Vietnam bank account foreign-owned companies: opening guide

Vietnam bank account foreign-owned businesses need first is the direct investment capital account. The State Bank of Vietnam rules use it to track money that moves between a foreign investor and the Vietnamese project. Open it early, before any capital is sent. This is general information only. For your own account setup, a licensed bank or a Vietnamese lawyer can give you advice.

Source: State Bank of Vietnam, Circular No. 19/2013/TT-NHNN of 2013 on foreign exchange management for direct investment in Vietnam.

What the account is

The direct investment capital account is a bank account held at a licensed bank in Vietnam. Its job is narrow. It records the money a foreign investor sends in to fund a Vietnamese business, and the money that later leaves as profit or returned capital.

Think of it as the official channel for investment money, so the State Bank can see where capital came from and where it went. Ask your bank which payments the account may carry, and keep your everyday spending in a separate account.

The rule rests on the Ordinance on Foreign Exchange of 2005, which sets the base rules for foreign currency in Vietnam. The State Bank issued Circular 19/2013/TT-NHNN in 2013 to explain how direct investment fits under those rules.

Sources: Ordinance on Foreign Exchange, No. 28/2005/PL-UBTVQH11 of 2005; State Bank of Vietnam Circular No. 19/2013/TT-NHNN.

Who needs one

A foreign investor that puts money into a Vietnamese project for direct investment needs the account. That covers a company set up with foreign owners, a joint venture, and a foreign buyer of shares or capital in a Vietnamese company. Ask your bank who should hold the account in your case, because the answer depends on how the deal is set up.

Other kinds of investment, such as buying listed shares as a passive holder, can follow different rules, so do not treat this guide as covering them. Not sure how the rules treat your deal? Ask a licensed bank or a Vietnamese lawyer before you send any money.

Source: State Bank of Vietnam Circular No. 19/2013/TT-NHNN.

What passes through it

The account is meant for capital movements tied to the investment. In plain terms, these include:

• Capital paid in by the foreign investor.
• Money used to buy shares or capital in a Vietnamese company.
• Profit that the investor sends back home.
• Capital returned to the investor, for example when the investor sells or the business winds up.

Keep other money out of it. Mixing everyday spending into the account makes your records hard to follow and can cause problems when you try to transfer funds abroad.

Source: State Bank of Vietnam Circular No. 19/2013/TT-NHNN.

One more point on records. Name each transfer clearly, for example "capital contribution" or "profit transfer", so the purpose is plain to anyone who reads the statement. Keep the bank's receipts, the transfer messages and the dates in one folder. A clean file saves time when the bank, your accountant or an official asks how the money moved.

Steps to open it

The exact paperwork differs from bank to bank, so call first. The usual path looks like this:

1. Choose a licensed bank in Vietnam. Compare fees and ask how fast it can process foreign transfers.
2. Gather your documents. Banks normally ask for your investment paperwork, your company papers and ID for the people who sign.
3. Have papers from abroad translated into Vietnamese and made official, if the bank asks.
4. Submit the application and open the account.
5. Send your capital through this account, and keep every transfer record.

Open the account before you send the first dollar. Money that arrives outside the proper channel can be hard to fix later. Ask the bank to confirm in writing which currency the account will use and how it will handle each transfer. Also ask what the bank charges for incoming and outgoing transfers, so the cost of moving money is not a surprise.

Source: State Bank of Vietnam Circular No. 19/2013/TT-NHNN. Document lists vary by bank, so confirm with the bank.

Common mistakes to avoid

New investors repeat the same few errors. Avoid them and your first year is much smoother.

First, paying capital into a personal account or into the company's ordinary account. Second, losing the transfer records. You will want a clear trail when you later ask the bank to send profit abroad. Third, assuming one bank's checklist applies at another bank. Fourth, waiting until the money is ready before asking questions.

Also plan for time. Banks check documents carefully, and a missing paper can add days. Ask for a written list of what they need, and give yourself a buffer before any deadline.

Source: State Bank of Vietnam Circular No. 19/2013/TT-NHNN; Ordinance on Foreign Exchange, No. 28/2005/PL-UBTVQH11.

Sources

• Ordinance on Foreign Exchange, No. 28/2005/PL-UBTVQH11 (2005).
• State Bank of Vietnam, Circular No. 19/2013/TT-NHNN (2013), on foreign exchange management for direct investment.