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.
The State Bank of Vietnam (SBV) officially issued Circular 38/2026/TT-NHNN dated 31 July 2026 on foreign exchange management for foreign investment activities in Vietnam (Circular 38/2026). Effective from 18 August 2026, Circular 38/2026 replaces Circular 06/2019/TT-NHNN (Circular 06/2019) as amended by Circular 03/2025/TT-NHNN (Circular 03/2025), which has governed the direct investment capital account (DICA) regime since 2019. Circular 38/2026 also terminates Articles 11.3 and 11.4 of Circular 03/2025 on opening and use of VND-denominated accounts for conducting foreign indirect investment in Vietnam and amends Circular 16/2014/TT-NHNN on the use of foreign currency and Vietnamese dong accounts of residents and non-residents.
A typical share sale agreement (SPA) takes effect on signing. Closing, when the buyer and the seller exchange money and title to the shares, usually comes later, once conditions have been met. One might expect tax on the sale to be imposed when the shares are sold, that is, at closing. But where a foreign enterprise with no permanent establishment (Foreign Seller) in Vietnam sells shares in an unlisted Vietnamese company to a resident buyer, Article 5.2(a) of Circular 20/2026 provides that revenue is taxed when the initial capital-transfer contract takes effect. On the face of that Article, the SPA can be that contract, and signing can be when it takes effect. The fact that closing has not yet occurred might not, by itself, defer the tax. Until Circular 20/2026, that was not so.
Similar to the Enterprise Law 2005 and the Enterprise Law 2014, the Enterprise Law 2020 is silent on whether founding shareholders may hold voting preference shares newly issued after the issuance date of the enterprise registration certificate (ERC), and only provides at Article 116.1 that the voting preference of founding shareholders is effective for three years from that date. This blog will examine different views on this issue.
On the one hand, one may support the view that founding shareholders are entitled to hold voting preference shares issued after ERC issuance date because:
Based on Resolution No. 206/2025/QH15 of the National Assembly on special mechanisms to address difficulties and obstacles arising from legal regulations, the Government has issued several Resolutions on administrative procedure reduction (such as Resolution 66.16/2026/NQ-CP, Resolution 66.18/2026/NQ-CP, etc.). Most of these provisions remain effective until 28 February 2027. If new provisions covering the same subject matter are promulgated to replace them during this period, the relevant provisions of these Resolutions will automatically cease to be effective.
On 16 March 2026, the Ministry of Public Security (MPS) issued the draft decree on administrative sanctions in the fields of cybersecurity and personal data protection (the Draft Decree) for public consultation. It is the first step to put concrete penalties behind the PDPL 2025, which took effect on 1 January 2026 but left the enforcement details to the Government. The Draft covers a wide range of sectors, such as cybersecurity, personal data, AI, telecommunications, and digital signatures. This post focuses on the personal data provisions (Articles 57 to 69 of the Draft Decree), which raise potential concerns for businesses.