Charter capital, investment capital, legal capital — three terms that appear in every Vietnam company registration, often confused, each with different legal consequences. Getting them wrong affects not just your registration documents, but how much your company can borrow.

This article explains the distinctions, the loan ceiling formula, the 90-day contribution rule, and sector-specific minimums.

Charter Capital and Investment Capital

Charter capital is governed by the Law on Enterprises No. 59/2020/QH14. It is the total value of assets that members or shareholders commit to contribute at incorporation.

Charter capital is recorded in the Enterprise Registration Certificate ("ERC"). It also defines the ceiling on shareholder liability. Members and shareholders are liable for company obligations only up to the amount of their committed contribution.

Investment capital is a broader concept defined in the Law on Investment No. 143/2025/QH15. Under Article 3(23), investment capital is money and other assets used to carry out investment and business activities. These assets must be recognised under Vietnamese civil law and applicable international treaties. The formula is straightforward:

Investment Capital = Charter Capital + Borrowed Capital (bank loans, credit facilities, shareholder loans)

Investment capital is recorded in the Investment Registration Certificate ("IRC"). It is primarily relevant for foreign-invested enterprises ("FIEs").

How the Two Figures Affect Your Borrowing Limit

Charter capital is always part of investment capital (charter capital ≤ investment capital). The difference between the two figures sets a hard ceiling on total medium and long-term borrowing:

Maximum medium and long-term loan = Investment Capital − Charter Capital

This cap covers all medium and long-term debt from both foreign and local lenders. The State Bank of Vietnam ("SBV") enforces it at the point of foreign loan registration. The SBV will not accept an application where the loan would push total medium and long-term debt above the ceiling.

The practical consequence: if you set charter capital too high relative to your registered investment capital, you shrink the loan headroom available to fund the project. Getting the two figures right at the IRC and ERC stage — before any loan agreement is signed — is essential.

A Concrete Example

A company registers investment capital of USD 10 million on its IRC and charter capital of USD 4 million on its ERC. Its medium and long-term borrowing — from all lenders combined — cannot exceed USD 6 million.

The 90-Day Contribution Rule

Charter capital must be fully paid in within 90 days of the ERC issuance date. This applies to LLC members under Article 47 and to JSC shareholders under Article 75 of the Law on Enterprises 2020.

This rule catches many new investors off guard. Setting up a Vietnam bank account, arranging international wire transfers, and preparing documentation all take time. The 90-day clock starts running the moment the ERC is issued, not when the investor is ready.

The practical lesson: sequence your bank account opening, foreign exchange registration, and transfer documentation before the ERC is issued, not after.

What Is "Legal Capital"? Is It the Same as Charter Capital?

No. Vietnamese law uses a third concept: legal capital. This is a statutory minimum imposed by a competent authority for specific regulated business lines. It is the floor below which a company in that sector cannot register.

For most sectors, no legal capital requirement exists. A trading company, consulting firm, technology business, or light manufacturer can register with any charter capital amount. The licensing authority applies an informal sufficiency test: does the declared capital make commercial sense given the business activity?

Minimum Capital Requirements by Sector

For regulated sectors, specific thresholds apply under current law:

Sector Minimum requirement Governing instrument
Banking VND 3,000bn (~USD 120m) Law on Credit Institutions
Insurance – non-life VND 400bn (~USD 16m) Decree 46/2023/ND-CP
Insurance – life / composite VND 1,300bn+ (~USD 52m) Decree 46/2023/ND-CP
Fund management VND 25bn (~USD 1m) Law on Securities
Securities firms Varies by licence scope Law on Securities
Payment intermediaries VND 300bn (~USD 12m) SBV regulations
Transportation (aviation) VND 300bn domestic; VND 700bn international (~USD 28m). Foreign ownership capped at 30%. Law on Civil Aviation; Decree 92/2016/ND-CP
Education (foreign-invested) VND 50bn K–12; VND 1,000bn universities (~USD 40m) Law on Education No. 43/2019/QH14; Decree 86/2018/ND-CP
Healthcare (foreign-invested) USD 20m minimum investment; general hospitals ≥ 100 beds Law on Medical Examination and Treatment No. 15/2023/QH15; Decree 96/2023/ND-CP
Public companies / listed VND 30bn (~USD 1.2m) paid-up Law on Securities

All other sectors — manufacturing, distribution, retail, logistics, software, professional services, hospitality — have no statutory minimum. Charter capital is set by investors based on operational needs, banking relationships, and market credibility.

What This Means in Practice

If you are setting up a new entity in Vietnam, the distinction between charter capital and investment capital affects two separate government filings — the IRC and the ERC. Before filing, confirm three things:

(1) How much equity will you contribute directly? This sets your charter capital.

(2) Will you supplement equity with loans? The combined total sets your investment capital on the IRC.

(3) Does your sector impose a legal capital minimum? If yes, your charter capital cannot fall below that floor.

Getting any of these wrong requires a formal amendment after filing — adding time, cost, and regulatory risk to your setup.

Summary

Concept Governed by Recorded in Includes loans? Minimum for most sectors?
Charter capital Law on Enterprises No. 59/2020/QH14 ERC No No
Investment capital Law on Investment No. 143/2025/QH15 IRC Yes No
Legal capital Sector-specific laws ERC No Only in regulated sectors

Charter capital defines shareholder liability and is the equity floor. Investment capital is the total funding envelope for the project. Legal capital is the statutory floor in regulated industries. All three can apply simultaneously to the same company.

For advice on how to structure your Vietnam investment capital, set the right charter capital at incorporation, or navigate sector-specific minimum requirements, contact Dilinh Legal at contact@dilinh.com.

About the Author

Diep Hoang is the Founding Partner of Dilinh Legal, a business law firm in Ho Chi Minh City. She founded the firm in 2010 and has built it into one of Vietnam's leading practices in Corporate and M&A. Diep has been ranked by Chambers as a leading lawyer in Corporate & M&A since 2020. Dilinh Legal is ranked by Chambers Asia in Corporate & M&A, Dispute Resolution, and Labour & Employment, and by Legal500 in Corporate & M&A and Dispute Resolution.