From 1 July 2020, the laws surrounding the issuing of Temporary Residence Cards (“TRC”) for small investors in Vietnam change significantly. Foreign investors who currently hold (or are planning to hold) a TRC based upon their individual investment into a Vietnamese company will each need to ensure they invest at least VND 3 billion (approx. USD130,000) as Charter Capital from 1 July 2020, or make alternative plans for their visa/residency status.
ALERT: TEMPORARY RESIDENCE CARDS AND FOREIGN INVESTORS. SIGNIFICANT CHANGES FROM JULY 2020 FOR SMALL INVESTORS IN VIETNAM
1. TRC FOR SMALL INVESTORS IN VIETNAM – What are the changes?
Under current laws, individual foreign investors contributing capital to a Vietnamese company can obtain a TRC, generally for a period of 3 to 5 years.
However, new laws from 1 January 2021 will result a TRC not being available for investors contributing capital of less than VND 3 billion. Individual investors contributing capital in excess of VND 3 billion will be entitled to receive a TRC with periods of up to 10 years, depending on the value of their capital invested.
Individual investors that do not meet the capital requirements will still be able to obtain a 1 year business visa, and can renew that visa when it expires. However, the restrictions in holding a visa versus a TRC should be kept in mind with this change.
2. RECOMMENDATIONS – What should you do?
With the new Immigration Law taking effect from 1 July 2020, foreign investors who do not currently hold a TRC, or where their TRC is to expire in the near future, we suggest individuals to seek to obtain a new TRC or extend the duration of the current TRC before 30 June. This allows investors to temporarily avoid the impact of the new law.
ii) Increase your Charter Capital
Investors can increase the Charter Capital they have contributed to meet the minimum thresholds. This may not be practical or feasible for many small investors, but it should be considered, particularly those with loans to their companies which can be converted to Capital.
iii) Employment TRC
Investors can consider formally holding a position in the company to eligible for a LD (employment) visa, allowing for applications for a 2 year TRC. Notwithstanding, there are requirements as part of this process to have a Work Permit/Work Permit Exemption before applying for the TRC. For the Work Permit process, you can check our publications on our website for more information.
3. FURTHER INFORMATION
For further detailed discussion of the changes to visa and TRC matters for business purposes arising from the changes to the Immigration Law, please review our recent publication: https://www.domicilecs.com/index.php/blog/466-client-alert-december-2019-changes-to-immigration-laws-for-foreign-individuals-in-vietnam
Further discussion of the commercial implications of upcoming changes to immigration and Work Permits for foreign individuals can be seen here: https://www.domicilecs.com/index.php/blog/489-changes-to-labour-laws-and-work-permits-1-january-2021-and-to-residency-and-visas-1-july-2020-for-foreign-individuals-in-vietnam).
For further assistance or any inquiries, please contact us.
Managing Partner, Domicile Corporate Services
Vo Thi Thanh Phuong
Head of Incorporation, Licensing and Secretarial Services, Domicile Corporate Services