the share transfer, it is divided into the following cases:
Case 1: Foreign shareholder owns over 50% of charter capital after the share transfer, and/or the company's business falls within the list of sectors and trades accessing markets with conditions for foreign investors:
Step 1: Register share purchase at the Foreign Economic Department - Department of Planning and Investment of Ho Chi Minh City.
Step 2: Register the change of shareholders at the Business Registration Office - Department of Planning and Investment of Ho Chi Minh City.
Case 2: Foreign shareholder owns equal to or less than 50% of charter capital after the share transfer, and the company's business does not fall within the list of sectors and trades accessing markets with conditions for foreign investors: The company conducts the registration of changing shareholders at the Business Registration Office - Department of Planning and Investment of Ho Chi Minh City.
The company can verify its business sector's inclusion in the list of sectors and trades accessing markets with conditions for foreign investors in Appendix I attached to Decree No. 31/2021/ND-CP, Section B.
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