Acquiring Companies in Vietnam: Procedures, Risks, and Contract Management

16 March, 2026 36 Views

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When a business decides to cease operations, undergoing complex and costly dissolution procedures is no longer the only option. Today, many owners prioritize the option of transferring the business—a “win-win” solution that saves time and costs while providing an effective capital recovery. In essence, the activity of Acquiring Companies in Vietnam is a localized form of Mergers and Acquisitions (M&A). Through this, the buyer comprehensively inherits everything from assets and business rights to existing legal obligations. To ensure a successful transaction, investors must strictly follow the statutory Procedures, conduct thorough due diligence to mitigate potential Risks, and implement strategic Contract Management to protect their long-term interests.

Concept of Acquiring Companies in Vietnam

When a company stops operating, rather than proceeding with dissolution to close the tax code, many owners choose the solution of selling the business. This method saves costs and generates an additional source of income.

In essence, this activity is a form of Mergers and Acquisitions (M&A). Through an M&A transaction, an individual or organization acquires the entire enterprise. From the moment the transfer is completed, the seller fully terminates their rights and obligations. Conversely, the buyer inherits all assets, rights, interests, and legal obligations of that enterprise.

Forms of Company Acquisition in Vietnam

According to the Law on Enterprises 2020, the direct sale of a company only applies to Sole Proprietorships. For other types of enterprises, the acquisition is performed indirectly through the transfer of all shares or capital contributions.

Target Company Type	Primary Procedure	Registration Outcome
Joint Stock Company (JSC)	Share Transfer Procedure	Change of Business Registration Certificate
Limited Liability Company (LLC)	Capital Contribution Transfer Procedure	Change of Business Registration Certificate
Sole Proprietorship	Direct Sale of Enterprise	Change of Business Registration Certificate
Partnership	Capital Contribution Transfer Procedure	Change of Business Registration Certificate

Procedures for Acquiring Companies in Vietnam

1. Joint Stock Company (JSC)

- Step 1: Due Diligence: Assess the business status, including operational status, licenses, labor usage, insurance compliance, financial statements, accounting records, tax reporting history, debts, and tax finalization.
- Step 2: Share Transfer: Performed via a transfer contract or stock market transaction. The dossier includes the Transfer Contract, Minutes and Resolution of the General Meeting of Shareholders, updated Shareholder Register, and amended Charter (if any).
- Step 3: Tax Declaration: Changes in shareholders do not require notification to the DPI (Department of Planning and Investment). However, the seller must declare and pay Personal Income Tax (PIT) within 10 days of signing the contract at the tax office where the company is headquartered.

2. Limited Liability Company (LLC)

Single-Member LLC:
- Step 1: Sign the Capital Transfer Contract and settle payment.
- Step 2: Tax Obligations & Business Registration: The seller files a PIT declaration within 10 days. Simultaneously, the company submits a notification of owner change (and legal representative, if any) to the DPI.
- Step 3: Completion: Within 3-5 working days, the DPI issues a new ERC. Parties finalize the handover of internal documents as per the contract.

Multi-Member LLC (2 or more members):
Pursuant to Article 52 of the Law on Enterprises 2020, a member must first offer to sell their capital contribution to remaining members under the same conditions. If members do not purchase within 30 days, the member may then transfer to external parties.

Step 1: Sign the contract and perform payment (Note: Institutional buyers must pay via bank transfer).
Step 2: PIT Declaration within 10 days by the seller.
Step 3: Submit the registration dossier for member changes at the DPI, including the Notification of Change, Resolution/Minutes of the Board of Members, Transfer Contract, and legal documents of the new member.

