The following will provide detailed information on the simulation of the entire process of capital increase/decrease for three different types of companies: Limited Liability Company (LLC), Joint Stock Company (JSC), and Wholly Foreign-Owned Enterprise (WFOE).

Capital Increase/Decrease Procedures for Limited Liability Company (LLC)

Simulation scenario: ABC Limited Liability Company, with a current registered capital of 10 billion VND, plans to increase its capital to 15 billion VND.

Capital Increase Procedure

Step 1: Internal Decision-making

Convene a members’ meeting (for multi-member LLC) or prepare a member’s decision (for single-member LLC). Discuss and approve the capital increase plan, including: Increase amount: 5 billion VND. Method of increase: Cash contribution. New contribution ratio for each member. Timetable for increase: To be completed within 90 days after the resolution. Prepare minutes of the members’ meeting and resolution/member’s decision.

Step 2: Amend the Company Charter

• Modify relevant clauses of the company charter according to the new registered capital and contribution ratios.
• All members/owners sign the new version of the company charter.

Step 3: Prepare Application Documents

• Fill out the capital increase application form (standard format provided by the Business Registration Office).
• Prepare the following documents: Members’ meeting resolution/owner’s decision (original in Vietnamese). Amended company charter (original in Vietnamese). Copy of the current business license. Capital increase commitment letter (stating the amount, method, and time of increase) . Legal representative’s identity document.

Step 4: Submit Application

• Submit documents to the Business Registration Office where the company is registered.
• Pay the application fee (usually 100,000 VND).
• Obtain receipt and estimated processing time.

Step 5: Await Approval

• The Business Registration Office reviews the documents (usually takes 3-5 working days).
• Respond promptly and provide additional materials if required.

Step 6: Obtain New Business Documents

• Collect the updated business license showing the new registered capital.
• Carefully verify all information on the business license.

Step 7: Follow-up Work

• Complete the actual capital increase within 90 days (transfer funds to the company account).
• Obtain a capital verification report issued by the bank.
• Update the company seal (if it displays the registered capital amount).
• Report the change in registered capital to tax authorities.
• Update bank account information.
• Notify relevant business partners.

Capital Decrease Procedure

Simulation scenario: ABC Limited Liability Company, with a current registered capital of 15 billion VND, plans to decrease its capital to 10 billion VND.

Step 1: Internal Decision-making

• Convene a members’ meeting or prepare owner’s decision.
• Discuss and approve the capital decrease plan, including: Decrease amount, 5 billion VND. Reason for decrease, Business adjustment, reduced capital requirement. New contribution ratio for each member after the decrease. Debt handling plan.
• Prepare minutes of the members’ meeting and resolution/member’s decision.

Step 2: Notify Creditors

• Draft a capital decrease announcement, including: Company name and address. Current registered capital and planned reduced registered capital. Reason for capital decrease. Debt restructuring plan. Method and deadline for creditors to raise objections.
• Publish the capital decrease announcement on the company website and in a national newspaper.
• Announcement period should be no less than 45 days.
• Record and address creditor objections (if any).

Step 3: Amend the Company Charter

• Modify the company charter according to the new registered capital and contribution ratios.
• All members/owners sign the new version of the company charter.

Step 4: Prepare Application Documents

• Fill out the application form
• Prepare the following documents: Members’ meeting resolution/owner’s decision (original in Vietnamese). Amended company charter (original in Vietnamese).Copy of the current business license. Proof of creditor notification (newspaper copies, website screenshots, etc.). Latest financial statements. Capital decrease plan, including debt handling scheme. Legal representative’s identity document.

Step 5: Submit Application

• Submit documents to the Business Registration Office where the company is registered.
• Pay the application fee.
• Obtain receipt and estimated processing time.

Step 6: Await Approval

• The Business Registration Office reviews the documents (may take 5-7 working days).
• Be prepared for possible additional inquiries or requirements.

Step 7: Obtain New Business Documents

• Collect the updated business license showing the new registered capital.
• Carefully verify all information on the business license.

Step 8: Follow-up Work

• Execute the capital decrease, returning excess funds to members/owners.
• Update the company seal (if necessary).
• Report the change in registered capital to tax authorities and update tax registration information.
• Update bank account information.
• Notify relevant business partners.

Capital Increase/Decrease Procedures for Joint Stock Company (JSC)

Simulation scenario: XYZ Joint Stock Company, with a current registered capital of 50 billion VND, plans to increase its capital to 70 billion VND through issuing new shares.

