Mergers & Acquisitions · 16.11.2024

MERGERS & ACQUISITIONS LAW FIRM IN VIETNAM – UNILAW

Two Vietnamese appeal judgments from the last two years say more about mergers and acquisitions in Vietnam than any checklist. Both turn on paperwork that looked finished and was not. Two decided cases on mergers and acquisitions in Vietnam The register said one thing, the accoun…

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By Lawyer Luu Thi Hue – UniLaw LLC

Two Vietnamese appeal judgments from the last two years say more about mergers and acquisitions in Vietnam than any checklist. Both turn on paperwork that looked finished and was not.

Two decided cases on mergers and acquisitions in Vietnam

The register said one thing, the accounts another

Judgment No. 11/2025/KDTM-PT of 19 June 2025 — Superior People’s Court in Da Nang, share transfer dispute.

A joint stock company in Quang Binh registered charter capital of VND 30 billion in 2016, then raised it to VND 120 billion in 2017 by offering shares to existing shareholders. Only one shareholder actually paid. He put in VND 19,326,200,000, and the company booked every dong of it as owner’s equity in the accounts from 2016 to 2020.

Yet the company never adjusted his shareholding and never entered him in the shareholder register. The court called that a breach of Articles 112(3), 121 and 124(4) and (5) of the Enterprise Law. Importantly, it also held the breach did not destroy his rights as a shareholder.

Then he sold. The contract of 1 May 2020 transferred 2,760,000 shares for VND 27.6 billion, which he called 23% of the company. His real holding was 1,932,620 shares, or 16.1%.

So the court upheld the contract for what he owned and declared the rest void. The court ordered him to repay VND 8,273,800,000, plus interest at 10% a year running from the day he took the money. Nearly five years of interest had accrued by the first-instance hearing.

The contract that forgot the money

Judgment No. 28/2024/KDTM-PT of 3 June 2024 — Superior People’s Court in Ho Chi Minh City, share transfer dispute.

The chairman of a joint stock company signed two transfers in March 2016: 600,000 shares for VND 6 billion, and 400,000 shares for VND 4 billion. Registration went through, and the buyer became legal representative within days.

The contracts said the shares changed hands at signature. However, neither said how, when or whether the VND 10 billion would be paid. Years later the buyers argued that the parties had signed a sham, purely to change the registered shareholders.

A debt reconciliation minute from June 2017 saved the sellers. On that evidence the court ordered payment of the VND 10 billion, set off VND 5 billion of counter-debts, and left VND 5 billion payable with default interest.

What the buyer actually buys

People call three quite different transactions an acquisition in Vietnam, and they are not interchangeable.

A purchase of shares in a joint stock company runs under Article 127. Buying a capital portion in a limited liability company runs under Article 52 instead, and there the seller must first offer the portion to the remaining members on the same terms. An asset deal does neither, because it leaves the target company, and its liabilities, with the seller.

The first two carry the target’s history with them. Consequently every unpaid tax, every disputed contract and every defective earlier transfer comes across with the shares.

When a foreign buyer must register the deal

Article 26(2)(c) of the Investment Law 2025 is the good news. Acquiring capital or shares in an existing company needs no investment registration certificate.

Article 21(3) then names the three cases where the foreign investor must still register with the investment authority before the members or shareholders change:

the purchase increases foreign ownership in a company operating in a sector with conditional market access;
it takes foreign ownership above 50% of charter capital, or increases it further once it is already above 50%;
the target holds land use rights on an island, or in a border or coastal commune, ward or special zone, or anywhere else affecting defence and security.

Beyond those triggers, Article 21(2) sets the substantive tests: market access conditions under Article 8, defence and security, and the land rules. As for where to file, the Department of Finance handles deals outside the zones and the zone management board handles those inside them, under Article 27.

Merger control: the thresholds that trigger a filing

Economic concentration is a separate clearance, and it catches domestic deals too. Under Article 33 of the Competition Law and Article 13 of Decree 35/2020/ND-CP, the parties must notify the National Competition Committee before closing if any one of these is met.

Total assets in Vietnam of a party, or its affiliated group, reach VND 3,000 billion in the preceding financial year.
Total sales or purchases in Vietnam reach VND 3,000 billion in that year.
The deal value is VND 1,000 billion or more.
The parties’ combined market share on the relevant market is 20% or more.

Credit institutions, insurers and securities companies have their own, higher figures in Article 13(2). Meanwhile Article 30 bans any concentration that significantly restricts competition, whatever the threshold.

Due diligence for mergers and acquisitions in Vietnam

Judgment 11/2025 shows where to start. The seller’s name on a certificate proves less than founders assume.

Check the shareholder register against the accounts, against the payment records and against every earlier transfer. Where the three disagree, the court will work out the real holding from the money actually paid, as it did in that case.

Two further items now sit in the statute. Since Law No. 76/2025/QH15 took effect on 1 July 2025, a company must keep a list of its beneficial owners under Article 4(35) and Article 25(5), and notify changes under Article 31(1)(c). A target that cannot produce that list is behind on its own filings.

What the contract must say in mergers and acquisitions in Vietnam

Judgment 28/2024 is the lesson in one line. The contract recorded that the shares moved, and said nothing about the money.

So set out the price, the account, the date and the trigger for each instalment. Furthermore, state plainly what happens if the registry refuses to record the change, because the registry decides that only after the signatures.

Add a warranty on the exact holding being sold. In the Da Nang case a single sentence of that kind would have exposed the gap between 23% and 16.1% before any money moved.

Statutory routes: merger, consolidation, division and split

Not every deal is a share purchase. Articles 198 to 201 of the Enterprise Law provide four corporate routes, and Article 201 on a merger shows how they work.

The absorbed company transfers all assets, rights and obligations to the absorbing company and then ceases to exist. A merger contract must cover the procedure, the labour plan, and how capital portions, shares and bonds convert. That contract goes to every creditor and to the employees within 15 days of approval.

After registration the absorbing company inherits the rights, the unpaid debts, the employment contracts and the other obligations. And Article 201(3) requires compliance with the Competition Law on top.

Legal basis

Investment Law, Law No. 143/2025/QH15, in force 1 March 2026 — Article 8 on market access, Article 21 on acquiring capital and shares and when registration is required, Article 26(2)(c) on the exemption from an investment registration certificate, and Article 27 on the competent authority.
Enterprise Law, Law No. 59/2020/QH14, as amended by Law No. 76/2025/QH15 of 17 June 2025 — Article 52 on transferring a capital portion, Article 127 on transferring shares, Articles 112, 121 and 124 on shares and the shareholder register, Articles 198 to 201 on division, split, consolidation and merger, and Articles 4(35), 25 and 31 on beneficial owners.
Competition Law, Law No. 23/2018/QH14 — Article 30 on prohibited concentrations and Article 33 on notification; Decree No. 35/2020/ND-CP, Article 13, for the thresholds.
Civil Code, Law No. 91/2015/QH13 — Article 131 on the consequences of a void transaction, and Articles 357 and 468(2) on default interest.

Decided cases are published on case.unilaw.vn. Deal work sits with our corporate M&A lawyers and our Vietnam corporate lawyers and the foreign-investor steps with our Vietnam investment lawyers. See also our notes on the limited liability company in Vietnam, the joint venture company in Vietnam, corporate law on mergers and acquisitions, and starting a business in Vietnam.

For the pre-closing registration triggers, the transfer mechanics and the merger-control thresholds in one place, see M&A in Vietnam: approvals, transfers and mergers.