The Competition Law 2018 does not exempt internal restructuring within the same group of companies from merger filing requirements. That said, arguably, internal restructuring between companies which are under the control of the same ultimate parent company is not subject to merger filing in Vietnam. This is because:

• Under the competition law, the market share of a company is calculated by reference to the market share of the group of companies that such a company belongs to (the Group). Therefore, an internal restructuring does not have any impact on the market share of the Group and accordingly any anti-competitive impact on the market. Relying on Article 1 of the Competition Law 2018 which provides for the scope of application of the Competition Law 2018, one could argue that an internal restructuring transaction is not governed by the Competition Law 2018;

The merger filing thresholds under the new Decree 35/2020 are drafted broadly and have no exception (see more here). Accordingly, many M&A transactions, which have no anti-competitive impact in Vietnam are still subject to filing requirements. A filing process could take substantial time and effort since at law and in practice, the competition authority (NCC) has very broad discretion in demanding additional information or documents about the parties. Below are some potential structures for overcoming the merger filing threshold in Vietnam. The risks associated with these structures is that Vietnamese authorities may take the view that the parties have undertaken a transaction to conceal another transaction and therefore the first transaction is not valid. Failure to notify the NCC may be subject to a penalty from 1% to 5% of the total revenue in Vietnam of the parties.

Unincorporated joint venture

For a joint venture transaction, instead of incorporating a new joint venture company, the parties may consider entering into an unincorporated joint venture where no new entity is established (e.g., a Production Sharing Contract). An unincorporated joint venture does not fall into the types of economic concentration that is subject to merger filing in Vietnam. This is because the Competition Law 2018 only expressly applies to incorporated joint ventures but not unincorporated joint ventures.