Sole Proprietorship
- Step 1: Prepare Legal Documents and Sign the Contract The parties proceed to sign the Transfer Contract. Subsequently, the necessary documents must be prepared, including:
  - Business Registration Dossier: Includes the notification of change to the Sole Proprietorship, the Contract, and notarized copies of the new owner’s legal identification documents.
  - Tax Declaration Dossier: Includes the Personal Income Tax (PIT) declaration form, the contract, and relevant supporting documents.
- Step 2: Personal Income Tax (PIT) Declaration Within 10 days from the date of signing the contract, the seller must submit the PIT declaration dossier to the Tax Branch where the enterprise is headquartered.
- Step 3: Register the Change of Owner and Receive Results The enterprise submits the dossier to the Department of Planning and Investment (DPI) within 10 days from the date of the change. Simultaneously, the fee for public disclosure of information must be paid as prescribed. Within 3 to 5 working days, the enterprise will be issued a new Enterprise Registration Certificate (ERC), officially completing the procedure.
4. Partnership

Before proceeding, the parties must clearly understand the legal regulations and basic conditions. According to the Law on Enterprises 2020, a partnership consists of general partners and contributing members, each with different transfer rights:
- For General Partners: They may not arbitrarily transfer part or all of their capital contribution to another person without the consensus of the remaining general partners.
- For Contributing Members: They may freely transfer their capital portion to another person, provided that the transfer does not alter the structure of the partnership.
Procedures for acquiring a partnership:
- Step 1: Sign the Contract and Perform Payment After reaching an agreement and meeting all conditions, the parties sign the transfer contract and carry out the payment:
  - For individuals transferring capital: Payment can be made in cash or via bank transfer.
  - For organizations: Payment methods such as checks or bank transfers must be used; cash payments are strictly prohibited.
- Step 2: Submit Dossier and Declare Taxes Within 10 days from the date of the change, the company must submit the notification dossier to change the business registration. The dossier includes key documents such as:
  - Notarized copies of the legal documents of the individual or legal entity transferring the capital.
  - Capital Contribution Transfer Contract.
  - Decision and Meeting Minutes of the Board of Members.
  - Notification of changes to business registration information.
  - List of members.
  Simultaneously, within 10 days from the date of signing the contract, the company must submit the PIT declaration dossier to the tax authority. The dossier consists of:
  - Income tax declaration form.
  - Capital Contribution Transfer Contract.
  - Documents related to the capital transfer: receipts, payment vouchers, accounting ledgers, etc.
  - Note: If the owner is a legal entity, the proceeds from the transfer will be included in the taxable income for Corporate Income Tax (CIT).
- Step 3: Receive Results

Risks and Contract Management in Vietnam M&A

Strategic Risk: Failure to define the purpose (e.g., market expansion vs. financial investment) leads to inaccurate valuation. The M&A purpose dictates contract handling: if integrating, the buyer must review and potentially renegotiate existing supply and labor contracts.
Due Diligence Risk: Inadequate investigation leads to missing hidden debts, legal disputes, or unsettled tax obligations. A critical risk is the “Change of Control” clause in existing contracts, which may allow partners to terminate agreements immediately upon the sale of the company.
Contractual Risk: A standard M&A contract must handle risks through:
- Representations & Warranties (R&W): Requiring the seller to guarantee the legal, financial, and labor status.
- Indemnification: The seller must compensate the buyer if warranties are breached (e.g., discovery of undeclared tax debt).
- Conditions Precedent (CP): The deal only closes when the seller resolves identified legal risks (e.g., pending litigation).
Operational & Integration Risk: Buyers may face a mass exit of key personnel. Contractually, the buyer must decide which supplier/customer contracts to retain, renegotiate, or terminate to align with the new strategy.
Legal Compliance Risk: Failure to comply with competition, labor, or investment laws can void a deal. Professional legal counsel is essential to detect risks in existing contracts and draft M&A agreements that protect the buyer’s maximum interests.

BKC’s Legal Consulting Services for Foreign Investment Contracts

BKC Law provides comprehensive solutions for entrepreneurs and investors, helping clients understand the process of drafting and negotiating foreign investment contracts—from structure advisory to clause review and legal compliance. Our team of senior lawyers with bilingual capabilities ensures all procedures are performed accurately and legally.

Contact BKC Law:

Phone: 0901 3333 41
Email: info@bkclaw.vn
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