By Lawyer Luu Thi Hue – UniLaw LLC

Corporate M&A Lawyer in Vietnam – Unilaw

Mergers and acquisitions in Vietnam’s dynamic market demand more than transactional expertise—they require a corporate M&A lawyer who understands the intricate interplay between Vietnamese corporate law, foreign investment regulations, and practical commercial realities. At Unilaw, we have witnessed firsthand how seemingly straightforward share transfer agreements can unravel into protracted disputes when proper legal frameworks are ignored, corporate governance procedures are bypassed, or stakeholder rights are inadequately protected.

A recent case handled by our firm illustrates the complexity inherent in Vietnamese M&A transactions. A client approached Unilaw after a share transfer arrangement deteriorated into multi-party litigation involving questions of corporate membership, contractual validity, and governance authority. The dispute centered on a purported transfer of equity interests in a limited liability company holding forestry management contracts—a transaction that raised fundamental issues about the distinction between share transfers and asset transfers, the enforceability of agreements lacking proper corporate authorization, and the legal consequences when internal company procedures are circumvented.

This case, which ultimately reached the High People’s Court in Ho Chi Minh City (Case No. 73/2025/KDTM-PT, decided June 18, 2025), underscores why engaging a qualified corporate M&A lawyer at the outset of any transaction is not merely advisable but essential. The dispute involved multiple parties claiming rights under conflicting agreements, questions about who validly represented the company, and allegations of unauthorized transfers of company assets—all issues that proper legal counsel could have prevented or mitigated.

Understanding the Vietnamese Legal Framework for Corporate M&A

Vietnam’s legal regime governing mergers and acquisitions has evolved significantly, particularly with the Enterprise Law 2020 and supporting regulations such as Decree 01/2021/ND-CP on business registration. These frameworks establish clear procedures for share transfers, changes in company membership, and amendments to business registration—procedures that must be scrupulously followed to ensure transaction validity.

Under Vietnamese law, transferring equity in a limited liability company is not simply a matter of private agreement between the transferor and transferee. Article 52 of the Enterprise Law 2020 requires that share transfers in a multi-member limited liability company must comply with restrictions in the company charter and, critically, that the Members’ Council must approve the transfer unless the charter provides otherwise. Furthermore, any change in company membership triggers mandatory business registration obligations under Decree 01/2021/ND-CP.

The forestry sector case mentioned above demonstrates what happens when these requirements are ignored. One party claimed rights based on a contract purportedly transferring 60 hectares of forestry management rights—rights that were actually held by the company, not individually by the transferring member. The purported transferee argued he had become a company member based on a Members’ Council meeting minutes dated June 30, 2017. However, the court examined whether this meeting was properly convened, whether all members actually participated, and whether the resulting resolutions had legal effect.

A competent corporate M&A lawyer would have immediately identified several red flags: the absence of formal meeting notices, incomplete member participation, discrepancies between preliminary discussions and final documentation, and the attempted transfer of company assets without proper corporate authorization. These procedural deficiencies ultimately undermined the claimant’s position.

Critical Due Diligence in Vietnamese M&A Transactions

Effective due diligence in Vietnam extends beyond financial and commercial analysis. Legal due diligence must rigorously examine corporate governance documents, verify the authority of signatories, confirm compliance with business registration requirements, and identify any restrictions on asset transfers.

In the forestry management dispute, proper due diligence would have revealed that the 60-hectare forestry area was subject to a management contract between the company and the Provincial Forest Management Board (Contract No. 01/2016/HĐ-BQL dated January 19, 2016). This contract created rights and obligations for the company entity—not for individual members. Transferring such rights required not only internal corporate approval but also consent from the Forest Management Board, as the contract explicitly governed the company’s obligations to the state.

Vietnamese law strictly regulates the transfer of land use rights and natural resource management rights. The 2013 Land Law and forestry protection regulations establish that land use rights certificates are issued to legal entities, and any transfer must comply with both corporate law procedures and sectoral regulations. A corporate M&A lawyer with experience in Vietnam would structure such transactions to ensure compliance with both the Enterprise Law and relevant sectoral legislation.

The case also highlighted the importance of verifying business registration records. According to the Department of Planning and Investment of Kien Giang Province’s submission to the court, the company underwent multiple changes in membership and legal representation between 2017 and 2018. The official business registration records showed different membership structures than those claimed by the disputing parties. This discrepancy arose because certain purported changes were never properly registered, rendering them legally ineffective against third parties.

