FOREIGN INVESTORS ACQUIRING SHARES IN VIETNAM: LEGAL SERVICES & PROCEDURES

Acquiring shares in a Vietnamese company is one of the most preferred investment methods for foreign investors due to its procedural flexibility and the ability to enter the Vietnamese market quickly without establishing a new company. However, these transactions must strictly comply with current regulations and Vietnam’s market access conditions applicable to foreign investors. This article provides an overview of the legal services and procedures involved when foreign investors acquire shares in Vietnamese enterprises.

Forms of Share Acquisition by Foreign Investors in Vietnamese Companies

Under Vietnamese law, joint stock companies are entitled to issue shares for capital mobilization purposes. In practice, foreign investors may acquire shares in Vietnamese enterprises through the following common methods:

Acquisition of Newly Issued Shares: A joint stock company may offer shares in accordance with Article 123 of the Law on Enterprises. A share offering refers to the company increasing the number of shares authorized for sale in order to raise its charter capital. Foreign investors participate by subscribing to the newly issued shares.

Acquisition of Shares from Existing Shareholders: Foreign investors may acquire shares transferred from existing shareholders of a Vietnamese company. This is the most commonly used method due to its relatively flexible procedures and the ability for investors to quickly participate in the company’s operations.

Acquisition of Shares through the Securities Market: For public companies or listed companies, foreign investors may acquire shares through transactions on the securities market in accordance with securities regulations.

In practice, foreign investors often prioritize acquiring shares from existing shareholders or combine such acquisitions with the purchase of newly issued shares in order to gain greater control over business operations in Vietnam. Therefore, this article mainly focuses on procedures relating to the acquisition of shares from existing shareholders.

Procedures for Foreign Investors Acquiring Shares in Vietnamese Companies

Registration Procedure for Share Acquisition

Foreign investors are required to carry out procedures for registration of share acquisition with the competent investment registration authority in the following cases:

• • • • Share acquisition increases the foreign ownership ratio in an economic organization operating in business sectors subject to market access conditions applicable to foreign investors;
      • The share acquisition results in foreign investors or foreign-invested economic organizations holding more than 50% of the charter capital of the economic organization in the following cases:
        • • • Increasing the foreign ownership ratio from 50% or below to more than 50%;
            • Increasing the foreign ownership ratio where foreign investors already hold more than 50% of the charter capital of the economic organization;
      • Foreign investors acquire shares in an economic organization holding a land use right certificate for land located on islands, border communes/wards/special administrative units, coastal communes/wards, or other areas affecting national defense and security.

The application dossier generally includes:

• • • • Registration form for share acquisition;
      • Legal documents of the foreign investor and the target company;
      • Principle agreement regarding the share acquisition transaction;
      • Copy of the land use right certificate of the economic organization receiving capital contribution/share acquisition/capital contribution acquisition (in cases specified under Point b, Clause 4, Article 75 of Decree No. 96/2026/ND-CP).

After receiving the dossier, the Department of Finance (formerly Department of Planning and Investment) shall review the conditions for share acquisition and issue a notification approving the transaction if all legal requirements are satisfied.

Opening a Direct Investment Capital Account (DICA)

A Direct Investment Capital Account (DICA) is a payment account in foreign currency or Vietnamese Dong opened by a foreign direct investment enterprise (FDI enterprise) or foreign investor at a licensed bank in Vietnam to conduct transactions related to foreign direct investment activities in Vietnam.

Capital contribution by foreign investors through share acquisition must be conducted via bank transfer into the DICA in accordance with Circular No. 06/2019/TT-NHNN to ensure that capital contribution and investment receipt are implemented in compliance with legal regulations and within the prescribed timeline.

Documents Required for Opening a DICA include:

• • • • Account opening application form;
      • Enterprise Registration Certificate / Investment Registration Certificate;
      • Appointment decision of the chief accountant;
      • Identification documents of the legal representative and the person in charge of accounting;
      • Other supporting documents as required by the bank.

Post-Transaction Legal Update Procedures

After the completion of the share transfer transaction, the company must carry out legal update procedures to record changes relating to the foreign investor. Such procedures may include:

• • • • Amendment of the Enterprise Registration Certificate (ERC);
      • Updating the shareholder register;
      • Updating information of the foreign investor;
      • Amendment of relevant licenses or permits (if any).

In certain cases, where the transaction results in changes to the investment project, the company may also be required to amend the Investment Registration Certificate (IRC)

The acquisition of shares in Vietnamese enterprises by foreign investors is a legal transaction subject to strict regulations and must comply with market access conditions applicable to foreign investors, as well as all procedures prescribed under Vietnamese law.

For further consultation about Foreign investors acquire shares in Vietnamese, please contact BKCLAW via:

• Phone: 0901 333 341
• Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City, Vietnam

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