OIRC is a procedure that any Vietnamese investor who wants to start a business overseas must do if he wants to move the capital from Vietnam to fund such investment.
OIRC – the definition
Offshore investment is the transfer of capital by an investor; or payment for the purchase of part or all of the business premises, or establishment of ownership to carry out business investment activities outside the territory of Vietnam and direct participation in such investment activities.
In light of the current globalization trend, the Vietnamese government encourages investors to conduct investment activities in foreign countries in order to utilize resources, develop know-how, and expand the market beyond the borders; increase the ability to export goods and services from Vietnam, earn foreign currencíe, access modern technology, improve management capacity, and supplement resources for the country’s socio-economic development.
However, offshore investments are supervised closely by the Government due to the Monetary regulations which prevent capital drainage. If a person wants to transfer capital from Vietnam, he must obtain approval from the Government on such an investment project before he can actually move the money out of the country – the subject of the OIRC
This OIRC is subject to the Ministry of Planning and Investment and takes several months to complete. Therefore the investors will need to prepare for this procedure beforehand.
In theory, one must obtain the OIRC before the entity in another country is established. If the investor proceed with an offshore investment project without an OIRC, he’ll face a penalty, fine or the possibility of not having the Vietnamese Government recognize their ownership
Obtaining OIRC – the Procedure
To be fully compliant with the Vietnamese Government on Offshore Investment regulation, the investor needs to follow the following procedure:
- Step1: Apply for the Offshore Investment Registration Certificate (OIRC) at the Ministry of Planning and Investment (MPI)
Timeline: 15 working days from the date submitting valid dossiers. In practice, 30-45 working days.
Notes: Depending on the scale of the project, we may need to seek prior approval from the Prime Minister or the National Assembly of Vietnam if the amount of the proposed project exceeds VND 20 billion or falls under certain categories (limited or restricted). In this case, the timeline will be longer.
In reality, the actual time to obtain an OIRC may range from 2-3 months. - Step 2: Proceed with for investment registration procedure in the host country
Timeline: Depends on the regulations of the invested country. - Step 3: Open Direct investment Capital Account (DICA) in a competent bank
- Step 4: Register for Foreign Exchange transactions (FOREX) at State Bank of Vietnam (SBV)
Upon the completion of Step 4, the investor can transfer capital investment out of Vietnam to fund the project overseas.
Within 60 days of the establishment of the entity overseas, the investor must submit a report in investment progress to the MPI
Failure in obtaining the OIRC before the offshore investment is established will result in a fine of around 50M-60M/violation or blocking of financial transactions due to a bad credit record.
Contact VNBG to get further information on the process
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