1. What Is Charter Capital?

Charter capital (also called registered capital) refers to the total amount of money or assets that the founding members of a company agree to contribute when registering the company with the Vietnamese authorities. This amount is declared in the Enterprise Registration Certificate (ERC) issued by the Department of Planning and Investment (DPI) and reflects the financial commitment of the shareholders to the company.

Charter capital is important because:

• It defines the company’s operational scope and capacity, especially in the early stages before revenue is generated.

• It forms the basis for the distribution of ownership and voting rights among shareholders.

• It helps demonstrate the company’s financial reliability to partners, investors, and regulatory bodies.

Example:

If three shareholders contribute USD 10,000, USD 20,000, and USD 70,000 respectively, the total charter capital is USD 100,000. The ownership ratios would be 10%, 20%, and 70%.

Minimum Capital Requirements

Vietnam does not require a minimum charter capital for most common business sectors such as trading, consulting, and IT. However, regulated industries such as banking, insurance, securities, education, and real estate may have mandatory legal capital thresholds set by specific laws or sub-laws. For example:

• Commercial banks: minimum VND 3,000 billion

• Real estate companies: minimum VND 20 billion for project investment

Founders must review the relevant legal documents based on the business line code (VSIC code) they choose during company registration.

2. Charter Capital Contribution Deadline and Methods

Contribution Deadline: 90 Days After ERC Issuance

Under Articles 47, 75, and 113 of the Law on Enterprises 2020, founders must fully contribute the committed charter capital within 90 calendar days from the date of issuance of the ERC. This deadline does not include time required for transferring or registering ownership of non-cash contributed assets, such as machinery or intellectual property.

If the capital is not fully contributed by the deadline:

• The company must adjust the charter capital downward to match the actual contributed amount.

• The unfulfilled contributions are considered invalid, and the relevant shareholders may lose voting rights or be subject to removal.

• The company may be fined or requested to resubmit documents to the DPI.

It’s crucial to plan in advance to ensure timely transfer, especially for foreign investors dealing with international banking procedures.

Accepted Methods of Contribution

There are two legally recognized methods of contributing capital in Vietnam:

1. Cash Contributions

• Domestic investors deposit funds into the company’s regular business bank account.

• Foreign investors must contribute through a Direct Investment Capital Account (DICA) opened at a licensed commercial bank in Vietnam. This account is mandatory for all capital injections and profit repatriations related to foreign direct investment (FDI).

2. Non-Cash Contributions

• Includes machinery, equipment, office supplies, intellectual property (IP), software licenses, land use rights, or other physical/intangible assets.

• Assets must be valued by an independent valuation company or agreed upon by all shareholders.

• Proper documentation (contracts, invoices, IP ownership certificates, land use documents) is required to prove ownership and legality.

Legal Note:

All contributions must be recorded in the company’s accounting books and reflected in the charter capital section of the updated ERC.

3. Foreign Capital Contribution Process

Foreign investors are subject to strict capital contribution procedures under Vietnam’s Law on Investment and foreign exchange control laws. All contributions must be clearly traceable to ensure the capital is legally recognized.

Step-by-Step Process for Foreign Investors

✅ Step 1: Open a Direct Investment Capital Account (DICA)

• Must be opened in Vietnamese Dong (VND) at a licensed commercial bank authorized for foreign exchange and investment transactions (e.g., Vietcombank, BIDV, HSBC).

• The account is used exclusively for receiving charter capital and future remittances, such as profits or capital returns.

• Each foreign investor must contribute through this account—joint or third-party transfers are not allowed.

✅ Step 2: Transfer Capital from Overseas

• Capital must be sent via bank transfer from the investor’s account abroad.

• Transfer description should include the company name and purpose (e.g., “Capital contribution for ABC Co., Ltd”).

• Ensure your bank provides swift confirmation and documents to prove the source of funds.

✅ Step 3: Confirm Receipt and Notify Authorities

• After capital arrives in the DICA, the company must issue capital contribution receipts and update the accounting records.

• The contribution must be certified in a capital contribution report submitted to the DPI or Investment Authority.

• If the actual received amount is slightly less than declared due to intermediary bank fees, this can be explained—but always confirm with the bank beforehand.

⚠️ Common Mistakes to Avoid:

• Using third-party accounts (e.g., spouse or business partner) for transfers

• Sending funds to operational expense accounts instead of the DICA

• Missing deadlines due to banking delays or compliance errors

• Incomplete SWIFT documentation to prove remittance origin.

• Relying on intermediary parties (e.g., lawyers or relatives) to transfer funds on the investor’s behalf.

4. Adjusting Charter Capital After Incorporation

After incorporation, companies may decide to increase or decrease their charter capital based on funding needs, investor changes, or business expansion.

🔼 Increasing Charter Capital

Typical reasons:

• Adding new shareholders or investors

• Expanding operations or projects

• Improving business credibility

Procedure:

1. Hold a shareholders’ meeting and approve the increase

2. Amend the charter and ERC with the DPI

3. Receive new contributions within 90 days

4. Update the company’s accounting and bank records

Legal Note: New shareholders may be subject to foreign ownership restrictions depending on the business line.

🔽 Decreasing Charter Capital

A decrease in charter capital is allowed only if the company:

• Has been in operation for at least two full years;

• Has settled all debts and tax obligations;

• Maintains legal capital thresholds (if applicable);

• Obtains approval from the DPI, and notifies the tax authority and bank within 10 working days after completion.

Common cases:

• Downsizing operations

• Canceling unfulfilled capital commitments

• Adjusting ownership structure

5. The Importance of Charter Capital in Business Operations

Charter capital is more than a registration requirement—it has real-world impacts on business management, credibility, and planning.

Legal Compliance

• Avoid penalties by meeting the 90-day contribution deadline

• Ensure proper documentation for all contributions

• Meet legal capital thresholds for licensed industries

Business Credibility

• Partners, suppliers, and banks often assess the registered capital when deciding whether to cooperate or offer credit.

• Higher capital shows financial stability, especially in bidding or tendering processes.

Financing and Investment Planning

• While charter capital is not taxed, it may influence:

  • Loan amounts banks are willing to offer

  • Investor confidence and valuations

  • Compliance in sectors that require certain capital-to-asset ratios

Conclusion

Charter capital plays a crucial role in establishing and growing a business in Vietnam. Whether you’re a local entrepreneur or a foreign investor, understanding the full scope of capital contribution regulations, deadlines, and documentation is essential for legal compliance and operational success.

At Green NRJ, we specialize in supporting investors through every step of the incorporation process—from drafting capital contribution plans to opening DICA accounts and completing registration procedures.

📞 Contact us today for expert guidance on company formation and charter capital compliance in Vietnam.

Related Articles

• How to Start a Business in Vietnam: A Complete Guide for 2025
• 5 Common Business Registration Mistakes in Vietnam – And How to Avoid Them!