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Official Gazette

Thursday, December 3, 2020

Offshore investment placed under stricter control

Updated: 15:59’ - 06/11/2020
Individuals would be banned from purchasing houses in foreign countries, according to a draft decree on offshore investment formulated by the Ministry of Planning and Investment (MPI) to replace Decree 83 of 2015. 

According to the MPI, the new regulation aims to prevent individuals from investing in real estate for acquisition of foreign citizenship, money laundering or dispersion of assets.

Under the draft decree, which has 47 articles arranged in six chapters, 23 articles of Decree 83 would be amended, 17 kept unchanged, and one annulled while seven new ones would be added.

Noteworthily, the draft specifies subjects banned from making investment overseas in any forms, including cadres, civil servants and public employees; officers, non-commissioned officers, and professional soldiers; and state enterprises’ leaders and managers. Juveniles, persons having their civil act capacity restricted or lost, and persons being examined for penal liability would also be subject to the ban.

The draft also adds stricter provisions on investment licensing. Specifically, when receiving a dossier of application for an investment registration certificate for an offshore investment project capitalized at VND 20 billion (USD 860,100) or higher, even if the project is not required to obtain investment policy approval from the Prime Minister or National Assembly, the MPI would still request the State Bank of Vietnam to provide information on the investor’s transfer of capital abroad and certify whether the investor infringes forex management regulations and on that basis, decide to approve or reject the investor’s application.

Another important point of the draft decree is a provision on foreign-invested economic institutions’ overseas investment activities. Accordingly, foreign-invested enterprises operating in Vietnam may use undistributed post-tax profits or additional charter capital to make offshore investment. The addition of such provision, as explained by the MPI, aims to avoid possible adverse impacts on foreign investor’s ongoing projects in Vietnam.- (VLLF)

 

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