About us

MATTER:

Converted the offshore loan into the contributed capital

CLIENT:

A Vietnam-based subsidiary of a Singaporean IT company

BACKGROUNDS:

Our Client is a Singaporean-invested enterprise duly established under the laws of Vietnam whose parent company is a regional consulting and SAP implementation company, headquartered in Singapore. Client has focused on retail, wholesale, computer-related and information technology services.

At the end of 2011, Client was set up in Vietnam under a single-member limited liability company (“SLLC”). In 2012, Client decided to take out loans from a Singaporean-registered investor (“Investor”) for the purpose of implementing businesses in Vietnam.

In 2017, Client engaged ATIM LAW FIRM to provide legal advice and supports to help them carry out procedures to convert the aforementioned loans into the contributed capital for the Investor, thereby converting Client from a SLLC into a limited liability company with two or more members (“MLLC”) in accordance with the laws of Vietnam. 

CHALLENGES AND SOLUTIONS

In the context that the applicable laws of Vietnam remained unclear about the increase of charter capital through the conversion of loans into capital contributions of the foreign investor, the Client could be required to explain it to the competent authority such as the Department of Planning and Investment (“DPI”). In this regard, ATIM LAW FIRM already supported the Client to provide detailed explanations as well as prepare any required documents to be submitted to the DPI regarding receiving the capital contribution through offering the loan which the Client has owed the Investor.

The loans were long-term loans. Thus, first and foremost, the Client had to register such loans with the State Bank of Vietnam (“SBV”) and such registration should be done before conducting any conversion procedures.

SERVICES AND RESULTS

ATIM LAW FIRM had successfully supported the Client to proceed with the followings:

• Advised and supported to register loans and loan offerings with the SBV;
• Registered for the capital contribution for the Investor into the Client;
• Increased charter capital of the Client and converted the SLLC into the MLLC to recognize the Investor as a new member of MLLC;
• Registered for the change of the company seal for the Client;
• Amended the Investment Registration Certificate (“IRC”) to recognize the Investor as the new investor of the investment project, and at the same time to increase the investment capital of the project.

Thanks to the close coordination between the Client and ATIM LAW FIRM, all required procedures was completed earlier than expected. Specifically, the registration dossiers for the long-term loan were approved by the SBV in less than 15 (fifteen) days. For capital contribution registration procedures, only after 05 (five) days from the date of application submission, the DPI already issued its approval of capital contribution for the Investor. The application for the conversion of the enterprise type and amendment of the IRC was then approved in just 05 (five) and 15 (fifteen) days, respectively.