Conversion of loans into equity in FIEs in Vietnam
Written by |on 29 June, 2022
Investors of a foreign-invested company in Vietnam who lend money to their own company can have their loans converted into contributed capital. Besides the loans must be either registered or reported to the State Bank of Vietnam depending on whether short-term or long-term loans as regulated by the regulation on the foreign loans and borrowings, investors/ companies can perform the following procedures for the conversion:
- Amend the business registration certificate (BRC) with the updated amount of the charter capital
- Amend the investment certificate (IC) with the conversion of the loans into the charter capital
The companies and investors should make sure that the loan agreement has been properly prepared and the capital contribution has been made in line with current law and regulations on capital contribution for foreign investors.