New Foreign Exchange Management Circular Issued For Foreign Direct Investment Into Vietnam.
Legal News & Analysis - Asia Pacific - Vietnam - FDI
4 October, 2019
The State Bank of Vietnam has issued Circular 06/2019/TT-NHNN dated 26 June 2019 (“Circular 06”) to replace the existing Circular No. 19/2014/TT-NHNN dated 11 August 2014 (“Circular 19”). Circular 06 came into effect on 6 September 2019. Below are noteworthy contents of Circular 06.
1. Redefining foreign direct investment (FDI) enterprises:
Under Circular 19, FDI enterprises are enterprises in which foreign investors participate by contributing capital to establish, manage such enterprises and conduct investment activities in Vietnam.
Circular 06 revises the definition of FDI enterprises to specifically include:
- enterprises in which there is at least one foreign investor being a member or a shareholder, and that foreign investor is granted an investment registration certificate;
- enterprises other than those mentioned in item (a) above having one or more foreign investors that hold 51% or more of the charter capital of the enterprises, either by way of (i) capital contribution, acquisition of shares/shares of capital contribution, (ii) division, separation, merger, consolidation, or (iii) new establishment under specialised laws; and
- project enterprises established by foreign investors to implement public private partnership (“PPP”) projects.
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David Lim, Partner, ZICOlaw