WHAT ARE THE CONDITIONS AND FORMS REQUIRED TO CONTRIBUTE CAPITAL?

I. Concept 

Pursuant to Clause 18 Article 4 of Law on Enterprise 2020 stipulates Capital contribution:"Capital contribution is the contribution of assets to form the charter capital of the company, including capital contribution to establish the company or additional charter capital contribution of an already established company."  

Pursuant to Clause 27 Article 4 of Law on Enterprise 2020 stipulates Capital contribution:"Capital contribution is the total value of assets of a member who has contributed or committed to contribute to a limited liability company or partnership. Capital contribution ratio is the ratio between the contributed capital of a member and the charter capital of a limited liability company or partnership."  

Pursuant to Clause 1, Article 34 of Law on Enterprise 2020 stipulates Assets contributed as capital: "Assets contributed as capital are Vietnamese Dong, freely convertible foreign currency, gold, land use rights, intellectual property rights, technology, technical know-how and other assets that can be valued in Vietnam Dong."  

Pursuant to Clause 1, Article 36 of Law on Enterprise 2020 stipulates the valuation of assets contributed as capital: "Assets contributed as capital are not Vietnamese Dong, freely convertible foreign currency, gold must be valued by members, founding shareholders or valuation organizations and expressed in Vietnam Dong." 

II. Conditions and regulations on forms of capital contribution 

Pursuant to Clause 1, Article 34 of Law on Enterprise 2020, it can be understood that the form of capital contribution includes three types: 

-Capital contribution by assets 

- Capital contribution by knowledge 

- Capital contribution by activities or work 

* Capital contribution by assets:   

According to Article 105 of the Civil Code 2015 stipulates property: 

-Property is valuable things, money, papers and property rights. 

-Assets include real estate and movable property. Real estate and movable property can be existing assets and assets formed in the future. Conditions on the form of capital contribution by assets 

-Capital contribution in cash must make capital contribution by bank transfer

-The capital contribution must be certified in writing. 

- For assets that are real estate and movable property, capital contributors must: Be persons who have lawful land ownership and use rights, are recognized by law and must carry out procedures for transfer of land ownership/use rights at competent state agencies. 

* Capital contribution by knowledge: Capital contribution by knowledge can be contributed by intellectual property rights such as: copyright, rights related to copyright, industrial property rights, rights to plant varieties and other intellectual property rights in accordance with the law on intellectual property. Only individuals and organizations that are the legal owners of the above-mentioned rights have the right to use such assets to contribute capital. However, contributing capital by knowledge will be difficult in calculating the value of contributed capital as well as proving the scope of obligations of capital contributors. 

* Capital contribution by activities or work: 

- Capital contribution by activities or work must be committed by specific acts that are valued in money 

- This capital contribution will also be difficult in calculating the value of the contributed capital as well as proving the scope of obligations of the capital contributor 

Above is an article that provides some basic information about the stipulate Vietnamese law on necessary conditions and forms for capital contribution.

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For more information, please contact:

Hoang Pham (James) / Managing Partner at: hoang.pham@vselawyers.com

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Attention: This legal update is not an advice and should not be treated as such.