INVESTMENT REPORT, MUST THE CASES OF INVESTMENT IN THE FORM OF CAPITAL CONTRIBUTION OR SHARE PURCHASE IMPLEMENT?

Investment report is an indispensable procedure for economic organizations established to carry out investment projects. However, many people wonder whether a company with foreign investment capital contributed or purchased by an investor should make an investment report or not. The following article will advise you on this issue. Investment reports for investment projects.

1.         Overview on the forms of investment in Vietnam

a.         Investment through the establishment of business organizations

Investors can invest in Vietnam through the establishment of business organizations. Before carrying out the procedures for establishing an enterprise, the investor must have an investment project to carry out the procedures for applying for an investment registration certificate under the law.

When investing by establishing an economic organization, an investor must satisfy regulations on the charter capital ownership ratio, investment form and scope as well as a Vietnamese partner in accordance with the law.

b.         Investment by contributing capital, buying shares, or buying capital contributions

Investment in Vietnam can be made through contributing capital, buying shares, or buying capital contributions. Capital contribution means buying shares of joint-stock companies through IPOs or additional issuance; contributing capitals to limited liability companies and partnerships; contributing capital to other business organizations.

Purchase of shares or capital contributions of an economic organization means buying shares of joint-stock companies from the companies or their shareholders; buying capital contributions to limited liability companies by their members and become members of limited liability companies; buying capital contributions to partnerships by partners and become partners; buying capital contributions to other business organizations.

Unlike investing by establishing a business organization, when the investors make an investment through capital contribution, share purchase, or buying capital contribution, it is not required to apply for an Investment Registration Certificate.

c.         Investment under BCC contracts

Business cooperation contract (BCC contract) means a contract between investors for business cooperation and distribution of profits, products without the establishment of a new business organization.

The parties in these contracts will agree on the content of the investment project and related terms so that they can perform the investment project together.

2.         Overview of investment report 

a.         What is a report on investment?

An investment report or report on investment activities can be understood as a statistical document by the enterprise on the implementation of an investment project and information related to the investment project such as interest, remaining term, etc for the state to supervise, manage as well as adjust the law to suit the best practice.

b.         Content of the investment reports Investment reports for investment projects

Reports submitted by investment registration authorities to the People’s Committees of provinces include:

–           Quarterly reports made before the 10^th of the first month of the quarter succeeding the reported quarter which specify: capital, net revenue, export, import, workers, taxes, amounts payable to state budget, use of land and water surface.

–           Annual reports made before March 15^th of the year succeeding the reported year, which specify: information on the quarterly reports, profit, income of workers, expenditures on and investment in scientific research and technology development, environmental protection, environmental issues resolution, and origins of technologies used.

Enterprises will write these reports and send them online through the National Investment Information System.

c.         Reporting entities Investment reports for investment projects

According to the law, reporting entities include:

–              Ministries, ministerial agencies and provincial People’s Committees;

–           Investment registration authorities;

–           Investors and business organizations executing investment projects.

In which: 

–              Investor means an organization or individual that makes business investments. Investors include Vietnamese investors, foreign investors, and foreign-invested business organizations.

–              Business organization means an organization established and run under Vietnam’s laws. Business organizations include companies, cooperatives, cooperative associations, and other organizations that make business investments.

–              Investment project means a collection of proposals to make midterm or long-term capital investment in the business in a particular administrative division over a certain period of time.

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3.         Case reports for investment projects

FDI company A does not have an Investment Registration Certificate (does not have a project number) due to investment by capital contribution and purchase shares. Question:

–           How can Company A make an investment report?

–           Is this procedure obligatory or not?

Answer:

Based on the above analysis, Company A as the business organizations executing investment projects will still have to make an investment report. The reporting will be made according to form and procedures by Investment Laws in Vietnam.