Capital Contribution in Vietnam: A Brief Guide for Business Setups

Capital contribution is a key step for foreign investors in Vietnam, with strict rules on timelines, procedures, and compliance. Careful preparation helps avoid costly mistakes.

Capital contribution is one of the most crucial steps for investors when establishing a company in Vietnam. It determines whether the business can operate legally and meet its financial commitments.

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Vietnam’s regulations establish a strict timeline for capital contribution under the 2020 Enterprise Law for charter capital, while the 2020 Investment Law governs market access and the requirements for pre-registration. This step secures the company’s ability to commence operations and demonstrates its financial reliability to regulators and partners.

In this article, we outline the key requirements and procedures for capital contribution in Vietnam, highlight common mistakes that foreign investors frequently encounter, and offer practical advice to ensure a smooth and compliant process.

Requirements for capital contribution

Foreign investors must meet several requirements before investing capital in a Vietnamese company. These requirements are grounded in the Investment Law, the Enterprise Law, and related regulations that govern how foreign ownership operates in the country.

Eligibility conditions are crucial. Investors must adhere to Vietnam’s market access commitments, which specify the sectors open to foreign investment and any existing restrictions. Additionally, projects in sensitive areas, such as border regions, coastal zones, or islands, are subject to an extra review to ensure they do not compromise national defense and security.

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Company Setup Process and Requirements in Vietnam

Every foreign-owned company in Vietnam is required to open a Direct Investment Capital Account (DICA). This specialized bank account is mandatory for receiving capital contributions and foreign loans, and all transactions must go through it.

Investors must contribute the exact capital amount registered in the Enterprise Registration Certificate (ERC). Authorities require the transfer to match the committed charter capital, and each shareholder must contribute their designated portion.

Capital contribution assets

The 2020 Enterprise Law permits capital contributions in Vietnamese dong (VND), freely convertible foreign currencies, gold, land use rights, intellectual property rights, technologies, technical know-how, or other assets that can be valued in VND.

See also: Amendments in Vietnam’s Investment Licensing: Highlights of Decree 239 

Deadlines for capital contribution

Under the Law on Enterprises 2020, newly established businesses in Vietnam are required to contribute their charter capital within a specific timeframe following the issuance of their Enterprise Registration Certificate (ERC). The deadline varies depending on the type of enterprise, as follows:

Multi-member limited liability company

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Members must fully contribute the committed charter capital using the registered type of asset within 90 days from the date the ERC is issued. During this period, members retain rights and obligations corresponding to their committed capital ratio. A member may contribute a different type of asset only with the consent of more than 50 percent of the remaining members. The 90-day timeframe excludes the period needed for transportation, importation, or administrative procedures to transfer asset ownership.

Single-member limited liability company

The company owner must contribute the full amount of charter capital within 90 days of receiving the ERC. The owner’s rights and obligations apply according to the committed capital contribution during this time. Similar to multi-member LLCs, the 90-day limit does not include the time required for asset transfer or import procedures.

Joint-stock company (JSC)

Shareholders are required to pay in full for their subscribed shares within 90 days from the ERC issuance date, unless the company charter or share purchase contract specifies a shorter period.

For capital contributions made in the form of assets, the time needed for transportation, importation, and ownership transfer is excluded from the 90-day period. The company’s Board of Directors is responsible for monitoring and ensuring the timely payment of registered share capital.

Partnership (general and limited partners)

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General and limited partners must contribute their committed capital within the period agreed upon in the partnership charter or members’ agreement.

If a partner fails to contribute in full or on time, the unpaid amount is considered a debt owed to the company, and the partner may be expelled by decision of the Members’ Council. Unlike other business types, the law does not impose a fixed statutory timeframe, allowing flexibility based on internal agreements.

Procedures for capital contribution

Foreign investors who contribute capital, buy shares, or acquire equity in a Vietnamese enterprise must adhere to the procedures outlined in Decree No. 31/2021/ND-CP, as amended by Decree No. 168-2025/ND-CP. The specific process varies depending on the type of investment and the enterprise’s location.

Step 1: Determine whether registration is required

Foreign investors must first determine whether their capital contribution or share purchase falls under the cases stipulated in Clause 2, Article 26 of the Investment Law, typically when the investment leads to:

• Foreign ownership exceeding 50 percent of the charter capital;
• Investment in conditional business sectors; or
• Investment in enterprises located in areas affecting national defense and security.

