No “squeeze out” in Vietnamese tender offers
Vietnamese tender offer rules do not have any “squeeze out” mechanics which allows a person conducting a tender offer to acquire shares from the remaining shareholders without the consent of such shareholders once such person reaches a certain shareholding threshold. Article 51 of Decree 58 of the Government dated 20 July 2012 implementing the Securities Law only requires a person conducting a tender offer to “continue to purchase the remaining shares” within 30 days after such person holds 80% or more the shares in the relevant target company. However, Decree 58 does not impose any obligation to sell on the remaining shareholders.
Although there are no “squeeze out” rules, a person holds 80% or more the shares in a joint stock company may indirectly “force” other remaining shareholders to redeem their shares if such person procures the shareholders meeting of the relevant company to pass a resolution to re-organise the company (e.g merger, split or conversion) or to change the shareholder rights recorded in the Charter of the company. Under the Enterprise Law, a shareholder voting against such a decision may request the company to redeem their shares.
On 3 September 2025, the Ministry of Finance (MOF) released the Official Letter no. 13629 addressing questions related to difficulties and obstacles arising from legal regulations in the finance and investment sector. This correspondence has several notable issues that are summarized below. While some of the MOF’s guidance offers welcome flexibility and operational reassurance, others fall short of providing clear or comprehensive clarification, leaving important gaps unresolved and inconsistencies with other legislation unaddressed.
Delegation by the General Meeting of Shareholders endorsed in principle (Query no. 29)
Query/Issue raised:
Current regulations regarding delegation/authorisation (both could be translated to/from "uỷ quyền" in Vietnamese) by the General Meeting of Shareholders (GMS) to the Board are unclear and conflicting. To be specific:
A recurring issue in Vietnam corporate governance is whether a former member of the Board of Directors can be appointed as an “independent” Board member in the subsequent term, provided that all other statutory criteria are satisfied. This typically arises where companies want to retain a former board member while still complying with independence requirements under Article 155.2 of the Enterprises Law 2020 as amended in 2025 (Enterprises Law 2020).
Under Article 155.2(dd) of Enterprises Law 2020, an independent Board member must “not hold the position of member of the Board of the company within the last 05 years or longer unless he/she was designated in 02 consecutive terms.”
Vietnamese law currently lacks a formal definition of “latent defect” (khiếm khuyết ẩn) and a clear mechanism for allocating liability once such defects arise. This regulatory vacuum often leads to prolonged disputes between the Employer and the Contractor, particularly when the construction contracts do not include explicit risk allocation.
For the purpose of our discussion below, a “latent defect” is defined as a fault or flaw in construction works/item that is not discoverable through a reasonably thorough inspection at the time of handover.
When companies think about data protection, they usually focus on “visible” data like names, email addresses, or bank details. However, there is a hidden layer called metadata - essentially “data about data” - that often gets ignored.
Under Vietnam’s new personal data protection rules, overlooking metadata is a major risk. If metadata can be used to identify a specific person, it falls under the same strict rules as regular personal data.
What is Metadata? The “Digital Footprint”
Metadata is information that describes the context of a file or a message rather than the content itself. Even if you remove a person’s name from a file, the metadata can still point directly to them.
Vietnam is currently at a pivotal stage of infrastructure modernization. To meet the immense demand for capital, the State has moved to revitalize private sector participation, most notably through the “Build – Transfer” (BT) model.
In a typical BT arrangement, a private investor finances and constructs an infrastructure project, then transfers it to the State upon completion. In return, the State “pays” the investor with land funds, allowing them to develop a “reciprocal project” (dự án đối ứng) to recover their capital and generate profit. While this mechanism is essential to stimulate private sector participation, the recent new legal framework for BT projects may raise significant concern regarding the land access privileges granted to BT investors compared to their counterparts in the general real estate market. In particular,
The recently issued Case Law No. 81/2024/AL (CL 81) introduces a precedent that allows creditors to bypass the standard statute of limitations by re-characterizing an unpaid contractual debt as a property reclamation claim upon the mutual termination of the contract and an agreement on the payable amount. Below are a few of our observations regarding CL 81.
