How to transfer profits earned from business investment in Vietnam to overseas?
Transferring profits earned from business investment in Vietnam to overseas is an issue that always attracts great attention from foreign investors when investing in Vietnam. One of the investment security measures that the State commits to when foreign investors make investment in Vietnam is to secure the transfer of foreign investors’ assets. The following information will guide the answers to investors: When can investors transfer profits abroad; Conditions for transferring profits abroad; Form of transfer of profits abroad; Determine the amount of profits transferred abroad
When can investors transfer profits abroadThere are two moments
Transfer profits abroad annually (after the end of the fiscal year)Transfer profits abroad at the end of direct investment activities in Vietnam Conditions for transferring profits abroadIn general, with these two moments, investors need to ensure some conditions
Fulfilling financial obligations to the State of Vietnam, including the full performance of obligations as prescribed by the Law on Tax Administration in case of the end of investment projects Submitted audited financial statements and corporate income tax finalization declarations for fiscal year No more accumulated losses after having transferred losses as prescribed Form of transfer of profits abroad In kind: To convert the value of artifacts in accordance with the law on import and export of goods and the provisions of relevant laws In VND or foreign currency: Must comply with the law on foreign exchange management Determine the amount of profits transferred abroadProfit transferred = Profit earned in fiscal years up to the time of transfer profit (*) – The profits were used for reinvestment, moved overseas during operations, and the amounts used for other expendituresforeign private in Vietnam
(*) Determining according to audited financial statements, corporate income tax finalization declarations of foreign-invested enterprises or profits after the end inspection/inspection)
Transferring profits earned from business investment in Vietnam to overseas is an issue that always attracts great attention from foreign investors when investing in Vietnam. One of the investment security measures that the State commits to when foreign investors make investment in Vietnam is to secure the transfer of foreign investors’ assets. The following information will guide the answers to investors: Prepare documents; Submission of documents; Mode of profit remittance abroad; Tax obligations.
Prepare documents:After determining the conditions for the transfer of profits and the amount of profits to be transferred, FDI enterprises in Vietnam shall prepare the following documents.
Notice of the remittance of profits abroad using the form issued together with Circular 186/2010 / TT-BTC (Notice form attached: …)Note, in case the enterprise transfers accumulated profits for many years, make 01 notice in the form for the whole period and on the notice the Company specifies the amount of profit transferred for each year (Official Letter 55077 / CT -TTHT)
Authorization letter from the foreign investor for the invested enterprise to submit the applicationOther attachments for the remittance of profits, for example:– For a limited company: The decision to transfer profits abroad of the invested enterprise
– For a joint stock company: Resolution of the General Meeting of Shareholders on the implementation of the dividend payment
Submission of documents:Deadline: At least 07 working days before remitting profits abroadPlace of submission: Tax authorities directly manage FDI enterprisesImportant Note: During these 7 working days, tax officers will check the completeness and reasonableness of the documents and compare tax debts on the tax authority’s management system and request enterprises’s explanation if necessary Mode of profit remittance abroad:In kind: To convert the value of in kind in accordance with the law on import and export of goods and the provisions of relevant laws. In VND or foreign currency: Must comply with the laws on foreign exchange managementNote: Transfer profits abroad through investment capital account. The company should contact the commercial bank for more specific information about the application to be submitted to the bank as some banks may have different documentation requirements. Usually, the application only includes a copy of the profit remittance dossier submitted to the tax authority.In addition, with the debt clearing method, different perspectives are being applied at present, so the company needs to send a written request to the supervisory tax authority.
Tax obligationsFor institutional investors, FDI enterprises in Vietnam are not required to deduct any additional tax liability.For individual investors, FDI enterprises in Vietnam must deduct PIT at the rate of 5%._____________________________________________________________________
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