Factors affecting an acquisition of companies in Vietnam
Any acquisition
will have its own details and structures. That being said, a foreign investor
intending to do deal in Vietnam should take into account the following factors,
among other things:
Corporate form of the target company
A target company in Vietnam may be:
- a limited liability company (LLC) (công ty trách nhiệm hữu hạn) incorporated under the Enterprise Law. A LLC may be a single-member LLC (One Member LLC), which is owned by a single member, or a two or more members LLC (Multiple Member LLC), which is owned by two or more members; or
- a joint stock company (JSC) (công ty cổ phần) incorporated under the Enterprise Law. A JSC can be a public JSC (which usually has 100 or more shareholders) or a private JSC. A public JSC may also be a “listed company” (công ty niêm yết) if the shares of the relevant company is listed on a stock exchange.
The corporate form of the target company may affect a transaction significantly. For example, a foreign investor may not be able to acquire more than 49% of a public JSC while it can acquire 100% of a LLC doing the same business. The selling shareholders in a public JSC can be subject to substantially lower capital gain tax than the selling shareholders in a private JSC.
Nature of the existing owner(s) of the target company:
A target company in Vietnam may be owned and controlled by:
- local private investors, in which case the target company is considered as a domestic company. Investing in a domestic company may or may not require an Investment Certificate;
- foreign investor, in which case the target company is considered as a foreign invested enterprise. A foreign invested company incorporated on or after 1 July 2006 should operate either as a LLC or JSC under the Enterprise Law. However, a foreign invested company which was incorporated before 1 July 2006 and has not re-registered as a LLC under the Enterprise Law will operate in a legal vacuum and be subject to many uncertainties. Investing in a foreign invested company is usually subject to an Investment Certificate; or
- Vietnamese Government, in which case the target company is considered as a State-owned enterprise. Investing in a State-owned enterprise may be subject to separate rules on equitisation (or privatisation) of State-owned enterprises.
Nature of the business of the target company
Depending on the business of the target company, there may be specific restrictions on foreign investment or other special requirements applicable to the proposed acquisition or the target company.
As discussed in our previous post, we believe the pilot mechanism introduced under Resolution 171 will bring a significant improvement to the legal framework for commercial housing development in Vietnam. With the enactment of implementing Decree 75/2025, this pilot mechanism is now fully set up. In this post, we will highlight key takeaways from Decree 75/2025 and discuss potential implications for housing developers.
On 29 April 2025, the State Bank of Vietnam (SBV) has issued Circular 3 on the opening and using of VND account for conducting indirect investment in Vietnam (Circular 3/2025). From 16 June 2025, Circular 3/2025 will replace Circular 5 dated 12 March 2014 of the SBV (Circular 5/2014) guiding the opening and using of indirect investment capital account (IICA) for conducting indirect investment in Vietnam.
n a landmark reform for 2025, the Government of Vietnam has commenced a significant restructuring of its ministries. This major overhaul, approved by Resolution No 176 of the National Assembly dated 18 February 2025, aims to create a leaner, more efficient, and effective state apparatus to better support the nation's development.
The restructuring involves a series of complex mergers and transfers of functions between ministries. Based on the guiding decrees, the key changes include:
The Vietnamese government recently issued Decree 69/2025 (effective 19 May 2025), which amends Decree 01/2014 regarding foreign investor’s share purchase in Vietnamese credit institutions. Here are the main changes:
1. Scope of application
Decree 69/2025 clarifies that foreign-invested economic organisations (FIEOs) which are required to comply with investment conditions and procedures applicable to foreign investors must now follow the same rules (in Decree 01/2014 as amended by Decree 69/2025) applicable to foreign investors when buying shares in Vietnamese credit institutions.
Under the Investment Law 2020, these FIEOs refer to entities where foreign investors hold a majority of the charter capital (FIEO-F1). Notably, Decree 69/2025 does not explicitly state whether it applies to economic organisations majority-owned by an FIEO-F1, even though such economic organisations are also treated as foreign investors under the Investment Law 2020.
In criminal proceedings in Vietnam, civil claims (e.g., claims for compensation, repair of damaged property) often arise alongside criminal charges against criminals. The Criminal Procedure Code 2015 introduces the position of “civil claimants” (nguyên đơn dân sự) and “civil defendants” (bị đơn dân sự) to facilitate the handling of civil claims in Vietnamese criminal proceedings. However, other than creating these positions, the Criminal Procedure Code 2015 lacks detailed provisions on how these civil matters should be addressed in criminal proceedings. This legal gap, coupled with inconsistent judicial practices, makes the resolution of civil claims within criminal cases particularly complex and problematic. This post will explore the key challenges in resolving civil claims during criminal proceedings.
No clear procedures - Article 30 of the Criminal Procedure Code 2015 provides that civil matters in criminal cases are to be resolved during the adjudication of the criminal case. However, the Criminal Procedure Code 2015 provides no further instructions on the procedure for resolving civil claims within criminal proceedings. It remains unclear what procedural rules apply—whether the criminal court should follow its own process or adopt the procedures set out in the Civil Procedure Code 2015 to settle a civil claim during criminal proceedings. This uncertainty can lead to inconsistent judicial practices and procedural confusion.
Scope of civil claims - Article 64.1 of the Criminal Procedure Code 2015 defines a civil defendant as “an individual, agency, or organization that, as prescribed by law, is responsible for compensating for damages”. It appears from the definition of civil defendant that a civil claim during criminal proceedings only relates to the issue of compensation for damages. It is not clear whether other issues such as ownership of assets or return of illegal property could be covered in a civil claim during criminal proceedings. In addition, the court may also designate the person making or subjecting to a claim on civil issues which are not claim for damages to another position (e.g., person with related rights and obligations) during the proceedings.