Summary of the Case
The dispute originated from a service contract between Company M (the Service Provider) and Company A (the Client). After the Service Provider performed its services, the parties mutually agreed to terminate the contract. Subsequently, the Client explicitly confirmed in writing the specific amount of the service fee it owed to the Service Provider and the late payment interest but ultimately failed to make the payment. When the Service Provider filed a lawsuit to recover the unpaid amount, the Client requested the court to dismiss the case, arguing that the 3-year statute of limitations for a contractual dispute had already expired.
For investors in Vietnam, "contributing capital" to a company can mean two very different things: becoming a legal owner (member/shareholder of a company) or simply being a business partner. A recent case law no. 78/2025/AL clarifies this distinction and indicates that several pieces of evidence may be considered to prove company member/shareholder status.
Case Summary
In this dispute, Mr. H, the plaintiff, provided significant funds to D Limited Liability Company, which was managed by his relatives. Although Mr. H received the profit distribution for over a decade and signed minutes acknowledging his contribution, Mr. H was never officially recorded as a member of the company in the enterprise registration certificates (ERC) or the company’s charter.
When partnering with government agencies (G2B), the risks often come from policy changes and the adoption of new legislation, causing obstacles, delays, and payment backlogs in PPP contracts (especially BT contracts). Following the establishment of Steering Committee 751 (Ban Chỉ Đạo 751) to resolve investment projects with pending legal issues, the Government has recently prepared a Resolution Draft (the Draft) to address approximately 160 transitional BT projects still facing legal obstacles (such projects, “Pending BT Project”).
Focusing specifically on Pending BT Projects where land-use rights serve as the State’s payment mechanism, the following analysis highlights critical issues arising from the proposed changes introduced by this Draft:
On 31 December 2025, the Government issued Decree 356/2025 guiding the implementation of the PDPL 2025, which took effect on 1 January 2026. Decree 356/2025 provides critical detailed guidance and, notably, resolves several ambiguities under the PDPL 2025 framework. This post highlights the key takeaways from this new regulation.
1. Expansion of "sensitive personal data": ID Cards and login credentials
As compared to the Draft PDPL Decree, Decree 356/2025 expands the scope of sensitive personal data to explicitly include:
On 11 December 2025, the National Assembly adopted new investment law (Investment Law 2025). On this blog, we discuss some key changes in the new Investment Law 2025.
Clarification of business investment conditions
The Investment Law 2025 refines the definition of business investment conditions (Điều kiện đầu tư kinh doanh) by introducing an explicit exclusion: these conditions no longer encompass technical standards and regulations issued by competent authorities concerning product or service quality. This addition narrows the scope of what constitutes a "conditional business line", distinguishing administrative market-entry conditions from mere technical product standards.
In a significant move to streamline the execution of the Land Law 2024, the National Assembly of Vietnam recently passed Resolution 254/2025 on specific policies and mechanism to resolve obstacles in implementation of the Land Law 2024. Effective from 1 January 2026, Resolution 254/2025 is intended to apply alongside the Land Law 2024 and prevails in case of conflict. In essence, Resolution 254/2025 could be considered as an amendment to the Land Law 2024.
In this post, we will summarize the key changes introduced under Resolution 254/2025.
1. Expanded Scope for Land Recovery
Resolution 254/2025 introduces three additional scenarios under which the State may recover land to promote socio-economic development. Specifically, it now includes:
On 18 December 2025, the Vietnamese government issued Decree 323/2025 on the establishment of Vietnam International Financial Center (VIFC). Decree 323/2025 takes effect immediately and provides guidance for Article 8 and 9 of Resolution 222/2025 of the National Assembly on VIFC. In this post, we discuss some interesting points of Decree 323/2025
1. Single or multiple units
The National Assembly intends that VIFC is one single unit. To confirm this intention, Decree 323/2025 provides that VIFC is a unified legal unit (thực thể pháp lý thống nhất in Vietnamese). However, Vietnamese law does not have definition of legal unit (thực thể pháp lý). In addition, this provision of Decree 323/2025 also seems to contradict with Resolution 222/2025 which defines VIFC as an area with defined geographical boundaries.
