Would transactions between parties outside Vietnam (offshore transactions) be caught by merger control legislation?

Under the Competition Law 2018, any transaction “causing the effect or being capable of causing the effect of significantly restricting competition in the market of Vietnam” is prohibited. As such, an offshore transaction will be caught by merger control requirement if it has actual or potential anti-competitive impact on a relevant market of Vietnam. In particular, an offshore transaction may be subject to notification requirement under Vietnamese laws where a party to the transaction or its affiliates have assets, sale revenue or purchase costs in Vietnam and the transaction triggers any of the applicable notifying thresholds discussed here (except for size of transaction test). ‎

There is no clear exception under the notification thresholds provided in Decree 35/2020 for a foreign-to-foreign transaction which has no impact on Vietnam market. In other words, unlike US competition regulations, under Decree 35/2020, a foreign-to-foreign transaction with insufficient nexus  with Vietnam commerce (e.g., an offshore transaction where (1) both buyer and seller are non-Vietnamese company, (2) either party  has assets in Vietnam, but (3) the target has no assets or revenue in Vietnam) may still need to be reported to the National Competition Committee.

This post is written by Le Minh Thuy and edited by Nguyen Quang Vu.