By Lawyer Luu Thi Hue – UniLaw LLC

VIETNAM STOCK PRICE: INSIGHTS FROM UNILAW

The landscape of foreign direct investment in Vietnam (FDI) has undergone significant transformation, particularly regarding how equity is valued and transferred in the corporate market. For international financiers, understanding the legal nuances behind a company’s stock price or share value is not merely a financial exercise but a deep dive into compliance, warranties, and regulatory hurdles. At Unilaw, we have witnessed numerous cases where the valuation of an acquisition was nearly derailed by hidden legal liabilities or shifts in the FDI Vietnam policy framework.

A Landmark Dispute on Share Warranties: The GPS and VMG Case

To begin our analysis, let us examine a high-stakes dispute that perfectly illustrates the intersection of M&A, stock valuation, and legal risk. In 2016, Global Payment Service (GPS) and UTC Investment, both South Korean entities, entered into a Share Purchase Agreement (SPA) with VMG Media Joint Stock Company to acquire a 62.25% stake in VNPT Electronic Payment Joint Stock Company (EPAY). The transaction was substantial, with GPS and UTC paying approximately 519 billion VND and 7 million VND respectively for their portions of the stock price.

The invest to Vietnam strategy seemed sound until April 2018, when key executives at EPAY, including the CEO and Business Director, were arrested for involvement in a massive illegal online gambling ring. EPAY was subsequently ordered by the Phu Tho Provincial Court to return over 50 billion VND in “illicit profits” to the state budget. GPS and UTC immediately filed claims against VMG, asserting that the seller had breached fundamental warranties regarding the legality of EPAY’s operations and the transparency of its financial health at the time of the share transfer. They argued that if the true nature of EPAY’s operations had been known, the stock price paid would have been zero, or the transaction would never have occurred.

The case went to the Singapore International Arbitration Centre (SIAC), which issued Award No. 186 in 2021. However, the legal battle shifted to Vietnam when the buyers sought to have this foreign award recognized and enforced. The Ho Chi Minh City Court had to grapple with whether the arbitration tribunal correctly applied Vietnamese law—specifically the Civil Code 2015 regarding tortious liability and non-contractual damages. This case highlights that investing Việt Nam requires more than looking at current earnings; it requires robust due diligence to ensure that the equity value isn’t built on a foundation of regulatory non-compliance.

Defining the Investor: The Foundation of FDI to Vietnam

Before an investor can even consider the stock price of a target company, they must establish their legal status under the Law on Investment. This classification determines the level of scrutiny and the specific procedures required for entry.

Article 3. Interpretation of terms of the Law on Investment 2020:

“18. Investment project is a set of proposals to spend medium-term or long-term capital to conduct business investment activities in a specific area, within a specified period of time.

19. Expanded investment project is an investment project to develop an active investment project by expanding the scale, increasing capacity, innovating technology, reducing pollution or improving the environment.

20. New investment project is an investment project implemented for the first time or an investment project independent of an active investment project.

…

32. Investor is an organization or individual performing business investment activities, including domestic investors, foreign investors and foreign-invested economic organizations.

33. Foreign investor is an individual with foreign nationality, an organization established under foreign law performing business investment activities in Vietnam.

34. Domestic investor is an individual with Vietnamese nationality, an economic organization that does not have foreign investors as members or shareholders.”

Layman’s Explanation: This article defines who is considered a “foreign investor” versus a “domestic investor.” It clarifies that if you are from another country or your company is registered abroad, you fall under the “foreign” category, which triggers different rules for how you can buy shares or start projects in Vietnam.

National Treatment and Equal Play in FDI Vietnam

One of the primary drivers for fdi to Vietnam is the statutory promise of equality. The Vietnamese government provides a legal guarantee that foreign players will be treated fairly compared to local companies, with specific exceptions tied to national security.

Article 5. Business investment policy of the Law on Investment 2020:

“1. Investors have the right to perform business investment activities in sectors and trades that this Law does not prohibit. For conditional business investment sectors and trades, investors must meet business investment conditions as prescribed by law.

2. Investors are entitled to self-decide and take responsibility for business investment activities according to the provisions of this Law and other relevant provisions of law; have access to and use credit capital sources, support funds, use of land and other resources as prescribed by law.