However, by locating that single unit into two separate location, putting it under management of multiples authorties, and giving each location a different set of priorities, it is doubtful on how the operation of VIFC can be unified. This is evidenced by:
The VIFC is oddly named as “Viet Nam International Financial Center in Ho Chi Minh City (VIFC-HCMC) and Viet Nam International Financial Center in Da Nang City (VIFC-DN)” which compries two individual names within one single entity name.
The Operating Authority and Supervisory Authority of VIFC have legal person status, which implied that these authorities’ legal responsibility is independent with VIFC’s legal responsibility.
The Law on Artificial Intelligence (AI Law), which was passed by the National Assembly on 10 December 2025, is arguably among the most anticipated pieces of legislation of Vietnam in 2025.
Unfortunately, similar to the Law on Digital Technology Industry, Vietnam’s AI Law still feels like a half-baked legislation, which makes it hard to clearly identifying the key players in the artificial intelligence (AI) value chain. This article would examine several key terminologies under the AI Law.
To retain talent after investing in expensive training, employers often require employees to sign a training contract covering, among other things, work commitment and reimbursement of training costs. In that context, the critical legal question arises if there is a conflict between the provisions of the training contract and the employment contract which of the two will prevail. For example, if an employee exercises their right to terminate the employment contract under the Labor Code, can they disregard the work commitment and avoid reimbursement penalties stipulated in the training contract?
Under Data Law 2024 and the Law on Personal Data Protection 2025 (PDPL 2025), several data-related services, including “personal data processing service” (dịch vụ xử lý dữ liệu cá nhân), personal data protection service (DPO Service), data intermediary service, data trading floor and data synthesis and analysis service (collectively, New Data-Related Services) are now designated as conditional business sectors. The New Data-Related Services (which could include dozen of sub-services) are subject to specific licenses and operational conditions. In the past, data processing or exploitation services in Vietnam were not classified as conditional business lines, allowing providers to operate with limited regulatory prerequisites.
In short, the Government has arguably created (or at least intended to create) more than just a regulatory system; it has established a complex compliance economy. This new framework tethers businesses to a costly ecosystem of mandatory intermediaries, from licensing consultants to training centers and credit rating agencies. To remain operational, enterprises must now absorb the dual burden of initial licensing fees and the recurring costs of maintaining qualified staff and ratings. As these obligations mount, the pressing question remains: will this expensive bureaucracy actually reduce the daily scam calls and messages suffered by Vietnamese citizens, or simply increase the cost of doing business?
We are still waiting for the official Decree guiding the Corporate Income Tax Law 2025 (CIT Law 2025). However, the New Draft Decree of the Government dated 5 September 2025 (New Draft Decree) and the Official Letter 4685 of the Tax Department dated 29 October 2025 (Official Letter 4685) provide critical updates.
For foreign investors, the rules for selling capital in Vietnam are shifting. The new rules broaden the tax scope while offering potential - though ambiguous - exemptions. Below is our analysis of the key changes.
1. Clarifying the Scope: Direct vs. Indirect Transfers
In our previous post, we highlighted the uncertainty regarding whether “indirect transfers” (selling the offshore parent) and “direct transfers” (selling the Vietnam entity) would be taxed differently. The previous Draft Decree was ambiguous, applying the 2% revenue tax rate only to transactions where the owner “does not directly manage the business.” This implied that direct transfers might face a different tax rate.
The New Draft Decree resolves this uncertainty with two key changes:
· Unified Tax Treatment: Article 3.3 of the New Draft Decree explicitly states that taxable income for foreign companies includes income from capital transfers, whether direct or indirect. This confirms a unified approach: whether a foreign investor transfers capital in a domestic entity or in an offshore holding company, the tax treatment is identical.
