Legal Considerations for Foreigners Buying Vietnamese Companies

Buying into an existing Vietnamese company is often faster than building one from scratch: licences, staff, premises and customer contracts come with it. So do its liabilities — and a foreign buyer must clear checks that a Vietnamese buyer does not. This article sets out the rules that apply from 1 March 2026 and the points we prioritise when acting for foreign purchasers.

The legal framework — and a common mistake

The core statute is the Law on Investment No. 143/2025/QH15, in force since 1 March 2026 (its list of conditional business lines applies from 1 July 2026), which replaced the Law on Investment 2020. Alongside it sit the Law on Enterprises 2020 as amended in 2025, the Competition Law 2018, sector-specific laws and the State Bank's foreign-exchange regulations. Term sheets drafted abroad still refer to a "Foreign Investment Law"; no such law has been in force since 2006, and a contract built on it signals that the Vietnamese side of the deal has not been checked.

Market access comes first

Under Article 21(2) of the Law on Investment, a foreign investor contributing capital to, or buying shares or capital contributions in, a Vietnamese company must satisfy three sets of conditions: the market-access conditions for foreign investors, national defence and security requirements, and the land-law rules on acquiring land use rights on islands and in border and coastal communes and wards. Market-access conditions come from Vietnam's WTO and free-trade commitments and from sector laws, and in some services they cap foreign ownership or require a particular structure. If the target's actual business — not only the codes on its registration certificate — falls in such a sector, the cap applies to you.

When you must register before closing

Article 21(3) requires the foreign investor to register the capital contribution or share purchase before the change of members or shareholders where:

• the transaction increases foreign ownership in a company operating in a sector with market-access conditions for foreign investors;
• the transaction takes foreign ownership from 50% or less to more than 50%, or increases it further where foreign investors already hold more than 50%;
• the target holds a land use right certificate on an island, in a border or coastal commune or ward, or in another area affecting national defence and security.

In these cases the investment registration authority issues a written approval, and only then can the company register the new members or shareholders. Outside these cases, the transfer is completed through the ordinary enterprise registration change or an update of the share register. Note that acquiring a company does not by itself give you an investment registration certificate; if the target already holds one for a project, its terms and deadlines become your problem.

Merger control

An acquisition of control may be an "economic concentration" under the Competition Law 2018 that must be notified to the National Competition Commission before closing. From 1 July 2026, Government Resolution No. 66.18/2026/NQ-CP doubled three of the four notification thresholds in Decree 35/2020/ND-CP: total assets in Vietnam or turnover of VND 6,000 billion, or a transaction value of VND 2,000 billion; the 20% combined market share threshold remains. Different thresholds apply to credit institutions, insurers and securities companies. Offshore deals involving a Vietnamese subsidiary can be caught too. Closing a notifiable deal without clearance exposes the parties to fines, so make clearance a condition precedent.

Money flows and tax

Payments for the purchase and later dividends and exit proceeds must pass through the accounts required by State Bank foreign-exchange regulations — in most foreign-controlled structures, the direct investment capital account. Payments routed outside the proper channel are a common reason why profits cannot later be repatriated cleanly. Transactions between residents in Vietnam are generally priced and paid in Vietnamese dong.

The seller's capital-gains tax is another trap. Where an offshore seller transfers capital in a Vietnamese company, the Vietnamese company is often required to declare and pay the tax on the seller's behalf. Buyers should provide for this in the price mechanism, with a holdback or escrow if necessary.

Due diligence: where the problems usually are

• Charter capital — whether it was actually contributed within the statutory period, and whether the share register matches the registration certificate.
• Licences and sub-licences — whether they are in the company's name, still valid and transferable on a change of control.
• Land and premises — the land use right, lease terms and whether land rent has been paid.
• Tax and social insurance — open audit periods, transfer pricing, unpaid social insurance contributions.
• Contracts — change-of-control and exclusivity clauses with key customers, suppliers and lenders.
• Beneficial ownership — the 2025 amendments to the Law on Enterprises require information on beneficial owners; check that it has been filed and is accurate.
• Disputes — pending claims, administrative penalties and enforcement proceedings.

Deal documents

The share or capital transfer itself must comply with Vietnamese law, but the parties may choose arbitration — in Vietnam or abroad — for disputes under the purchase agreement. A foreign arbitral award is enforced in Vietnam through recognition proceedings, which since 1 July 2025 are heard by the Regional People's Court with territorial jurisdiction — where the party against whom enforcement is sought resides, has its seat or holds assets. Build the regulatory approvals and merger clearance into the conditions precedent, and tie warranties to the due diligence findings.

Corporate documents of the foreign buyer — certificate of incorporation, good-standing certificate — must be legalised for use in Vietnam. From 11 September 2026, public documents from states party to the Apostille Convention can be used with an Apostille instead of consular legalisation, except those from Germany, Austria and the Czech Republic; board resolutions and other private documents need to be notarised first. A notarised Vietnamese translation is required in every case.

Quick Q&A

Does a foreign investor always need approval to buy shares in a Vietnamese company?

No. Under Article 21(3) of the Law on Investment 2025, prior registration is required only where the target is in a sector with market-access conditions for foreign investors, where foreign ownership goes above 50% (or rises further above 50%), or where the target holds land in island, border, coastal or defence-sensitive areas. Otherwise the change is made through ordinary enterprise registration.

Is there a Foreign Investment Law in Vietnam?

No. The former Law on Foreign Investment has not been in force since 2006. Foreign investment is governed by the Law on Investment No. 143/2025/QH15, effective 1 March 2026, together with the Law on Enterprises and sector laws.

When must an acquisition be notified to the competition authority?

When it is an economic concentration meeting the thresholds under the Competition Law 2018 and Decree 35/2020, three of which were doubled from 1 July 2026 (for example total assets or turnover in Vietnam of VND 6,000 billion, or a transaction value of VND 2,000 billion).

Who pays tax when an offshore seller sells a Vietnamese company?

The seller bears the tax, but the Vietnamese company is often required to declare and pay it on the seller's behalf, so buyers usually provide for it in the price mechanism.