3. Investors are suspended, stopped or terminated from business investment activities if these activities cause harm or pose a risk of harm to national defense and security.

4. The State recognizes and protects the ownership rights of property, investment capital, income and other legal rights and interests of investors.

5. The State treats investors equally; has policies to encourage and create favorable conditions for investors to perform business investment activities and sustainably develop economic sectors.”

Layman’s Explanation: The government promises here that your property and profits are safe and that you have the same rights to do business as local Vietnamese companies. However, if what you’re doing is seen as a threat to national security, the government has the power to shut your project down.

Market Access Restrictions and Their Impact on Stock Valuation

When investing Việt Nam, the “fairness” principle is balanced against the “Negative List” approach. Foreign investors can enter most sectors unless specifically restricted. These restrictions often limit the maximum percentage of shares a foreigner can own, directly impacting the demand and price of that stock.

Article 9. Sectors and trades and market access conditions for foreign investors of the Law on Investment 2020:

“1. Foreign investors are applied market access conditions as prescribed for domestic investors, except for the cases specified in Clause 2 of this Article.

2. Based on laws, resolutions of the National Assembly, ordinances, resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties of which the Socialist Republic of Vietnam is a member, the Government shall announce the List of sectors and trades with restricted market access for foreign investors, including:

a) Sectors and trades not yet allowed for market access;

b) Sectors and trades with conditional market access.

3. Market access conditions for foreign investors specified in the List of sectors and trades with restricted market access for foreign investors include:

a) The ownership ratio of charter capital of foreign investors in economic organizations;

b) Form of investment;

c) Scope of investment activities;

d) Capacity of investors; partners participating in the implementation of investment activities;

đ) Other conditions as prescribed by laws, resolutions of the National Assembly, ordinances, resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties of which the Socialist Republic of Vietnam is a member.”

Layman’s Explanation: This law allows the government to set limits on how much of a company you can own (for example, only up to 49% or 51%) in certain sensitive industries like banking or telecommunications. If you want to buy 100% of a company, you first need to check if that industry is on the “restricted” list.

Procedures for Acquiring Shares and Determining Stock Price

The mechanics of buying shares—whether through a direct purchase or capital contribution—require strict adherence to procedural law. Failure to register a share transfer with the Investment Registration Authority can render the entire transaction void, as seen in many court cases.

Article 24. Investment in the form of capital contribution, purchase of shares, purchase of capital contributions of the Law on Investment 2020:

“1. Investors have the right to contribute capital, purchase shares, purchase capital contributions of economic organizations.

2. The fact that foreign investors contribute capital, purchase shares, purchase capital contributions of economic organizations must meet the following regulations and conditions:

a) Market access conditions for foreign investors specified in Article 9 of this Law;

b) Ensuring national defense and security according to the provisions of this Law;

c) Provisions of the land law on conditions for receiving land use rights, conditions for using land on islands, border communes, wards and townships, coastal communes, wards and townships.”

Layman’s Explanation: You have a legal right to buy into a Vietnamese company, but you must make sure that the industry is open to foreigners and that the land the company sits on isn’t in a high-security border or coastal zone.

Furthermore, Article 26 clarifies when you must get prior approval from the Department of Planning and Investment (DPI) before completing the transaction:

“2. Foreign investors perform procedures for registration of capital contribution, purchase of shares, purchase of capital contributions of economic organizations before changing members or shareholders if they fall into one of the following cases:

a) The capital contribution, purchase of shares, purchase of capital contributions increases the ownership ratio of foreign investors in economic organizations performing business in sectors and trades with conditional market access for foreign investors;

b) The capital contribution, purchase of shares, purchase of capital contributions leads to the case where foreign investors… hold more than 50% of the charter capital of the economic organization…

c) Foreign investors contribute capital, purchase shares, purchase capital contributions of economic organizations that have Certificates of land use rights on islands and border communes, wards and townships; coastal communes, wards and townships; other areas affecting national defense and security.”

Layman’s Explanation: If your purchase makes you the majority owner (over 50%) or if the company is in a sensitive area or industry, you can’t just sign a contract and be done. You must get a “nod” from the government first through an official registration process.

