FDI M&A transactions in Vietnam follow three distinct structures — share acquisition, capital contribution, and asset acquisition — each with different regulatory requirements, tax consequences, and timelines. Share deals are the most common for FDI: the buyer acquires equity in the Vietnamese entity, inheriting all assets, contracts, licenses, and liabilities. The target continues operations without disruption.
Foreign ownership limits apply to conditional sectors — crossing the 51% or 49% threshold in restricted industries requires additional government review. The DPI registration process takes 15–35 working days, and missing the regulatory requirements can void the transaction. For the complete Vietnam market entry roadmap, M&A is one of three pathways alongside greenfield incorporation and joint ventures.
Key takeaways
- Three M&A structures: share acquisition (most common), capital contribution, asset acquisition.
- Share deals: buyer inherits all liabilities. Asset deals: buyer acquires clean assets. Structure determines risk.
- DPI registration required when foreign ownership percentage changes or conditional sectors are involved.
- Capital gains tax (Decree 320/2025): foreign corporate sellers pay 2% on gross proceeds; Vietnamese corporates pay 20% on net gains.
- Tax due diligence is non-negotiable for share deals — contingent liabilities transfer on closing.
M&A Structures Compared
| Factor | Share Acquisition | Capital Contribution | Asset Acquisition |
|---|---|---|---|
| What changes | Ownership of equity | New member/shareholder added | Ownership of specific assets |
| IRC treatment | Amendment | Amendment | No change to target |
| Target entity continues | ✅ Yes | ✅ Yes | Target continues (minus assets) |
| Liabilities transfer | ✅ All historical | ✅ All historical | ❌ Seller retains |
| Contracts transfer | ✅ Automatic | ✅ Automatic | Requires assignment |
| Employee transfer | ✅ Automatic | ✅ Automatic | Article 29 novation |
| Tax implications (buyer) | Inherits tax positions | Inherits tax positions | No inheritance |
| Tax implications (seller) | 2% gross (foreign corp) / 20% net (VN corp) | N/A (dilution, not sale) | CIT on asset gain |
| Timeline | 15-35 days (DPI) | 15-35 days (DPI) | 30-60 days (contract-based) |
Share Acquisition
The buyer purchases existing shares/capital contributions from the current owner. The target company’s IRC, licenses, contracts, and employment relationships continue uninterrupted.
When to use: acquiring an operating company with existing revenue, licenses, and workforce. Most FDI M&A transactions in Vietnam follow this structure — it preserves the target’s established relationships, tax history, and operational permissions.
Risk: the buyer inherits all historical liabilities, including undiscovered tax obligations, pending legal disputes, and unresolved compliance issues.
Capital Contribution
A new investor contributes additional capital to the target company, becoming a member/shareholder. Existing ownership is diluted proportionally. No direct payment to existing shareholders — the capital goes into the company.
When to use: strategic investment without full acquisition. The new investor gains board representation and operational influence proportional to their contribution.
Asset Acquisition
The buyer purchases specific assets (machinery, real estate, IP, contracts) from the target. The target company continues to exist — minus the transferred assets.
When to use: acquiring specific production capacity, real estate, or IP without inheriting the entity’s history. More complex due to individual asset transfer requirements, but cleaner from a liability perspective.
Regulatory Process: DPI Registration
When DPI Registration Is Required
DPI registration is mandatory when:
- A foreign investor acquires shares/capital in a Vietnamese company for the first time (creating FDI status)
- An existing foreign investor’s ownership percentage changes
- The transaction involves a conditional business line under special foreign ownership restrictions
- The target company holds land use rights, operates in sensitive sectors (defense, publishing, telecommunications), or has access to national security resources
Registration Documents
Standard dossier for share acquisition:
- Share/capital transfer contract between buyer and seller
- Target company’s current IRC and ERC (certified copies)
- Buyer’s incorporation documents (legalized, notarized)
- Investment project proposal (for first-time FDI registration)
- Resolution of the target company’s members/shareholders approving the transfer
- Financial statements of the target company (most recent audited year)
- Proof of buyer’s financial capacity (bank statements, parent company guarantee)
Foreign Ownership Limits
Vietnam maintains sector-specific foreign ownership restrictions:
| Sector | Maximum Foreign Ownership | Basis |
|---|---|---|
| Unrestricted sectors | 100% | Default under Investment Law |
| Banking | 30% (49% for restructuring) | Law on Credit Institutions 2024 (Law 32/2024/QH15) |
| Telecommunications (basic) | 49% | WTO commitments |
| Aviation | 34% (airlines) | Civil Aviation Law 2023 (Law 68/2023/QH15) |
| Securities | 49% | Securities Law (as amended by Law 57/2024/QH15) |
| Retail (multi-location) | Requires ENT | EVFTA, CPTPP commitments |
| Logistics | 49–100% (varies by sub-sector) | WTO commitments |
Before initiating an M&A transaction, verify the applicable foreign ownership limit for the target’s specific VSIC codes. Some limits are being progressively relaxed under FTA commitments (EVFTA, CPTPP, RCEP).
