The Investment Law 2014 introduces many substantial changes to the investment procedures involving foreign investors or foreign invested enterprises. The changes to investment procedures when a foreign investor acquires shares in an existing private Vietnamese company (Private Local Co) are among the most important changes. The Private Local Co here is not banks, insurance companies or securities companies. In particular,

Foreign Investors: Definition of “foreign investors” (nhà đầu tư nước ngoài) now only includes individuals who have foreign nationality and foreign organisations incorporated in a foreign country. Under current investment regulations, foreign investors may include foreign-invested enterprises which is majority or wholly owned by foreign investors.
Acquisition Registration: A foreign investor must register with the local Department of Planning and Investment (Local DPI) when the foreign investor acquires shares (1) in a Private Local Co which operate in the sectors having investment conditions to foreign investors or (2) in a Private Local Co which results in the foreign investor together other foreign investors or foreign controlled companies holding more than 51% of the charter capital of the Private Local Co. Under current investment regulations, the investment procedures for a foreign investor buying shares in a Private Local Co may be interpreted and implemented in many different way. If a registration for acquisition (đăng ký góp vốn, mua cổ phần, phần vốn góp) (Acquisition Registration) does not apply to a foreign investor then the foreign investor only needs to follow the procedures under the Enterprise Law 2014.
Enterprise Law procedures: After obtaining an Acquisition Registration, the Enterprise Law 2014 requires an Approved Notification or an amendment to the Business Registration Certificate in case a foreign investor becomes a shareholder or a member in a Private Local Co. In addition, if the foreign investor buying new shares issued by a Private Local Co being a joint stock company then the foreign investor also needs to conduct procedures for private placement of shares under Enterprise Law 2014.

The procedures for an acquisition of a Private Local Co under Investment Law 2014 remain unclear about:

Whether an in-principle investment approval is required for a foreign investor acquiring shares in a Private Local Co if the Private Local Co is implementing an investment project which needs an in-principle investment approval; and

Whether an amendment to the Acquisition Registration is required if after the initial acquisition, there are changes to the details declared in the Acquisition Registration (e.g. changes in details of the foreign investor or changes in the amount of investment or shareholding).

Update 10 December 2014

It appears that a foreign investor will not need to obtain an Investment Certificate for investment by way of M&A transactions.

Vietnam Business Law