Corporate Governance and Authority to Bind the Company

A recurring issue in Vietnamese M&A disputes involves questions of authority: who has the power to bind the company, and under what circumstances? The Enterprise Law 2020 distinguishes between the authority of the Members’ Council (or Board of Members), the Chairman, and the Director. Each role has defined powers, and exceeding those powers can render transactions voidable.

In our client’s case, the dispute involved conflicting claims about who validly represented the company at different points in time. One party claimed authority based on Members’ Council minutes from June 2017 that allegedly appointed him as Director. However, other members contested the validity of that meeting, arguing it was never properly convened and that they never agreed to the appointment. Subsequently, business registration records showed a different individual as the legal representative, based on a share transfer transaction completed in January 2018.

This confusion could have been avoided through proper corporate governance procedures. A qualified corporate M&A lawyer ensures that Members’ Council meetings are properly noticed, quorum requirements are met, resolutions are properly adopted and documented, and changes in legal representation are promptly registered with the business registration authority. Article 60 of the Enterprise Law 2020 specifies detailed requirements for Members’ Council meetings, including notice periods, quorum, and voting thresholds—requirements that are not merely formalities but substantive prerequisites for valid corporate action.

The case also illustrates the principle established in Article 4 of Decree 01/2021/ND-CP: the business registration authority does not resolve disputes between members or between members and third parties. The Department of Planning and Investment correctly noted that it registers changes based on submitted documentation but does not adjudicate conflicting claims of authority. This means parties cannot rely on business registration alone to resolve governance disputes—they must ensure internal corporate procedures are followed correctly from the outset.

Distinguishing Share Transfers from Asset Transfers

One of the most significant legal issues in the forestry management case was whether the transaction constituted a share transfer or an asset transfer. This distinction carries profound legal implications under Vietnamese law.

The contract in question was titled a “transfer agreement” for 60 hectares of forestry protection land. However, the underlying legal reality was that the company—not any individual member—held the forestry management contract with the state. Individual members own shares in the company; they do not directly own the company’s assets or contractual rights.

If the transaction was intended as a share transfer (giving the transferee membership in the company), it should have complied with Article 52 of the Enterprise Law regarding share transfers, including Members’ Council approval and business registration. If it was intended as an asset transfer (selling company property), it would require authorization under Article 162 of the Civil Code 2015 and Article 46 of the Enterprise Law regarding transactions between the company and its members, which must be approved by the Members’ Council and conducted at fair market value.

The agreement in the case appeared to fall between these categories—structured as a personal transaction between two individuals but purporting to transfer rights that legally belonged to the company. A skilled corporate M&A lawyer would have restructured the transaction appropriately: either as a formal share transfer with proper corporate approvals and business registration, or as a company asset sale with Members’ Council authorization and compliance with related-party transaction requirements.

Share Purchase Disguised as Business Cooperation: Case Study 51/2025/KDTM-PT

A recent appellate decision from the Ho Chi Minh City High People’s Court (Case No. 51/2025/KDTM-PT, decided May 13, 2025) provides another instructive example of how inadequate legal structuring of equity transactions can lead to prolonged litigation and complete loss of shareholder rights. This case involved a purported “business cooperation agreement” that was in substance a share purchase arrangement—but one that failed to comply with basic requirements of Vietnamese corporate law.

In January 2019, Mr. Nguyễn Hoàng T and Mr. Lê Văn Minh L entered into a Business Cooperation Agreement under which Mr. T would contribute VND 1 billion to invest in Company P (a joint stock company) under Mr. L’s name. The agreement specified that Mr. T would receive 75% of profits from the capital contribution, while Mr. L would receive 25%. Mr. L also committed to supporting 25% of the interest costs on the VND 1 billion that Mr. T borrowed to make the investment. The cooperation term was two years, from June 1, 2018 to June 1, 2020.

In performance of this agreement, Mr. T transferred a total of VND 1,091,650,000 to Mr. L, which Mr. L acknowledged receiving and purportedly used to purchase shares in Company P. An addendum to the cooperation agreement stated that Mr. L committed to holding 10% of the equity value in Company P. However, after nearly four years, Mr. T received no profit distributions and Mr. L did not fulfill his commitment to support interest payments. When Mr. T demanded return of his capital and profits, Mr. L refused, claiming business losses.

Mr. T filed suit seeking a declaration that 109,165 shares in Company P (corresponding to his VND 1,091,650,000 contribution) were beneficially owned by him but held in Mr. L’s name, and requesting the court to order Mr. L to transfer those shares to him and require Company P to register him as a shareholder.