· New exemptions replacing the “management” test: Article 11.2(i) of the New Draft Decree clarifies that the 2% tax on revenue applies to all capital transfers, with three specific exceptions: (i) restructuring (tái cơ cấu), (ii) internal financial arrangements of the seller (dàn xếp tài chính nội bộ của bên chuyển nhượng), or (iii) consolidation of the seller’s parent company (hợp nhất của công ty mẹ của bên chuyển nhượng).
While this appears helpful for internal group restructuring, investors should note that terms like “restructuring” and “internal financial arrangements” are not clearly defined in Vietnamese law. Without specific definitions, the determination of these exemptions will remain subject to the tax officers’ discretion.
In recent years, digital assets have been at the forefront of regulatory discussions worldwide. Vietnam is also making an effort to create a legal framework for its 100-billion-dollar market with the issuance of the 2025 Law on Digital Technology Industry – which is the first to introduce the legal definition of “digital assets”, and the Resolution 05/2025/NQ-CP greenlighting pilot program for the cryptographic digital assets market (Resolution 05/2025).
With the effective date of the Law on Digital Technology Industry fast approaching, we have a few comments on the current legal concept of digital assets in Vietnam, which we find to be rudimentary and raises more questions than answers.
For a long time, Vietnam’s housing law has restricted housing developers (generally, “master developer”) from distributing houses or residential land use rights within a project as in-kind profit to capital-contributing partners (generally, “secondary investors”). This restriction aims to prevent the master developers from using capital contribution arrangements to sell off-plan houses to customers before those properties are legally qualified for sale. In particular, Article 116.1(e) of the Housing Law 2023 currently provides that:
Under the Enterprise Law 2020, a minority ordinary shareholder voting against certain important decisions of the General Meeting of Shareholders may request the relevant joint stock company to redeem the shares held by such dissenting shareholder. However, the law is not clear about the scope of this redemption. In particular,
It is not clear whether the redemption right covers both ordinary shares and preference shares held by the dissenting shareholder. The law provides that in the request for redemption, the shareholder will specify the number of shares of each class. This suggests that the redemption right covers preference shares in addition to ordinary shares.
A conflict arises if the redemption right is found to cover preference shares, but the terms of those shares (as defined in the charter) do not permit redemption. In this situation, it is not clear whether the company can lawfully refuse the request. Since a shareholder needs to comply with the charter which contains the terms of the preference shares, the dissenting shareholder cannot require the company to redeem the relevant preference shares. On the other hand, since the provisions on the content of a redemption request do not clearly exclude shares which cannot be redeemed, the dissenting shareholder can argue that it has the right to specify all the shares (including non-redeemable preference shares) in the redemption request.
In June 2025, the National Assembly passed a new Law on Personal Data Protection (PDPL 2025), set to take effect on 1 January 2026. This new law represents a significant evolution from the foundational framework established by Decree 13/2023, introducing a far more comprehensive and stringent regime for personal data protection. This post will analyze some critical highlights of the new PDPL 2025, with some important implications for businesses. To offer a comprehensive perspective, we also include a summary generated by Google's Gemini AI for comparison and reference (see here).
A narrower extraterritorial scope of application
The PDPL 2025 narrows its extraterritorial application compared to previous regulations. Instead of a broad rule for "foreigners' data, the PDPL 2025 explicitly applies to foreign entities that are directly involved in or related to the processing of personal data of Vietnamese citizens and people of Vietnamese origin residing in Vietnam. This new provision successfully addressed the confusion and uncertainty that the earlier draft of PDPL 2025 had introduced (see our discussions here).
However, this scope of application still has the following issues:
· It has not addressed the existing ambiguity under Decree 13/2023 of whether the applicable subjects under the PDPL 2025 apply to the processing entities or data subjects (see our discussions here)
· The PDPL 2025 is also unclear on its application to foreign organizations processing the data of non-Vietnamese individuals (e.g., tourists, expatriates) within Vietnam. While Article 1.2 of the PDPL 2025 does not explicitly cover this scenario, Article 5.1 states the law applies to all "personal data protection activities on the territory of Vietnam", which may arguably cover this case.