Charter Capital and Investment Capital of FDI Companies

Foreign investors often confuse “investment capital” with “charter capital”. Investment capital is the total project implementation capital recorded on the Investment Registration Certificate (IRC), including contributed capital and mobilised capital; charter capital is the capital the owners commit to contribute, recorded on the Enterprise Registration Certificate (ERC). These two figures are independent but related: increasing charter capital may trigger an adjustment of investment capital on the IRC. Common violations are under-contribution, missing the committed contribution schedule, or repatriating profits before fully contributing capital — all punishable and affecting later project adjustments.

For FLAT LAW FIRM’s clients, a good legal work plan must answer three questions: whether the dossier has sufficient legal basis, which authority is competent at the time of implementation, and which option reduces risk while still fitting the client’s commercial or family goals.

This article is written from a practical angle, makes no commitment to outcomes and does not replace individual advice. The analysis is built on current law, while using cautious agency wording following changes to the state apparatus, administrative boundaries and the court system.

Quick summary

Topic	Charter capital and investment capital of FDI companies
For whom	FDI enterprises, foreign investors and in-house legal teams.
Points to check	Capacity, supporting documents, competent authority, timelines and risks arising at the time of filing.
Desired outcome	A clear course of action, standardised documents, quantified risks and business/family decisions made on a cautious legal basis.

Key legal issues: Charter capital and investment capital of FDI companies

Investment capital is the total project implementation capital recorded on the Investment Registration Certificate (IRC), including the investors’ contributed capital and mobilised capital; charter capital is the capital the owners/members/shareholders commit to contribute, recorded on the Enterprise Registration Certificate (ERC). The two figures are independent but closely related: increasing charter capital usually leads to an increase of investment capital on the IRC, and the committed investment capital on the IRC is the basis for the management authority to assess project implementation capacity.

On the contribution deadline, the Law on Enterprises requires owners/members/shareholders to fully contribute the committed capital within 90 days from the date of issuance of the Enterprise Registration Certificate (unless the charter sets a shorter deadline). After the deadline without full contribution, the enterprise must register to reduce charter capital corresponding to the actually contributed portion — a point many FDI companies miss, leaving “virtual” capital on the licence while the actual accounts fall short.

For foreign investors, contribution cash flows must pass through the capital account under foreign exchange management rules (Circular 38/2026/TT-NHNN), and profit repatriation is only allowed once the enterprise has fulfilled its financial obligations and fully contributed the committed capital. Contributing capital in the wrong manner or late is not just an administrative violation but also jams the entire later plan for profit repatriation, capital increases or divestment.

Legal basis and verification sources

Process or dossier checklist

Step 1 — Determine the capital structure: clearly separate charter capital (committed contribution) from total investment capital (including loans and mobilised capital) from the project planning stage; avoid committing charter capital beyond actual contribution capacity.

Step 2 — Open the capital account: the foreign investor opens an investment capital account at a permitted bank in Vietnam to receive and transfer contribution funds under foreign exchange rules.

Step 3 — Contribute on time: complete full contribution within 90 days from ERC issuance; keep complete remittance documents and bank confirmations as accounting and explanation evidence.

Step 4 — Handle under-contribution: promptly register a corresponding charter capital reduction, and simultaneously review whether investment capital on the IRC must also be reduced.

Step 5 — When increasing capital: complete the enterprise registration content change procedure (charter capital increase) and, if it changes total investment capital, the IRC adjustment procedure at the investment registration authority; additional funds from foreign investors continue to flow through the capital account.

Common risks

Risk 1 — “Virtual” capital on the licence: high commitments without full contribution, no reduction adjustment after 90 days — administrative sanctions and loss of credibility with regulators, partners and banks.

Risk 2 — Wrong contribution method: foreign investors transferring contribution funds outside the investment capital account; the cash flow is not recognised as valid contributed capital, causing trouble at audit and profit repatriation.

Risk 3 — Confusing the two kinds of capital: increasing charter capital while forgetting to adjust investment capital on the IRC (or vice versa), so the project’s and the enterprise’s legal dossiers no longer match.

Risk 4 — Repatriating profits before full contribution: treated as violating profit repatriation conditions; may lead to tax and foreign exchange arrears and sanctions.

Risk 5 — Unregistered foreign borrowing: mobilised capital in the form of medium- and long-term foreign loans must be registered with the State Bank; missing this blocks lawful debt repayment abroad.

Competent authorities and filing points

Charter capital changes fall under the business registration authority (Department of Finance) where the enterprise has its head office, following the enterprise registration content change procedure under Decree 168/2025/NĐ-CP. Adjusting project investment capital falls under the investment registration authority that issued the Investment Registration Certificate, following the IRC adjustment procedure of the Law on Investment.

For contribution cash flows and foreign borrowing, the enterprise works with permitted commercial banks (investment capital account) and the State Bank (registration of medium- and long-term foreign loans). Capital-related tax obligations (corporate income tax on capital transfers, withholding) belong to the directly managing tax authority.

When to contact a lawyer

A lawyer should be involved when capital values are large, where foreign elements are present, or when a quick decision is needed before signing, contributing or filing. For capital topics specifically, contact a lawyer early in three cases: (1) at initial capital planning, to design a fitting and feasible charter capital/investment capital/borrowing structure; (2) when full contribution cannot be made within the 90-day deadline, to handle the capital reduction properly; (3) before repatriating profits or increasing/reducing capital, to review conditions and avoid foreign exchange and tax blockages.

What FLAT LAW FIRM does

FLAT LAW FIRM supports document review, legal issue identification, source-of-law verification, evidence assessment and action-plan building in Vietnamese, Chinese and English.

For foreign clients or Chinese-speaking investors, we help translate business or family requirements into specific legal checklists, avoid crude machine translation, and ensure key terms are understood consistently across parties.

The scope of support may include initial consultation, document drafting, contract review, dossier standardisation, liaison with related parties, dispute material preparation and coordination with counsel when representation in formal procedures is needed.

Talk to FLAT LAW FIRM

If your enterprise or foreign investors need support on investment, licences, contracts, disputes or retainer legal advisory in Vietnam, FLAT LAW FIRM can assess the issue, propose options and implement the appropriate work. Please contact us for advice.

FAQ

How do investment capital and charter capital differ?

Investment capital is the total project implementation capital (on the IRC), including investors’ contributed capital and mobilised capital. Charter capital is the capital the owners commit to contribute (on the ERC). Charter capital is usually part of investment capital.

What is the deadline for full charter capital contribution?

The Law on Enterprises requires members/shareholders to fully contribute charter capital within 90 days from the date of issuance of the Enterprise Registration Certificate, unless the charter sets a shorter deadline.

Is in-kind contribution allowed?

Yes, provided the contributed assets are properly valued and ownership is lawfully transferred to the company. Cash contributions by foreign investors must go through the investment capital account under foreign exchange rules.

Does increasing investment capital require IRC adjustment?

Yes. A change in the project’s total investment capital triggers the Investment Registration Certificate adjustment at the investment registration authority.

Can profits be repatriated before full capital contribution?

Not recommended. Repatriating profits before fulfilling capital contribution obligations may be treated as a violation and cause blockages when tax authorities and banks inspect.

When is a lawyer needed?

When the capital structure is complex (multiple investors, foreign borrowing), when increasing/reducing capital, or when there are contribution disputes between parties.