What is the minimum capital for the establishment of an enterprise? What is legal capital and charter capital?
The 2020 Law on Enterprises has no regulations regarding the minimum contribution of charter capital to establish an enterprise and therefore only provides general regulations on the charter capital of enterprises.
However, there are some industries and trades have specific conditions in terms of capital, which require enterprises to have minimum capital amounts in order to be allowed to operate. This is called the “legal capital” which is usually specified in the laws governing each business line (if any).
“Charter capital” is defined as the total value of assets which the members and owners of a company have contributed or have committed to contribute upon the establishment of a limited liability company or partnership; or the total par value of shares sold or registered to be purchased at the time of the establishment of a joint stock company.
There is no valid definition of the term “legal capital” in the current Law on Enterprises. However, under the 2005 Law on Enterprises, “Legal capital” means the minimum amount of capital that is required by law for an enterprise to be established.
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