Valuation Disputes: Lessons from Recent Judgments

One of the most frequent sources of litigation handled by Unilaw involves the discrepancy between the agreed stock price and the actual value of the company’s assets. For instance, in Judgment No. 22/2020/KDTM-PT, the parties disputed a brokerage fee related to a titanium mining project. The court found that a share transfer agreement was effectively void because the underlying mining license did not meet the promised reserves.

Similarly, in a dispute between Mr. Woo Kwang S and Mr. Jang Gag H, a capital transfer agreement for 70% of a company valued at 5 million USD was declared void. The court noted that the transfer exceeded the seller’s actual ownership and was conducted in foreign currency without using a specialized investment capital account, violating State Bank of Vietnam regulations. Such procedural errors can lead to a total loss of the premium paid for the shares.

The Shield of Investment Guarantees

For those worried about the stability of their foreign direct investment in Vietnam, the Law on Investment provides several “shields.” These protections ensure that even if laws change, the investor’s financial interests are somewhat insulated.

Article 10. Guarantee of property ownership:

“1. Lawful assets of investors are not nationalized or confiscated by administrative measures.

2. In case the State buys or requisitions property for reasons of national defense, security or for national interests, state of emergency, disaster prevention and control, the investor shall be paid and compensated in accordance with the provisions of law on purchase and requisition of property and other relevant provisions of law.”

Layman’s Explanation: This is a guarantee against the government taking your stuff. If they absolutely have to take it for a public emergency, they are legally required to pay you back at a fair market rate.

Moreover, Article 13 provides protection against changes in the law that might negatively affect investment incentives:

“2. In case a new legal document is issued providing for new investment incentives, higher investment incentives, the investor is entitled to enjoy the investment incentives according to the provisions of the new legal document for the remaining incentive enjoyment period of the investment project…

3. In case a new legal document is issued providing for investment incentives lower than the investment incentives that the investor was previously entitled to, the investor may continue to apply the investment incentives as previously prescribed for the remaining incentive enjoyment period of the investment project.”

Layman’s Explanation: If you started a project because of a tax break, and the government later decides to cancel that tax break for everyone else, you get to keep yours until your original term is up. If they create a better tax break, you might even be able to switch to the better one!

Asset Repatriation: Moving Capital and Profits

A vital component of the stock price equation for foreign investors is the “Exit Strategy.” Investors need to know that after paying taxes, they can take their money back home.

Article 12. Guarantee of the right to transfer assets of foreign investors abroad:

“After performing full financial obligations to the State of Vietnam in accordance with the provisions of law, foreign investors are entitled to transfer abroad the following assets:

1. Investment capital, investment liquidation amounts;

2. Income from business investment activities;

3. Money and other property under the lawful ownership of the investor.”

Layman’s Explanation: Once you pay your taxes, you are legally allowed to take your original investment and all the profit you made out of Vietnam and back to your home country.

Strategic M&A: The Importance of Due Diligence

In our internal legal memos, Unilaw often advises clients on the strategic side of M&A. We emphasize that investing Việt Nam is not just about identifying a target but about structuring the deal to mitigate “contingent liabilities”—debts or legal obligations that aren’t on the balance sheet yet but could appear later.

For example, in a 2018 survey conducted for KIS Vietnam, we evaluated a target company specialized in food processing. The audit revealed that while the stock price seemed attractive based on its 03 factories and 675 staff, the company had significant gaps in its environmental compliance and labor reporting. Without rectifying these through “conditions precedent” in the contract, a buyer would have inherited millions of dollars in potential fines.

WTO Commitments and the Roadmap for Distribution Services

The stock price of companies in the logistics and distribution sectors is heavily tied to Vietnam’s WTO commitments. Investors from Japan, Korea, and the EU often seek to move from joint ventures to 100% ownership, a transition that Unilaw has managed for several clients, such as a Japanese-invested distribution client and MBS Logistics.

According to the WTO Schedule of Specific Commitments:

“Unless otherwise specified… foreign enterprises are allowed to establish commercial presence in Viet Nam in the form of business co-operation contract, joint venture enterprise, 100% foreign-invested enterprise.”

