Foreign Investors Acquiring Vietnamese Companies: Legal Process 2026

Can Foreign Investors Acquire Vietnamese Companies Legally?

Yes. Vietnamese law allows foreign investors to acquire local companies through:

• Capital contribution
• Share acquisition
• Transfer of capital contributions

That said, transactions must comply with:

• Market access conditions
• Foreign ownership limits
• Investment and enterprise registration procedures

Failure to verify these conditions in advance is one of the most common reasons transactions are rejected or invalidated.

Common M&A Structures in Vietnam

Foreign investors typically enter the Vietnamese market through:

• Full acquisition (100% ownership)
• Partial acquisition (joint venture structure)
• Combined capital contribution and acquisition

In practice, foreign investors acquiring Vietnamese companies must carefully structure their transactions to comply with both investment and enterprise regulations. Failure to structure the deal correctly is one of the most common reasons why foreign investors acquiring Vietnamese companies encounter legal obstacles in Vietnam.

When Does a Company Become an FDI Enterprise?

Under current regulations, a company is considered a foreign-invested enterprise (FDI) when:

• Foreign investors own more than 50% of charter capital; or
• Foreign investors have controlling rights over management and operations; or
• Foreign entities indirectly control the company through capital ownership

This is a critical component of M&A and foreign investment activities in Vietnam. Once classified as an FDI enterprise, the company must comply with foreign investor conditions and regulatory requirements.

Procedures for Foreign Investors Acquiring Vietnamese Companies in 2026

The acquisition process generally consists of two key stages:

Stage 1: Legal Review & Investment Registration (if required)

Foreign investors must submit an application for capital contribution or share acquisition to the Department of Finance where the target company is headquartered.

Typical documents include:

• Application for capital contribution/share purchase
• Legal documents of the investor
• Preliminary agreement between parties
• Capital transfer agreement
• Land use right certificate (if applicable)

Processing time: approximately 15 working days. Once approval is granted, the company updates its shareholder/member information (3–5 working days).

Stage 2: Enterprise Registration Amendment

This step formalizes the new foreign investor’s legal status.

Required documents include:

• Approval notice for capital contribution/share acquisition
• Notification of changes in enterprise registration
• Capital transfer agreement (certified copy)
• Proof of payment via bank transfer
• Updated list of shareholders/members
• Beneficial Ownership Declaration (Form No. 10 – mandatory from July 1, 2025)
• Legal documents of the foreign investor

Processing time: Within 3 working days from submission of a valid dossier.

Tax Implications of Capital Transfer

For Limited Liability Companies (LLCs):

• Tax declaration must be submitted within 10 days
• No immediate tax payment required

For Joint Stock Companies (JSCs):

• Tax must be declared and paid within 10 days
• Rate: 0.1% of total transfer value, regardless of profit.

Key Legal Conditions for Foreign Investors Acquiring Vietnamese Companies

Here are the most critical conditions that directly affect the legality of the transaction and its likelihood of being approved by the competent authorities.

1. Conditions for Foreign Investors

• Not subject to investment prohibitions or restrictions
• Comply with market access conditions and ownership limits
• Register capital contribution if required
• Conduct payments through investment capital accounts
• Declare beneficial ownership (if applicable)

2. Conditions for Foreign Organizations

• Valid legal status
• Consular legalization of documents
• Financial capacity (if required)

3. Conditions for the Target Company

• Business lines are not restricted or prohibited
• Compliance with existing members’ pre-emptive rights
• Transparent legal documentation
• Fulfillment of tax obligations

Key Practical Notes from Real Transactions

Based on practical advisory experience, Fareast Legal highlights five common risks:

Based on advisory experience, several recurring issues often arise:

1. Ownership limits are overlooked early
Many deals collapse after negotiation due to undiscovered foreign ownership restrictions.

2. Internal offering procedures are not properly documented
Lack of evidence can lead to disputes or rejection by authorities.

3. Confusion between investment and enterprise procedures
Skipping required investment approval may result in outright rejection.

4. Tax obligations are not verified
Unpaid taxes may delay or invalidate the transaction.

5. Beneficial Ownership declaration is missed
Since July 1, 2025, this is mandatory for all enterprise changes.

Why Legal Advice Is Critical for Foreign Investors

In practice, foreign investors acquiring Vietnamese companies often underestimate the complexity of Vietnam’s regulatory framework. Legal risks do not usually arise from the process itself, but from incorrect assumptions about ownership limits, licensing conditions, or procedural requirements.

Working with experienced legal advisors helps ensure that:
– The transaction structure is legally compliant
– All regulatory approvals are obtained in the correct order
– Risks related to tax, ownership, and control are minimized

For foreign investors acquiring Vietnamese companies, early legal review is not optional — it is a critical factor in ensuring a successful transaction.