Legal Analysis: The Fatal Flaw in Transaction Structure

The trial court rejected all of Mr. T’s claims, and the appellate court modified the judgment only to order monetary restitution—not share transfer. The courts’ reasoning reveals a fundamental principle that corporate M&A lawyers must understand: under Vietnamese law, you cannot create beneficial ownership of shares through private agreements that bypass statutory corporate formalities.

The appellate court found that while Mr. L admitted receiving VND 1,091,650,000 from Mr. T, Mr. L could not prove at the time of the cooperation agreement that he owned 10% of Company P’s shares, nor could he prove that he actually used Mr. T’s funds to purchase shares in Company P. This evidentiary failure was fatal to the entire transaction structure.

More fundamentally, Company P’s authorized representative confirmed that the company never issued or offered for sale the 109,165 shares in question, and that Mr. T’s name never appeared in the company’s shareholder register. The company stated that the dispute between Mr. T and Mr. L was a private civil matter unrelated to Company P.

The court held that the Business Cooperation Agreement was void due to fraud (vô hiệu do bị lừa dối), because Mr. L had misrepresented his shareholding position and ability to deliver shares. As a consequence of the contract’s invalidity, the court ordered unwinding: Mr. L must return to Mr. T the full amount of VND 1,091,650,000 that Mr. T transferred. However, the court explicitly rejected Mr. T’s request for share transfer and registration as a shareholder, because there was no evidence that shares were ever held in Mr. L’s name on behalf of Mr. T or that Company P had any obligation to recognize Mr. T’s claimed ownership.

Statutory Requirements vs. Contractual Reality

This case starkly illustrates the gap between what parties believe they can achieve through private contract and what Vietnamese corporate law actually permits. Article 121 of the Enterprise Law 2014 (applicable at the time of the transaction) and Article 119 of the Enterprise Law 2020 establish that shareholders of a joint stock company are those whose names appear in the shareholder register maintained by the company. Share ownership is not established by side agreements between individuals—it requires registration with the company itself.

Moreover, if the transaction was intended to create a nominee shareholding arrangement (Mr. L holding shares on behalf of Mr. T), it should have been structured with proper documentation acknowledged by the company, including a declaration of beneficial ownership and appropriate corporate resolutions. Article 126 of the Enterprise Law 2014 sets forth detailed procedures for share transfers in joint stock companies, including requirements for written transfer agreements, endorsement of share certificates, and registration in the company’s shareholder register.

The cooperation agreement in this case satisfied none of these requirements. It was a purely private contract between two individuals that purported to create rights in a third-party legal entity (Company P) without that entity’s knowledge or consent. Under fundamental principles of Vietnamese civil and corporate law, such an arrangement cannot bind the company or create enforceable shareholder rights.

Article 504 of the Civil Code 2015 provides that contracts that violate prohibitions of law or are contrary to social ethics are invalid. While the cooperation agreement itself may not have violated any specific prohibition, the attempt to create shareholder status through means other than those prescribed by the Enterprise Law rendered the share-related aspects of the agreement unenforceable against the company.

Practical Implications for M&A Structuring

A qualified corporate M&A lawyer would have identified multiple red flags in this transaction structure and insisted on fundamental restructuring before any funds were transferred. First, before Mr. T transferred over VND 1 billion, counsel should have verified Mr. L’s actual shareholding in Company P through review of the company’s shareholder register, not merely relied on Mr. L’s representations. Second, if the transaction was intended as a share purchase, it should have been documented as such, with Company P as a party to acknowledge the transfer and update its records accordingly.

Alternatively, if the parties genuinely intended a profit-sharing arrangement without formal share ownership, the transaction should have been structured as a loan with profit participation rights, clearly documented as a creditor relationship rather than an equity investment. Such an arrangement would have given Mr. T contractual rights against Mr. L personally, without creating the false expectation of shareholder status in Company P.

The court’s decision to void the agreement and order monetary restitution, rather than specific performance through share transfer, underscores that Vietnamese courts will not rewrite defective transactions or impose obligations on companies that never agreed to recognize certain individuals as shareholders. The remedy for a failed equity investment structured outside proper corporate channels is unwinding and monetary recovery—not judicial creation of shareholder rights that were never properly established.

Frequently Asked Questions About Corporate M&A Legal Services

What does a corporate M&A lawyer do?

