After successfully setting up your foreign-owned company in Vietnam, the next important step is injecting your capital amount into the company. This process, while seemingly easy and fast, requires careful attention to detail and compliance with specific regulations. This article will walk you through the entire capital contribution process, ensuring you understand the main points and can navigate potential pitfalls with confidence.
The deadline and method for contributing the capital
After completing the incorporation process, from the registration date stated on your Business Registration Certificate (BRC). You have a 90-day window to complete the capital contribution to your company’s capital bank account. This timeline is mandated by Vietnamese law and must be strictly compliance with.
Initially, for a foreign-owned company in Vietnam, each company must have a capital bank account, aka the Direct Investment Capital Account (DICA). It is solely to receive capital and loans from overseas for the business entity in the country. And you only can inject the capital into this bank account
Choosing the Right Foreign Bank Account for Capital Contribution
When injecting capital, must be made through bank transfers from the shareholder(s) overseas bank account to the company’s capital bank account.
Vietnamese banks will understand that foreign investment must come from overseas. The transfer will be from the bank account of the owner(s) of the Vietnamese company.
Therefore, to conduct the capital contribution, you must use your personal bank account in another country and you must be the sole owner of that account. Any capital injection using different bank accounts will be rejected and you need to re-do the process using the correct bank account.
Ensuring you transfer the exact Capital amount
A critical aspect of the capital contribution process is transferring the exact amount stated in your Business Registration Certificate (BRC).
For instance, if you’re the sole owner of a company with a registered capital of USD 5,000, you must transfer precisely USD 5,000 to the capital account.
In cases of multiple shareholders, each must contribute their exact designated portion. For example, if your company has an initial capital of USD 10,000 with two shareholders each contributing 50%, each shareholder must transfer exactly USD 5,000 from their accounts.
The received amount always is less than the amount you have transferred due to the intermediary bank fee. And the reality of this matter will be explained below.
Anticipating Bank Fees and Intermediary Banks
When making an international transfer from your bank to one in Vietnam, because the international bank is not part of the Vietnamese banking system. They need to use the intermediary banks which have established a partnership with the Vietnamese bank to transfer the money to your capital bank account.
The middle bank will deduct their fee from the capital amount that you transfer initially. Due to varying bank fees, the final capital reaching the capital bank account will always be less than what you transferred.
While you’re required to send the exact registered amount, both the Vietnamese bank and authorities understand that the bank fee is deducted resulting in a slightly lower received amount. This minor discrepancy is generally accepted and won’t cause issues with your capital contribution process.
In fact, we experienced some cases where the investors wanted to make sure to transfer the exact amount of capital to the company. They will transfer an extra amount to cover the bank fee and the final number will be matched with the registered capital.
However, the bank fee has changed rapidly, so there is a surplus amount stated in the capital bank account. The Vietnamese banks will reject these transfers due to the extra amount. Therefore, to avoid any complications, we recommend transferring the exact amount stated on the business certificate.
How can VNBG assist you in capital contribution and incorporation?
At VNBG, we offer comprehensive bank account openings integrated into our incorporation packages. After setting up your business, we will initially open your company capital bank account and current bank accounts to ensure that you will have time to fulfill the capital contribution obligations.
Moreover, we also assist you in making the first transaction from the capital bank account to your current bank account after you have completed contributing the capital. If you need to apply for Internet Banking, we will be doing that, also we will guide you on how to activate the account and make the process to make the online transaction by yourself.
Besides our incorporation services, we provide a wide range of secretarial services, including accounting, bookkeeping, compliance reporting, recruitment, and more. Our goal is to ensure your business operates efficiently and effectively in Vietnam.
Ready to do business in Vietnam? Contact our experienced consultants today and get started on the right foot. Your business deserves the best start, and we’re here to help you every step of the way.
