Official Letter No. 20011/CTBDU-TTHT dated August 23, 2023 on capital contribution through foreign parent company payments to a land leasing company during the investment preparation phase (prior to license issuance), issued by the Binh Duong Tax Department, provides the following guidance:
- If, before obtaining the establishment license, the foreign investor opens an investment capital account at a licensed bank in Vietnam and uses it to cover legitimate expenses during the initial investment preparation stage, in accordance with foreign exchange management regulations for foreign direct investment (FDI) in Vietnam, the land lease deposit transferred from this investment capital account to the land lessor’s account is considered a valid capital contribution by the investor to the company.
- However, if the foreign investor transfers funds directly from overseas to the land lessor’s account to pay the land lease deposit without using an investment capital account opened at a licensed bank, it is considered non-compliant and the amount will not be recognized as a valid capital contribution by the investor to the company.
