What conditions must be met for capital to be transferred abroad for investment purposes?

According to Article 66 of the 2020 Investment Law, the transfer of investment capital abroad is regulated as follows:

Transfer of Investment Capital Abroad

1. Investors are allowed to transfer investment capital abroad to carry out investment activities when the following conditions are met:

a) The investor has been granted an Investment Registration Certificate for overseas investment, except in the case specified in Clause 3 of this Article;

b) The investment activity has been approved or licensed by the competent authority of the host country. In cases where the laws of the host country do not regulate the granting of an investment license or approval, the investor must provide documentation proving the right to carry out investment activities in the host country;

c) The investor has a capital account as prescribed in Article 65 of this Law.

2. The transfer of investment capital abroad must comply with the provisions of law regarding foreign exchange management, export, technology transfer, and other related laws.

3. Investors may transfer foreign currency or goods, machinery, and equipment abroad to serve activities such as market research, survey, exploration, and preparation for investment projects in accordance with government regulations.

This is guided by Article 82 of Decree 31/2021/ND-CP as follows:

Transfer of Investment Capital Abroad

1. Investors are allowed to transfer investment capital abroad to carry out investment activities abroad as prescribed in Article 66 of the Investment Law.

2. Investors may transfer foreign currency, goods, machinery, and equipment abroad before being granted the Investment Registration Certificate to cover costs for the formation of the investment project, including:

a) Market research and investment opportunities;

b) Field surveys;

c) Researching documents;

d) Collecting and purchasing documents and information related to the selection of investment projects;

đ) Consolidating, evaluating, and appraising, including the selection and hiring of consulting experts for project evaluation and appraisal;

e) Organizing seminars and scientific conferences;

g) Establishing and operating a liaison office abroad related to the formation of the investment project;

h) Participating in international bidding, paying deposits, guarantees, or other forms of financial assurance, covering costs and fees as required by the contracting party, country, or territory receiving the investment related to bidding conditions and the execution of the investment project;

i) Participating in mergers and acquisitions of companies, paying deposits, guarantees, or other forms of financial assurance, covering costs and fees as required by the seller or according to the legal provisions of the host country;

k) Contract negotiations;

l) Purchasing or leasing assets to support the formation of investment projects abroad.

3. The transfer of foreign currency, goods, machinery, and equipment abroad as prescribed in Clause 2 of this Article must comply with the provisions of the law on foreign exchange, export, customs, and technology.

4. The maximum limit for transferring foreign currency under Clause 2 of this Article shall not exceed 5% of the total investment capital abroad and shall not exceed 300,000 USD, which is counted towards the total investment capital abroad, except where the government has other regulations.

5. The State Bank of Vietnam will issue detailed guidelines on foreign exchange management for transferring foreign currency abroad to carry out the activities specified in this Article.

6. The transfer of capital in the form of machinery, equipment, and goods abroad and back to Vietnam to implement an overseas investment project must follow customs procedures as prescribed by customs law. The Ministry of Finance will provide detailed guidance on transferring machinery, equipment, and goods abroad for activities specified in this Article.

Investment capital may be transferred abroad when an Investment Registration Certificate is granted, approved by the competent authority, and a capital account is established as prescribed.

Can Vietnamese citizens directly buy and sell securities abroad?

According to Article 52 of the 2020 Investment Law, the forms of investment abroad are as follows:

Forms of Investment Abroad

1. Investors may carry out investment activities abroad in the following forms:

a) Establishing an economic organization in accordance with the laws of the host country;

b) Investing through contracts abroad;

c) Contributing capital, purchasing shares, or purchasing equity interests in economic organizations abroad to participate in the management of those organizations;

d) Buying, selling securities, other negotiable instruments, or investing through securities investment funds and other financial intermediary institutions abroad;

đ) Other forms of investment as prescribed by the laws of the host country.

2. The Government will specify in detail the implementation of the investment form described in point d, Clause 1 of this Article.

Thus, Vietnamese citizens can directly buy and sell securities abroad only through intermediary organizations, such as securities investment funds or other financial institutions abroad.

Can profits from investments abroad be used to implement new investment projects abroad?

According to Clause 1 of Article 68 of the 2020 Investment Law, the transfer of profits to Vietnam is regulated as follows:

Transfer of Profits to Vietnam

1. Except for cases where profits are retained under the provisions of Article 67 of this Law, investors must transfer all profits earned and other income from investments abroad to Vietnam within 6 months from the date of the tax settlement report or a legally equivalent document as prescribed by the laws of the host country.

According to Clause 1 of Article 67 of the Investment Law 2020, investors are allowed to retain profits earned from investments abroad for reinvestment in the following cases:

Using Profits Abroad

1. Investors may retain profits from investments abroad for reinvestment in the following cases:

a) Continuing to contribute capital to the investment abroad when the full capital has not been contributed as registered;

b) Increasing investment capital abroad;

c) Implementing new investment projects abroad.

Thus, profits earned from foreign investments may be continued to be used for implementing new investment projects abroad in accordance with the above regulations.