Deadline for full investment capital contribution and the procedure to apply for an extension

4/2/2021

Usually, the Department of Planning and Investment or the Management Board of Industrial Zones recognizes that the period of full capital contribution to implement an investment project is 03 months, unless the project is associated with the construction or renovation of factories or Projects with a large total investment capital will have their full capital contribution term longer than usual, possibly up to 02 years. Past the above time limit, the investor can no longer contribute capital, the money is transferred to the capital account and then cannot be transferred to the trading account by the bank. Therefore, if past the above time limit, the investor has not fully contributed capital, the company must adjust the time limit of capital contribution recorded on the investment registration certificate. 

Procedures for applying for extension of the full investment capital contribution period if the enterprise is in the capital contribution period 

Within the capital contribution period of 90 days - or another period recorded on the investment certificate, from the date of issuance of the Investment Certificate (or another period recorded in the Investment Certificate), enterprises wishing to extend the capital contribution period must send a notice to the investment management agency in the province / centrally run city where the enterprise is headquartered. The investment regulator will make a decision: 

In case the decision approves the change of time limit for capital contribution: 

  • The enterprise sends a letter with the notice to the investment capital account management bank so that the capital contribution can be made. 
  • The enterprise makes capital contribution according to the newly adjusted term. 

In case the decision does not approve the change of time limit for capital contribution: 

  • Enterprises are forced to fulfill the obligation to contribute fully capital as prescribed. 
  • Enterprises can register to reduce capital accordingly and avoid penalties for not contributing enough capital. 

In cases where the time limit for capital contribution has been exceeded but the foreign company registers to extend the time limit for capital contribution, the investment management agency will normally refuse if it does not know a reasonable explanation. 

Difficulties in extending the time limit for capital contribution 

An investor is also an owner, member or shareholder of the company, thus failing to fully contribute the investment capital, often concurrently with the inadequate contribution of the company's charter capital. The Enterprise Law 2020 stipulates that at the end of the capital contribution period, members and shareholders who do not fully contribute capital will naturally no longer be members or shareholders of the company. Therefore, extending the capital contribution term means recording the membership, shareholders of those who have not contributed capital, this is also the reason why the investment management agency refuses to deal with the foreign company according to the proposed investment certificate adjustment dossier. 

Is it possible to extend the capital contribution schedule concurrently with the adjustment of the investment certificate? 

The Investment Law of 2020 does not restrict foreign-owned companies from adjusting their investment certificates when they have not fully contributed capital. Therefore, enterprises are allowed to register for adjustment of the investment registration certificate at the same time with the request to extend the time limit for capital contribution.