05 THINGS FOREIGN INVESTORS NEED TO KNOW WHEN TRANSFERING PROFITS ABROAD

05 THINGS FOREIGN INVESTORS NEED TO KNOW WHEN TRANSFERING PROFITS ABROAD

During business investment activities in Vietnam, profitable foreign investors will have the desire to transfer profits back home. To be able to carry out this activity, it must meet a number of legal conditions. To support businesses on this issue, HTC Vietnam Law Company Limited will provide 05 things foreign investors need to keep in mind when transferring profits abroad.

1. Assets transferred from Vietnam to foreign countries

Profits foreign investors transfer from Vietnam to their home country can be in money or in kind. They are understood as legal profits earned from investment activities in Vietnam, after tax obligations have been deducted. Include:

- Investment capital, investment liquidation.

- Income from business investment activities.

- Money and other assets are legally owned by investors.

2. How to transfer profits from Vietnam to foreign countries

- The company decides on its own the amount of profits to be transferred abroad but must ensure that these arising profits are deducted from the transfer of losses from previous years, if there are no accumulated losses on the audited financial statements. (In case it has been inspected by the tax authority, the inspection number will be taken) and has fulfilled its financial obligations to the State, the Company can transfer profits abroad. Profits transferred abroad in money according to the provisions of law on foreign exchange management are as follows:

- Foreign investors must transfer abroad through a direct investment capital account.

- In case an enterprise with foreign direct investment capital must close its direct investment capital account due to dissolution, bankruptcy, termination of the enterprise's existence or due to transfer of investment project that changes the registered legal entity Initial registration of an enterprise with foreign direct investment capital, the foreign investor is allowed to use a payment account in foreign currency, a payment account in Vietnamese Dong of that foreign investor opened at a bank are allowed to carry out foreign currency purchases, transfer direct investment capital and legal revenue abroad.

- Profits are transferred abroad in kind and converted in kind according to the provisions of law on import and export of goods and relevant laws.

3. Procedures for transferring profits abroad

- The foreign investor directly or authorizes the enterprise in which the foreign investor participates in the investment to notify the transfer of profits abroad to the tax authority directly managing the enterprise.

- The company transfers profits abroad after 07 working days from the date of sending the notification to the direct tax authority.

4. Cases where profits cannot be transferred abroad

- Foreign investors are not allowed to transfer profits abroad when the investor's profits are from investment activities in case the enterprise's financial statements still have accumulated losses according to the provisions of law. on corporate income tax. Thus, in this case, the enterprise must pay all tax debts before the foreign investor's profits can be transferred abroad.

5. Is there any tax or fee when transferring profits abroad?

- When transferring profits abroad, the company notifies the tax authority according to the prescribed form and if capital contributing members are foreign organizations, they do not have to declare or pay any additional taxes in Vietnam. In case capital contributing members are individuals, before the Company transfers profits abroad, the Company must declare and pay personal income tax according to regulations.

Benefits when businesses invite lawyers to advise on transferring profits abroad

- Firstly, be advised on the conditions for transferring profits abroad according to current laws, avoiding risks for businesses. Because not all businesses or investors clearly understand the provisions of Vietnamese law on transferring profits abroad, then a lawyer who understands the provisions of the law will provide specific guidance and advice. for customers.

- Second, be advised on ways and procedures to transfer profits abroad. At that time, the Lawyer will represent the investor to carry out procedures for transferring profits abroad, saving time, costs and avoiding risks for investors.

Consulting service for transferring profits abroad of HTC Vietnam Law Firm

HTC Vietnam Law Firm provides consulting services on transferring profits abroad:

- Consulting on cases where Vietnamese law allows transferring profits abroad.

- Consulting on the order, procedures and methods of transferring profits abroad.

- Support legal issues during the process of transferring profits abroad.

Commitment to service quality:

HTC Vietnam Law Firm operates with the motto of dedication - efficiency - prestige, committed to ensuring service quality, specifically as follows:

- Ensure work is carried out according to the agreed schedule, ensure compliance with legal regulations, and with the ethical and behavioral codes of Vietnamese lawyers.

- Put customer interests first, try our best to provide customers with the best quality service.

- Confidentiality of information provided by customers and information related to customers.

We look forward to long-term cooperation with the development of our customers.

Best regards!

(Written by: Ta Thi Thin/172, date of writing: October 5, 2021)

For advice please contact:

HTC Vietnam Law Firm

Address: 15th Floor, Building, No. 169 Nguyen Ngoc Vu, Trung Hoa Ward, Cau Giay District, Hanoi.

Tel: 0989.386.729; Email: htcvn.law@gmail.com, [email protected],

Website: https://htc-law.com; https://luatsuchoban.vn