Registration procedures for capital contribution to buy shares that you should know

1.Forms of capital contribution

Capital contribution is the act of contributing assets to form the charter capital of a company, including contributing capital to establish a company or contributing additional charter capital to an already established company. Capital contribution can be carried out in various forms, including:

• Contribution by land use rights
• Contribution by fixed assets
• Contribution by automobiles
• Contribution by cash and gold
• Contribution by technology and technical know-how.

Here are the procedures for some common forms of capital contribution:

1.1. Procedures for capital contribution by land use rights:

Step 1: Valuate contributed assets

There are two methods for asset valuation:

• Valuation by members or founding shareholders
• Professional valuation by an organization

Step 2: Prepare documents

• Application for registration of changes in land use rights
• Land use rights certificate
• Capital contribution contract by the value of land use rights and assets attached to the land
• Certified copy of the business registration certificate of the enterprise, personal identification papers of the capital contributor if an individual
• Notarized power of attorney.

Step 3: Submit documents to the competent authority

• Land registration office or branch office of the land registration office
• Department of natural resources and environment under the district-level People's Committee.

Step 4: Receipt documents and resolve requests

• Deadline for resolving the capital contribution procedure by land use rights: not more than 15 days.

Step 5: Result notification.

Procedures for capital contribution by land use rights

1.2. Procedures for capital contribution by fixed assets

Step 1: Asset valuation

There are two methods of asset valuation:

• Valuation by members, founding shareholders;
• Professional valuation organizations.

Step 2: Prepare the fixed asset contribution file

In case of individual or non-business entity capital contribution:

• Record of capital contribution certification;
• Asset transfer record.

In case of individual or business entity capital contribution:

• Production and business capital contribution record;
• Joint venture agreement;
• Asset valuation record of the capital contribution handover council (or asset valuation document of the organization with the function of valuation according to the regulations of the law);
• Documents on the origin of the assets.

Step 3: Transfer ownership of contributed assets:

• For assets with registered ownership or land use rights: The contributor must carry out procedures to transfer ownership of the asset or land use rights to the company at the competent state agency. The transfer of ownership of the contributed assets is not subject to registration fee;
• For assets without registered ownership: Capital contribution must be carried out by transferring the contributed assets with confirmation by a record.

1.3. Procedures for capital contribution by car

Step 1: Asset valuation

There are two methods of asset valuation:

• Valuation by members, founding shareholders;
• Professional valuation organizations.

Step 2: Transfer ownership from the contributor to the company

• Case 1 - Different provinces: The owner of the car directly or authorizes an individual or a service organization to submit the vehicle registration certificate and license plate to the vehicle registration agency;
• Case 2 - Within the same province: The owner of the car directly or authorizes an individual or a service organization to submit the vehicle registration certificate to the vehicle registration agency; If the company is able to complete the transfer of ownership immediately, there is no need to withdraw the vehicle registration certificate.

Step 3: Prepare and submit the file:

• Asset valuation record for the car;
• Asset contribution agreement to the company;
• Prepaid tax declaration form confirmed by the tax agency on the exemption of the registration fee for the vehicle;
• Documents on the origin of the car;
• Registration fee documents as prescribed.

Procedures for capital contribution by car

2.Procedures for capital contribution to companies

2.1. Procedures for capital contribution to establish domestic companies

a. Steps to carry out capital contribution procedures:

Step 1: Sign a capital contribution contract with assets, certified/notarized.

Step 2: Actually transfer the assets.

Step 3: Submit documents for name transfer, tax declaration, and payment of related fees. The transfer of ownership rights for contributed assets is exempt from registration fees.

Step 4: Receive the Certificate of Ownership in the name of the Company.

Step 5: Record the status as a member.

What are the steps involved in contributing capital?

b. Procedures for capital contribution to a joint stock company

For a single-member limited liability company, the capital contribution process is completed after the owner transfers ownership rights of the registered capital assets.

c. Procedures for capital contribution to a two-member limited liability company and a joint stock company

For a two-member limited liability company and a joint stock company, the capital contribution process is officially completed after the company issues a certificate of capital contribution and registers the members in the member register book for the two-member limited liability company, or issues shares (share ownership certificate) and registers the shareholders in the shareholder register book for the joint stock company.

2.2 Procedures for capital contribution by foreign investors

a. In the case of a foreign investor contributing capital to establish a 100% Vietnamese-owned company:

Step 1: The foreign investor submits an investment license application to the Investment Department - Planning and Investment Department where the economic organization's headquarters is located to register capital contribution to the 100% Vietnamese-owned company. The procedures to apply for an investment license include:

• An application for an investment license.
• A proposal for the investment project.
• Identification card, passport, ID card along with documents confirming the legal status of the entity with consular certification.
• Financial capacity documents of the investor such as financial reports, bank account verification, etc.
• Proposal on land use needs if the business rents land in Vietnam.
• If there are restrictions on the technology used in the business, a specific explanation is required regarding the technology to be used.

Step 2: After obtaining approval from the Investment Department - Planning and Investment Department, carry out the procedures to change shareholders and members in the Business Registration Certificate at the Business Registration Office under the Planning and Investment Department.

b. In the case of a foreign investor contributing capital to establish a company with foreign investment:

Step 1: The foreign investor submits the application at the Investment Department - Department of Planning and Investment where the economic organization has its main office to register capital contribution to the company with foreign investment.

Step 2: After obtaining approval from the Investment Department - Department of Planning and Investment for the foreign investor's capital contribution, if the company has not yet separated the Investment Registration Certificate into the Investment Registration Certificate and Business Registration Certificate, it is necessary to carry out the procedures for separation and issuance of the Business Registration Certificate, and to affix the new legal seal at the Department of Planning and Investment.

Step 3: After separating the Investment Registration Certificate and Business Registration Certificate, it is necessary to proceed with the adjustment of the Investment Registration Certificate at the investment licensing agency.

Conclusion:

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