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The Cash Flows under Nominee Company
Accordingly, please see the process and cash flow as below to make it comply with the laws of Vietnam for your reference
- Step 1: You lend the trustee the loan, equivalent to the registered charter capital; and
- Step 2: The trustee uses the loan to be injected into the bank account of the local company controlled by the foreigner so that the trustee fulfills her/his obligation of capital contribution as required by law.
- Step 1: After the foreigner obtains the approval on the capital acquisition of the local company from the trustee, the local company opens its DICA at a licensed bank in Vietnam;
- Step 2: The foreigner transfers the purchase price of capital acquisition (which is equivalent to the registered charter capital and the loan) into the DICA of the local company opened in Step 1;
- Step 3: The purchase price of capital acquisition in the DICA of the local company is transferred to the transaction account of the local company so that the local company acts on behalf of the trustee to conduct the tax declaration for capital transfer of the trustee with the tax authority; and
- Step 4: To repay the loan under the 1st cash flow, the local company delivers the purchase price of capital acquisition in the transaction account of the local company in cash to the foreigner in Vietnam or transfer such amount to a bank account in Vietnam designated by the foreigner.
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