For specific sectors like Distribution Services, there was a phased timeline:

“As of 1 January 2009, none [limitations on foreign capital contribution].”

However, a “niche” restriction remains for certain goods. Foreign-invested companies are prohibited from distributing cigarettes, cigars, books, newspapers, magazines, precious metals, and pharmaceuticals. Furthermore, for retail, the “Economic Needs Test” (ENT) applies if the investor wants to open a second outlet. This means the stock price of a retail chain might be capped by its inability to expand freely without government discretion.

The Future: International Financial Centers and Strategic Technology

Looking ahead to 2025 and 2026, the government is introducing even more streamlined paths for investing Việt Nam. The introduction of International Financial Centers in Ho Chi Minh City and Da Nang will offer “special mechanisms”.

Provisions on Members of International Financial Centers:

“3.2.1. Rights of Members:

a) To establish capital management companies (holding companies) to mobilize capital from abroad and manage investments…

b) To mobilize capital from organizations and individuals outside the territory of Vietnam… without having to perform licensing procedures…

e) Members are entitled to choose to apply International Accounting Standards (IAS/IFRS)…”

Layman’s Explanation: These new zones will act like “mini-Singapores” within Vietnam. Companies operating there won’t have to deal with as much red tape when bringing in money from overseas and can use international accounting rules instead of just Vietnamese ones.

Additionally, for strategic technology projects (like 5G infrastructure or Big Data centers), Law No. 57/2024/QH15 and Decree 19/2025/NĐ-CP have established “Special Investment Procedures”. Under these rules, certain high-tech investors can skip months of waiting by using a “commitment-based” registration system. This significantly boosts the internal rate of return (IRR) and, by extension, the stock price and attractiveness of such ventures.

Navigating Disputes and Avoiding Litigation Pitfalls

If a dispute arises regarding share ownership, investors must be careful about where they sue. Vietnamese courts have “exclusive jurisdiction” over disputes involving real estate in Vietnam. In Judgment No. 03/2022/QĐST-KDTM, the court refused to recognize a Korean judgment because it involved ownership of a Vietnamese company whose primary assets were land and factories in Binh Duong. The court ruled that such matters must be decided by Vietnamese judges, not foreign ones.

At Unilaw, we help clients avoid these outcomes by drafting clear arbitration clauses. As stated in Article 14 of the Law on Investment:

“3. Disputes between investors in which at least one party is a foreign investor… shall be resolved through one of the following agencies and organizations:

a) Vietnamese Court;

b) Vietnamese Arbitration;

c) Foreign Arbitration;

d) International Arbitration;

đ) Arbitration established by agreement of the disputing parties.”

Layman’s Explanation: If you are a foreign investor, you have the luxury of choosing where to settle your fights. You can pick an international arbitration center (like in Singapore or Hong Kong) rather than going to a local court, but you must write this into your contract from day one.

Conclusion: The Unilaw Perspective

The stock price in a Vietnamese transaction is a reflection of many variables: market access, compliance history, land rights, and the stability of legal guarantees. As foreign direct investment in Vietnam continues to set records, the complexity of these deals grows. Whether you are conducting a share buyout in a logistics firm or setting up a multi-million dollar tech plant, the legal foundation remains the most critical asset. Unilaw stands ready to guide you through these intricacies, ensuring that your invest to Vietnam journey is both profitable and protected.

1. Global Payment Service & UTC Investment vs. VMG Media – Judgment 377, 378, 381 – Law on Investment 2020, Civil Code 2015.

2. Judgment 51/2025/KDTM-PT – Law on Enterprises 2020.

3. Judgment 22/2020/KDTM-PT – Law on Investment 2014, Law on Minerals.

4. Judgment 03/2022/QĐST-KDTM – Code of Civil Procedure 2015, Article 470.

9. Law on Investment 2020 (Law No. 61/2020/QH14) – Articles 3, 5, 9, 10, 11, 12, 13, 14, 24, 26, 36a.

10. Decree 31/2021/NĐ-CP – Articles 15, 16, 17, 27.

11. Decree 19/2025/NĐ-CP – Special Investment Procedures.

12. Circular 06/2025/TT-BKHĐT – Forms for Special Investment Procedures.