Capital Increase Procedure

Step 1: Internal Decision-making

• Convene a Board of Directors meeting to discuss the capital increase plan.
• Convene a General Shareholders’ Meeting to approve the capital increase resolution, including: a) Increase amount: 20 billion VND b) Method of increase: Issuing new shares c) Price and quantity of new shares d) Existing shareholders’ preemptive rights e) Timetable for increase.
• Prepare Board of Directors resolution and General Shareholders’ Meeting resolution.

Step 2: Prepare Issuance Plan

• Develop a share issuance plan, including: Purpose of issuance. Quantity and face value of shares. Details of issuance targets. Issuance price and pricing reference. Issuance timetable. Plan for use of raised funds.
• If public offering is involved, obtain approval from the State Securities Commission (SSC)

Step 3: Implement Issuance

• Inform existing shareholders of their preemptive rights (at least 15 days).
• Collect subscription applications from existing shareholders.
• Issue remaining shares to other target investors.
• Collect share payments (usually required to be completed within 15 days).

Step 4: Prepare Application Documents

• Fill out the capital increase application form
• Prepare the following documents: Board of Directors resolution and General Shareholders’ Meeting resolution (original in Vietnamese). Amended company charter. Copy of current business documents. Proof of capital increase (bank deposit certificate). Report on new share issuance results. Updated shareholder register. Legal representative’s identity document.

Step 5: Submit Application

• Submit documents to the Business Registration Office where the company is registered.
• Pay the application fee.
• Obtain receipt and estimated processing time.

Step 6: Approval Process

• Wait for the Business Registration Office to review (usually 3-5 working days).
• Provide additional materials promptly if required.

Step 7: Obtain New Business Documents

• Collect the updated business license showing the new registered capital.
• Carefully verify all information on the business license.

Step 8: Follow-up Work

• General Shareholders’ Meeting resolution.
• Update the company seal (if necessary).
• Report the change in registered capital to tax authorities.
• Update the shareholder register at the Vietnam Securities Depository (VSD).
• If listed, notify the stock exchange.

Capital Decrease Procedure

Simulation scenario: XYZ Joint Stock Company, with a current registered capital of 70 billion VND, plans to decrease its capital to 50 billion VND through share buyback and cancellation.

Step 1: Internal Decision-making

• Convene a Board of Directors meeting to formulate the capital decrease plan.
• Convene a General Shareholders’ Meeting to approve the capital decrease resolution, including: Decrease amount: 20 billion VND. Method of decrease: Share buyback and cancellation. Share buyback price and quantity. Debt handling plan.
• Prepare Board of Directors resolution and General Shareholders’ Meeting resolution.

Step 2: Notify Creditors

• Draft a capital decrease announcement.
• Publish the announcement on the company website and in a national newspaper.
• Announcement period should be no less than 45 days.
• Record and address creditor objections (if any).

Step 3: Implement Share Buyback

• Develop a detailed share buyback plan.
• Announce the share buyback plan (at least 20 days in advance).
• Execute the share buyback (buyback period not exceeding 30 days).
• Cancel the purchased shares.

Step 4: Prepare Application Documents

• Fill out the application form
• Prepare the following documents: Board of Directors resolution and General Shareholders’ Meeting resolution. Amended company charter. Copy of current business license. Proof of creditor notification. Latest financial statements. Documents proving share buyback and cancellation. Updated shareholder register. Legal representative’s identity document.

Step 5: Submit Application

• Submit relevant documents to the Business Registration Office.
• Pay the application fee.
• Obtain receipt and estimated processing time.

Step 6: Approval Process

• Wait for review (may take 5-7 working days).
• Be prepared for additional inquiries or requirements.

Step 7: Obtain New Business Documents

• Collect the updated business license showing the new registered capital.
• Carefully verify all information on the business license.

Step 8: Follow-up Work

• Update the company seal (if necessary).
• Report the change in registered capital to tax authorities and update tax registration information.
• Update the shareholder register at the Vietnam Securities Depository (VSD).
• If listed, notify the stock exchange.
• Cancel the shares.

Capital Increase/Decrease Procedures for Wholly Foreign-Owned Enterprise (WFOE)

Simulation scenario: DEF Wholly Foreign-Owned Enterprise, with a current registered capital of 20 billion VND, plans to increase its capital to 30 billion VND.

Capital Increase Procedure

Step 1: Internal Decision-making

• Foreign investor makes the capital increase decision
• Prepare capital increase decision document, including: Increase amount: 10 billion VND. Method of increase: Cash contribution. Timetable for increase.
• Draft the capital increase decision document (needs to be translated into Vietnamese and notarized)

Step 2: Modify Investment Project

• Modify the investment project description to reflect the new investment scale
• Prepare application for investment project adjustment

Step 3: Apply for Investment Registration Certificate Adjustment

• Prepare the following documents: Investment project adjustment application form. Foreign investor’s capital increase decision (original and Vietnamese translation).Modified investment project description. Copy of current Investment Registration Certificate. Copy of current business license. Latest financial statements.
• Submit application to the investment registration authority.
• Wait for review (usually takes 10-15 working days).