A corporate M&A lawyer structures and documents ownership transfers in business entities to ensure they comply with applicable corporate law requirements. In Vietnam, this includes verifying the seller’s actual shareholding through review of the company’s shareholder register, drafting share transfer agreements that satisfy the formalities prescribed by the Enterprise Law 2020, ensuring the target company acknowledges and records the transfer through shareholder register updates and capital contribution certificates, and structuring transactions to avoid the pitfalls illustrated in the Supreme Court case discussed above—where a purported equity investment failed because it bypassed mandatory corporate formalities. M&A counsel also conducts due diligence to confirm that representations about ownership are accurate, not merely asserted in private agreements between individuals.

Is an M&A lawyer the same as a merger and acquisition lawyer?

Yes, the terms “M&A lawyer,” “merger and acquisition lawyer,” and “mergers and acquisitions attorney” all refer to the same legal specialization. These professionals advise on transactions involving the transfer of ownership or control of business entities, whether through share purchases, asset acquisitions, mergers, or other restructuring arrangements. The core competency remains the same: ensuring that ownership transfers are properly documented, legally enforceable, and recorded in the company’s official records. As the Supreme Court case demonstrates, the distinction between a valid share transfer and an unenforceable private profit-sharing agreement depends entirely on compliance with corporate law formalities—precisely the expertise an m and a lawyer provides.

Why can’t a private agreement between two individuals create shareholder rights in a Vietnamese company?

Under Vietnamese corporate law, shareholder status is created through compliance with the Enterprise Law’s prescribed procedures, not through private contracts. Article 119 of the Enterprise Law 2020 requires that share transfers be recorded in the company’s shareholder register to be effective against the company and third parties. A cooperation agreement between two individuals that purports to grant one party rights in a company—without that company’s participation, acknowledgment, or register update—cannot bind the company or create enforceable shareholder rights. This principle, affirmed by the Supreme Court in Decision 32/2022/DS-GĐT, reflects the fundamental corporate law concept that a company’s official records, not undisclosed private arrangements, determine who holds ownership rights. Article 504 of the Civil Code 2015 further provides that contracts attempting to create legal effects through means contrary to mandatory law provisions are unenforceable in the aspects that violate those provisions.

What should I do if I’ve already invested money based on a verbal agreement or informal arrangement to acquire shares?

If you have transferred funds for an intended equity investment without proper corporate documentation, consult a qualified corporate M&A lawyer immediately to assess your legal position. As the Supreme Court case illustrates, courts may void defective share arrangements and order monetary restitution rather than enforce shareholder rights that were never properly established. Your remedy will likely be contractual recovery against the individual you dealt with, not recognition as a shareholder of the company. The sooner you engage counsel, the better your chances of restructuring the arrangement properly—if the other party is cooperative—or pursuing recovery before assets are dissipated. The case demonstrates that Vietnamese courts will not rewrite defective transactions or impose obligations on companies that never agreed to recognize certain individuals as shareholders; proper structuring at the outset is essential.

How can proper legal counsel prevent the problems illustrated in this case?

Competent M&A counsel would have identified multiple structural defects before any funds were transferred. First, counsel would verify the purported seller’s actual shareholding through independent review of the company’s shareholder register and charter, not rely solely on representations. Second, if the transaction was intended as a share purchase, it would be documented with the company as a party, ensuring immediate register updates and issuance of capital contribution certificates. Third, if formal share ownership was not feasible, counsel would structure the arrangement as a loan with profit participation rights or another mechanism that creates enforceable contractual obligations without the false expectation of shareholder status. The over VND 1 billion loss in the Supreme Court case could have been entirely avoided through proper structuring and documentation at the transaction’s inception—precisely the value a qualified mergers and acquisitions attorney provides.

Protect Your Investment with Experienced M&A Counsel

The Supreme Court decision analyzed in this article demonstrates that informal arrangements and private agreements cannot substitute for proper corporate documentation in Vietnamese M&A transactions. Whether you are acquiring shares in an existing company, selling your ownership stake, or structuring a profit-sharing arrangement, the legal formalities matter—and the consequences of non-compliance can be severe.

At Unilaw, our corporate and M&A practice combines deep knowledge of Vietnamese Enterprise Law with practical transaction experience. We structure ownership transfers to ensure they are legally enforceable, conduct thorough due diligence to verify representations about shareholdings, and draft documentation that protects our clients’ interests while satisfying all mandatory legal requirements. Our team has advised both Vietnamese and international clients on complex equity transactions, preventing the costly mistakes illustrated in the case discussed above.

If you are considering an equity investment, share purchase, or business acquisition in Vietnam, contact Unilaw’s corporate M&A team for a consultation. Proper legal structuring at the outset is far more cost-effective than litigation to recover funds from a defective transaction.