Step 2: Submit a capital registration dossier

For cases requiring registration, the enterprise receiving foreign capital must submit one set of documents to the investment registration authority where the company is headquartered. The dossier includes:

• A written registration for capital contribution, share purchase, or equity acquisition (detailing ownership structure before and after investment, business lines, transaction value, and project information if applicable);
• Copies of legal documents of the foreign investor(s) and the enterprise;
• A principal agreement between the foreign investor and the enterprise or its shareholders; and
• A copy of the land use right certificate (if the enterprise holds land in sensitive or restricted areas).

Step 3: Review and approval process

For foreign ownership exceeding 50 percent of the charter capital, and investments in conditional business sectors

Once the investment registration dossier is submitted, the investment registration authority will review the application to determine whether the proposed capital contribution or share purchase satisfies three key regulatory conditions:

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• Market access: The investment must fall within the permitted sectors for foreign investors as defined by the laws and the accompanying market access list.
• National defense and security: The transaction must not pose risks to national defense, public order, or security.
• Land use conditions: If the target enterprise holds land use rights in sensitive locations such as islands, border communes, or coastal communes, or other areas with potential defense implications, the investment must comply with land use regulations and restrictions applicable to such zones.

The investment authority will complete its review within 15 working days from the date of receiving a valid dossier and issue a written notification confirming whether the investment meets all legal requirements. The notice is sent to both the foreign investor and the target enterprise.

For investments in enterprises located in areas affecting national defense and security

Suppose the enterprise in question holds land use rights in sensitive areas, such as islands, border communes, coastal communes, or zones deemed critical to national defense and security. In that case, the application will undergo additional scrutiny:

• Within two working days, the investment registration authority must request written opinions from the provincial Military Command and provincial Police Department.
• These agencies have five working days to provide their assessment on whether the investment satisfies defense and security conditions. If no response is received within this period, the investment is deemed compliant by default.
• Within ten working days of receiving a complete dossier, and based on the feedback from the relevant authorities, the investment registration authority will finalize its evaluation and issue a notification of approval (or non-approval) to both the investor and the enterprise.

This combined review and security-screening process ensures that foreign capital participation complies not only with investment regulations but also with Vietnam’s national defense and security requirements.

Step 5: Finalize ownership registration

Once the investment is approved, the enterprise must proceed with changing its members or shareholders at the business registration authority in accordance with the Enterprise Law.
At this stage, the foreign investor’s ownership rights and obligations as a member or shareholder are formally established.

See also: Enterprise Registration in Vietnam: Key Updates in 2025

Common mistakes to avoid

Many investors underestimate the complexity of Vietnam’s capital contribution rules. Missteps can cause costly delays or even threaten the company’s legal standing. Below are the most frequent mistakes to avoid:

• Missing the 90-day deadline: Failing to meet this legal window can result in fines, suspension of operations, or even revocation of the company’s license.
• Using the wrong bank account: All contributions must go through the company’s DICA. Banks typically reject transfers from domestic or third-party accounts; investors should remit from their own overseas account directly into the DICA.
• Contributing an incorrect capital amount: To avoid shortfalls from intermediary fees, instruct the transfer with SWIFT fee option ‘OUR’ so the company receives the exact registered amount; avoid ‘topping up’ above the registered capital, which banks may reject.
• Assuming a local partner is always required: While certain restricted industries do require joint ventures, many sectors allow 100 percent foreign ownership. Bringing in a local partner unnecessarily can complicate decision-making and profit distribution.

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• Underestimating compliance paperwork: Proper record-keeping, including maintaining value-added tax (VAT) invoices and timely reporting, is mandatory. Skipping these requirements can lead to tax penalties or regulatory issues.
• Registering with insufficient capital: If the declared capital is too low, authorities may reject the registration or delay licensing. Investors should research minimum capital requirements for their industry and ensure adequate funds are available.

Best practices and advice

Investors can avoid unnecessary risks by taking a proactive approach to capital contribution. The first step is to plan the capital structure early. Registering an amount that is both sufficient and realistic helps ensure smooth approval while demonstrating financial credibility to regulators and partners. It is equally important to coordinate with banks in advance. Clear instructions on transfer procedures help investors avoid delays or rejected transactions.

Another essential practice is to seek legal review before committing to a specific business structure. Some industries allow full foreign ownership, while others impose caps or require a local partner. Confirming these rules at the outset prevents complications and ensures compliance with Vietnam’s investment regulations.

Timely execution also matters. Investors should carefully track the 90-day window for capital contribution and monitor each shareholder’s transfer to ensure the process is completed without penalties.

Finally, many foreign businesses benefit from engaging professional support. Local consultants can assist with setting up the DICA, meeting reporting obligations, and ensuring compliance with tax and accounting standards. This guidance helps new companies focus on their operations while ensuring full alignment with Vietnam’s legal framework.

With inputs from Vu Nguyen Hanh.

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