EnglishA foreign-owned company in Vietnam must open at least 02 bank accounts, which are: a Direct Investment Capital Account and a Current Account in VND. The company may choose to open additional bank accounts if necessary. Each type of bank account serves different purposes regulated by laws. This article will introduce you to certain rules regarding the use of company bank accounts in Vietnam.
Direct Investment Capital Account (DICA)
1. What is a DICA?
Direct Investment Capital Account (DICA) is a specialized current account, in either foreign currency or in Vietnamese Dong, opened by a foreign-owned company at an authorized bank. This DICA facilitates lawful transactions associated with foreign direct investment activities in Vietnam.
A company is restricted to opening DICAs (in either foreign currency or VND) at only one authorized bank in Vietnam.
2. Contributing the investment capital to DICA
For newly established FDI companies, investors must fully contribute the investment capital (in the currency registered for capital contribution) by transferring capital from the investors’ bank accounts to the company’s DICA. Investors must ensure that the amount of capital contributed to the DICA exactly matches the recorded amount in the Investment Registration Certificate/M&A Approval.
The deadline for capital contribution is within 90 days from the date of issuance of the Enterprise Registration Certificate. Failure/late/insufficient capital contribution may result in a fine ranging from 70,000,000 VND to 100,000,000 VND
3. How to use DICA?
Since the DICA is a special current account used for purposes related to investment capital, companies can only conduct the following permitted to collect or pay transactions through the DICA:
| Collection transactions | Payment transactions |
| – Transfer investment capital contribution in foreign currency – Payment for the transfer of investment capital and investment projects – Transfer foreign currency purchased from authorized banks in order to transfer capital, profits, and other lawful incomes abroad – Transfer money from current accounts in foreign currency in order to transfer capital, profits, and other lawful incomes abroad – Convert foreign currency to contribute investment capital in case the currency of capital contribution is different from the currency of the opened DICA account – Transfer of share capital surplus from the issuance of new shares to increase charter capital – Transfer related to foreign loans of companies – Other legal revenues in foreign currencies related to foreign direct investment activities in Vietnam | – Transfer money to current accounts in VND opened at an authorized bank of the company to perform investment activities – Transfer money in foreign currency to pay the transfer value of investment projects and investment capital – Buy foreign currency to transfer capital, profits, and other lawful incomes abroad – Transfer investment capital in VND to Vietnamese investors, or buy foreign currency to transfer to foreign investors in case the company is dissolved, terminates operations, transfers investment projects and investment capital, reduces investment capital, or liquidates or terminates the company’s operations – Transfer foreign currency to a credit institution to transfer to a payment account in VND – Other legal foreign currency payments related to foreign investment activities in Vietnam |
Other transactions, such as receiving contract payments, and paying payments, will be done through current accounts, not through a DICA.
Companies may be fined from VND 30,000,000 to VND 50,000,000 for failing to comply with the provisions of the law on opening, using, and closing DICA.
Current Account in VND
A Current Account in VND currency is designated for transactions related to daily business activities other than DICA’s purposes, such as: receiving payments, payment of contracts, salaries, taxes.
Companies must open at least one current account in VND currency and can opt to open additional VND current accounts in different banks.
Here are several basic rules when using the company’s current accounts:
- It is necessary to maintain a minimum balance on each current account to avoid deductions (please inquire with your bank).
- Companies also need to register with the bank to activate the electronic tax payment service through the current bank account
- For expenditures from 20 million VND or more, the company must process payments through a current account to facilitate CIT calculation and input VAT deduction.
- All inflows and outflows from your company’s bank accounts require sufficient supporting documents. Avoid using the company account other purposes than serving business purposes.
- The company, as an independent legal entity, should not transfer money from a company account to a personal account for personal purposes.
- For each money transfer order, signatures from authorized positions are required. For example, a money order must at least be signed by the director, chief accountant, and individual performing the task (if any)
Current Account in foreign currencies (optional)
A company is allowed to open additional current accounts in foreign currencies to conduct transactions in foreign currencies, such as USD, EURO, KRW, AUD, GBP, JPY.
Given that most transactions within Vietnam are restricted to the use of foreign currencies, a Current Account in a specific foreign currency will be primarily used in international-related transactions, such as receiving contract payments in USD from foreign business partners, or making products or services payments in USD to foreign business partners.
To Wrap Up
Nova Law has introduced to you some basic rules for using company bank accounts in Vietnam. In practice, additional requirements may apply. Please seek advice from your bankers, accountants or lawyers for more information.
