Can a foreign bank acquire 100% shares in a Vietnamese joint stock bank?
There has been an argument that under the new Decree 1/2014 a foreign bank may acquire 100% of the shares in a Vietnamese joint stock bank (Local Bank) if (1) the Local Bank is, among other things, a “weak credit institution”, and (2) the Prime Minister approves to increase the foreign ownership limit in the relevant Local Bank to 100%. However, in order for a foreign bank to acquire 100% of the shares in a Local Bank, various legal issues still need to be clarified. In particular,
- It is not clear if Decree 1/2014 is applicable to the scenario where a foreign bank acquires shares in Local Bank and becomes a single-member LLC bank owned by the foreign bank. Decree 1/2014 allows the Prime Minister to increase the foreign ownership limit in a Local Bank. However, Decree 1/2014 appears to be drafted on the assumption that the Local Bank will remain to be a joint stock bank even after the acquisition by a foreign bank. For example, all of the provisions in Decree 1/2014 regarding rights and obligations of a foreign investor after acquiring a Local Bank refer to “share” and “shareholders”.
- A Local Bank is required to have at least 100 shareholders under the Law on Credit Institutions. If a foreign investor acquires 100% of the shares in a Local Bank, the Local Bank will become a 100% foreign-invested bank existing in the form of a single member limited liability company (LLC). The Law on Credit Institutions and Decree 59/2009 currently do not have any specific procedures for converting a local joint stock bank into a single-member LLC bank owned by a foreign bank. Instead, the Law on Credit Institutions and Decree 59/2009 only generally provide that conversion (chuyển đổi) of legal corporate form of a joint stock bank requires State Bank’s approval. As such presumably, the conversion of a local joint stock bank into a single-member LLC bank will need to follow the procedures under the Enterprise Law and Decree 102/2010. This means that, among other things, the conversion would require (1) super majority approval by the General Meeting of Shareholder of the Local Bank and (2) the share purchase price by the foreign bank to be determined according to market price or price determined by certain valuation methods.
- After a 100% acquisition, the Local Bank will become a 100% foreign-invested bank. Therefore, presumably, the foreign investor will need to satisfy the conditions of setting up a 100% foreign-invested bank in Vietnam in addition to the conditions of acquiring shares in Local Bank in Vietnam.
- A Local Bank is also a public joint stock company in Vietnam. Therefore, acquiring 100% shares in a Local Bank will be subject to the tender offer rules under the securities law unless an exemption is granted by the General Meeting of Shareholders.
- A conversion of a Local Bank into a single-member LLC bank owned by a foreign bank would require (1) consent by all of the shareholders of the Local Bank for selling their shares to the foreign bank and (2) super majority approval by the Local Bank’s shareholders. If a shareholder in the Local Bank objects to the 100% acquisition, it may be difficult to complete the acquisition voluntarily. Under the Law on Credit Institutions, only when a Local Bank is put under “special control” (kiểm soát đặc biệt) by the State Bank, the State Bank may compel the Local Bank to be acquired by another bank or by the State Bank itself. Even in case of special control, the legal ground and procedures for a compulsory transfer of shares is still unclear and untested.
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.