Tax Implications
Decree 320/2025/ND-CP (effective 15 December 2025) restructured capital gains taxation on share transfers. The tax treatment depends on the seller’s status:
For the Seller
| Seller Type | Tax Rate | Tax Base | Notes |
|---|---|---|---|
| Foreign corporate | 2% | Gross proceeds | Deemed tax — no deductions for cost basis |
| Vietnamese corporate | 20% | Net gain (proceeds − cost basis − expenses) | Standard CIT treatment |
| Vietnamese individual | 0.1% | Gross proceeds | Flat rate, no election mechanism |
Foreign corporate sellers must settle tax obligations before the Enterprise Registration Authority updates shareholder records. The seller — not the buyer — is responsible for declaration and payment.
Indirect Transfers
Decree 320/2025 (Article 12) formally recognizes indirect capital transfers — where an offshore holding company transfers ownership of a Vietnamese subsidiary. Foreign corporate sellers pay 2% CIT on the portion of proceeds attributable to Vietnamese assets. This closes a gap that previously made offshore restructuring a common tax minimization strategy.
For the Buyer
No direct acquisition tax on share purchases. Key considerations:
- Stamp duty may apply on asset transfers within the deal (land use rights, vehicles)
- Goodwill amortization: if purchase price exceeds net asset value, goodwill is amortized over 10–20 years for CIT purposes
- Inherited tax positions: all of the target’s CIT incentives, carried-forward losses, VAT positions, and pending tax audit findings transfer to the buyer
Transfer Pricing
Related-party transactions are subject to transfer pricing scrutiny under Decree 132/2020/ND-CP. The acquisition price must reflect arm’s-length value — independent valuation reports are essential documentation.
What M&A Transactions Cost
Professional and regulatory costs for a typical FDI share acquisition:
| Cost Component | Typical Starting Point |
|---|---|
| Legal advisory (SPA drafting, DPI filing) | From VND 50 million+ (~USD 2,000+) |
| Tax advisory and structuring | From VND 30 million+ (~USD 1,200+) |
| Financial/tax due diligence | From VND 50 million+ (~USD 2,000+) |
| Independent asset valuation | From VND 20 million+ (~USD 800+) |
| Capital gains tax (seller) | 2% of gross proceeds (foreign corp) |
Fees scale with deal complexity — number of entities, cross-border structures, and sector-specific licensing all affect scope. For a typical small-to-mid-size deal, total professional costs start from VND 150 million+ (~USD 6,000+) excluding the transaction price and seller’s tax obligations. Larger or multi-entity transactions require separate scoping.
Cost estimates above reflect typical market ranges based on our transaction advisory experience and are indicative only — actual fees depend on deal scope and complexity.
Due Diligence Red Flags
Share acquisitions transfer all historical liabilities to the buyer. These issues consistently delay or kill FDI deals in Vietnam:
- Pending tax audit or unresolved tax disputes — the target’s tax exposure becomes the buyer’s on closing day
- SHUI underpayment or misclassification — Social Insurance arrears carry penalties of 0.03%/day and can trigger criminal liability for the legal representative
- Land lease irregularities — expired leases, unauthorized subletting, or land-use purpose mismatches with IRC
- Undisclosed related-party contracts — off-market pricing creates transfer pricing exposure retroactive to transaction date
- Outstanding employee disputes or unpaid wages — unresolved labor claims and severance obligations transfer to the buyer, with DOLISA enforcement risk
A structured tax due diligence process identifies these exposures before the SPA is signed. For complex transactions — particularly manufacturing targets or companies with multi-year tax audit gaps — engage independent advisors early.
Post-Acquisition Integration
After the transaction closes and IRC/ERC amendments are completed:
| Action | Timeline | Notes |
|---|---|---|
| IRC amendment | 15–35 days | Reflects new investor identity |
| ERC amendment | 3–5 days | Updates legal representative, charter |
| Tax authority notification | 10 working days | Update tax registration |
| Bank account signatory update | Varies | New authorized signatories |
| Employee notification | Immediate | Labor Code 2019 requires notice |
| SHUI account update | 30 days | If legal entity details change |
| Customs registration update (EPE) | 10 days | If investor of record changes |
Capital flow: the buyer’s investment funds enter Vietnam through the Direct Investment Capital Account (DICA) at a Vietnamese bank. The bank releases payment to the seller’s account only after receiving the amended IRC confirming the ownership transfer — ensuring regulatory compliance before funds move.
For M&A advisory, share transfer registration, and post-acquisition integration — including capital restructuring and Indochina Link’s company formation and restructuring service — contact the advisory team. David Nguyen leads transaction support and due diligence, with Ken Lam providing independent financial assessment.
This guide reflects M&A regulations as of March 2026 under the Investment Law (Law 61/2020/QH14, as amended by Law 90/2025/QH15), Decree 168/2025/ND-CP, Decree 320/2025/ND-CP, and Tax Administration Law (Law 38/2019/QH14). Foreign ownership limits and sector restrictions are subject to FTA-driven changes — verify current thresholds before structuring transactions.
