Acquisition Registration in Vietnam – Scope of Application

Under the Investment Law 2014 and Decree 118/2015, an Acquisition Registration will be required:

if a foreign investor or a deemed foreign investor acquires any percentage of ownership interest in a target company, which involves in business subject to a FIE Condition; or
if a foreign investor or a deemed foreign investor acquires ownership interest in a target company, which does not involve in any business subject to a FIE Condition but the proposed acquisition results in (1) the aggregate ownership interest held by foreign investors or Deemed Foreign Investors in the target company being equal to or exceeding 51%; or (2) the aggregate ownership interest held by foreign investors or deemed foreign investors in the target company, which already exceeds 51%, increasing.

List of investment conditions applicable to foreign investors in Vietnam

The Ministry of Planning and Investment (MPI) published a consolidated list of investment conditions applicable to foreign investors in Vietnam (FDI Condition List) as of 27 December 2015 in its website. For easy reference, is a consolidated list based on the information published on MPI’s website can be downloaded from here. The FDI Condition List represents a major effort of the MPI to help foreign investors to navigate a mirage of domestic laws and investment treaties which may apply to a foreign investor in Vietnam. That said, when relying on the FDI Condition List, one should take note of the following:

Trading Licence for investment by way of acquisition in Vietnamese companies

In December 2015, the Ministry of Industry and Trade (MOIT) confirmed in a Letter No.12933 that a Vietnamese company in which foreign investors invest will need to comply with the regulations under Decree 23/2007 regarding import and distribution activities of foreign invested enterprises regardless of the level of foreign ownership in the Vietnamese company. This means that most local companies which register for import and distribution businesses and have foreign investors will need to obtain a Trading Licence (Giấy phép kinh doanh) under Decree 23/2007 even if there is no investment certificate for the investment by the foreign investor. The MOIT requires compliance with Decree 23/2007 even when it is contemplating further changes to Decree 23/2007. The MOIT’s confirmation has certain important implication:

Vietnam Business Law