Step 4: Obtain New Investment Registration Certificate

• Collect the updated Investment Registration Certificate showing the new investment scale.
• Carefully verify this information.

Step 5: Prepare Enterprise Change Application

• Fill out the enterprise change application form
• Prepare the following documents: Foreign investor’s capital increase decision. Amended company charter. Copy of new Investment Registration. Certificate Copy of current business documents. Legal representative’s identity document.

Step 6: Submit Enterprise Change Application

• Submit relevant documents to the Business Registration Office.
• Pay the application fee.
• Wait (usually 3-5 working days).

Step 7: Obtain New Business Documents

• Collect the updated business license showing the new registered capital.
• Carefully verify this information.

Step 8: Follow-up Work

• Complete actual capital increase within the specified period (usually within 90 days).
• Obtain capital verification report issued by the bank.
• Update the company seal (if necessary).
• Report the change in registered capital to tax authorities.
• Update bank account information.
• Report completion of capital increase to the investment registration authority.

Capital Decrease Procedure

Simulation scenario: DEF Wholly Foreign-Owned Enterprise, with a current registered capital of 30 billion VND, plans to decrease its capital to 20 billion VND.

Step 1: Internal Decision-making

• Foreign investor makes the capital decrease decision
• Prepare capital decrease decision document, including: Decrease amount: 10 billion VND. Reason for decrease. Debt handling plan.
• Draft the capital decrease decision document (needs to be translated into Vietnamese and notarized).

Step 2: Notify Creditors

• Draft a capital decrease announcement.
• Publish the announcement on the company website and in a national newspaper.
• Announcement period should be no less than 45 days.
• Record and address creditor objections (if any).

Step 3: Modify Investment Project.

• Modify the investment project description to reflect the new investment scale.
• Prepare investment project adjustment application, explaining the reason for decrease, new detailed investment scale, and its impact on the project.

Step 4: Apply for Investment Registration Certificate Adjustment

• Prepare the following documents: Investment project adjustment application form. Foreign investor’s capital decrease decision (original and Vietnamese translation). Modified investment project description. Copy of current Investment Registration Certificate. Copy of current business registration. Latest financial statements. Proof of creditor notification and handling.
• Submit application to the investment registration authority.
• Wait for review (usually takes 15-20 working days, may be longer than for capital increase).

Step 5: Obtain New Investment Registration Certificate

• Collect the updated Investment Registration Certificate showing the new investment scale.
• Carefully verify the accuracy of all information.

Step 6: Prepare Enterprise Change Application

• Fill out the enterprise change application form
• Prepare the following documents: Foreign investor’s capital decrease decision. Amended company charter. Copy of new Investment Registration Certificate. Copy of current business documents. Legal representative’s identity document. Proof of creditor notification and handling. Latest balance sheet, proving the company’s ability to fulfill debts after capital decrease.

Step 7: Submit Enterprise Change Application

• Submit relevant documents to the Business Registration Office.
• Pay the application fee.
• Wait (usually takes 5-7 working days).

Step 8: Obtain New Business License

• Collect the updated business license showing the new registered capital.
• Carefully verify the accuracy of all information.

Step 9: Follow-up Work

• Update the company seal (if necessary).
• Report the change in registered capital to tax authorities and update tax registration information.
• Update bank account information.
• Report completion of capital decrease to the investment registration authority.
• Execute the capital decrease, remitting excess funds back to foreign investors (must comply with foreign exchange management regulations).
• Adjust company books to reflect the new registered capital.
• Notify main business partners about the change in the company’s registered capital.

Notes: Throughout the entire process, it is advisable to engage professional legal and financial advisors to ensure compliance and smooth completion of the capital decrease. The capital decrease process for a WFOE may be more complex than for domestic enterprises, as it involves foreign investment management. Capital decrease may affect the company’s investment preferences, which needs to be carefully evaluated. When remitting funds abroad, special attention must be paid to Vietnam’s foreign exchange management regulations.

Through the above detailed steps, we have completed the simulation of capital increase and decrease procedures for different types of companies in Vietnam: Limited Liability Company, Joint Stock Company, and Wholly Foreign-Owned Enterprise.
Different types of companies have their specific requirements and procedures, but generally, they all need to go through stages of internal decision-making, document preparation, government approval, and subsequent adjustments. In practice, adjustments may need to be made according to specific situations and the latest regulations.