Acquiring a Vietnamese company: share deal, asset deal or capital subscription, LLC and JSC transfer mechanics, the Article 21 registration in full, sequencing with the ERC amendment and the capital account, and foreign ownership caps

Three ways to buy into a Vietnamese business

A foreign investor that wants an existing Vietnamese business has three routes. In a share deal it buys existing capital in a limited liability company (LLC) or existing shares in a joint stock company (JSC) from the current owners. The company, with its licences, land rights, contracts, employees, tax history and liabilities, stays exactly as it was; only its owners change. In a capital subscription the investor pays new money into the company in exchange for new capital or newly issued shares, so the price goes to the company rather than to the sellers and the existing owners are diluted. In an asset deal the investor, through a Vietnamese company of its own, buys selected assets of the business, such as equipment, inventory, intellectual property, land use rights and contracts, leaving the seller's company and its history behind.

In Vietnam the share deal dominates, for practical reasons. Most operating licences, land leases and incentives attach to the company and its investment project and cannot be assigned; an asset deal therefore usually means reapplying for them in the buyer's name, which defeats the object of buying an established business. Article 21 of Law No. 143/2025/QH15 on Investment treats a capital contribution, a share purchase and a purchase of capital contributions as forms of investment that do not need an Investment Registration Certificate (IRC), and the outline of when they must nevertheless be registered is in Forms of investment. This section explains the transaction mechanics in more depth: how capital and shares are transferred under the Law on Enterprises, the registration procedure in full, the order in which the steps must be taken, and the sector caps that can limit the stake a foreign buyer may hold.

Buying capital in a limited liability company

An LLC has members, not shareholders, and its capital is expressed as each member's contributed capital rather than as shares. In a multi-member LLC, Article 52 of Law No. 59/2020/QH14 on Enterprises, as amended by Law No. 76/2025/QH15, gives the other members a statutory pre-emption right: a member who wishes to sell must first offer the capital to the other members in proportion to their holdings, on the same terms, and may sell to an outsider only the portion the members have not taken up within 30 days of the offer. A sale to a foreign buyer made without that offer can be challenged by the other members, so the buyer should require written waivers from every member, or the minutes of a members' council meeting recording the waivers, as a condition of completion. If the transfers leave only one member, the company must reorganise as a single-member LLC and register the change within 15 days of completion.

In a single-member LLC the owner may sell all or part of the capital freely. A sale of part of the capital to a new member converts the company into a multi-member LLC, and a sale of the whole capital to a new owner leaves it a single-member LLC with a new owner; either way the change is registered with the business registration office. The buyer becomes a member when its details are entered in the members' register, and the change of members is notified to the business registration office within ten days, after which an amended Enterprise Registration Certificate (ERC) is issued. Because the ERC of an LLC records its members, the business registration office sees every LLC capital transfer, which is one reason an Article 21 registration cannot be skipped: the office will ask for the registration authority's confirmation before it records the foreign buyer where one is required.

Buying shares in a joint stock company

Shares in a JSC are freely transferable under Article 127 of the Law on Enterprises, subject to two exceptions. Founding shareholders may not transfer their ordinary shares to non-founders for three years from the ERC without approval of the general meeting (Article 120), and the charter may restrict transfers, but only if the restriction is stated on the share certificates. A transfer of shares in an unlisted JSC is made by a written contract or on the securities trading system where the shares are registered, and the buyer becomes a shareholder when it is entered in the shareholder register. The ERC of a JSC does not list ordinary shareholders, but the company must notify the business registration office within ten days of any change in its foreign shareholders while the company is unlisted, and of any change in beneficial owners (Beneficial ownership and transparency).

Where the target is a public company, whether or not listed, a different set of rules applies: shares are transferred through the securities depository, foreign ownership limits are tracked by the Vietnam Securities Depository and Clearing Corporation, and an acquisition of 25% or more of the voting shares generally requires a public tender offer. Those rules are explained in Public companies, securities and foreign ownership limits. For a capital subscription in a JSC, the company issues new shares by private placement under Article 125 of the Law on Enterprises, existing shareholders having a pre-emption right on a pro rata offer unless they waive it or the general meeting resolves otherwise, and the increase in charter capital is registered within ten days of completing the issue.

When the Article 21 registration applies, and who counts

Article 21 of the Law on Investment requires a foreign investor to register a capital contribution or share purchase with the investment registration authority before the change of members or shareholders is recorded in three cases: the target carries on a business line that is subject to market access conditions for foreign investors and the transaction increases the foreign share of its charter capital; the transaction takes aggregate foreign ownership from 50% or less to more than 50%, or increases it when it is already above 50%; or the target holds land use rights on an island, in a border or coastal commune, ward or township, or in another area affecting national defence and security (FAQ 98).

Three points of application cause most difficulty. First, the test is aggregate foreign ownership, so a sale of 10% to a foreign buyer in a company already 45% foreign-owned crosses 50% even though the buyer itself stays a minority. Second, a Vietnamese company that is itself more than 50% foreign-owned counts as a foreign investor under Article 20 of the law, so a sale between two Vietnamese companies can trigger the registration if the buyer is foreign-controlled. Third, a transaction that takes the target above 50% makes the target itself a foreign investor for its own later projects, which then need IRCs, and obliges it to open an investment capital account (The investment capital account). Outside the three cases, the parties simply complete and register the change of owners. An indirect acquisition, by buying a foreign holding company that owns the Vietnamese target, does not change the target's register and is not registered under Article 21, but it is taxable in Vietnam and may be notifiable under the competition rules.

The Article 21 registration and completion, step by step

1. Classify the target's business linesMap every registered and actual line of the target to its VSIC code and check it against Appendix I of Decree No. 96/2026/ND-CP (foreign market access) and the conditional lines under Article 7 of the Law on Investment. Lines the target has registered but never used should be removed before signing if they carry a cap or condition the buyer cannot meet, because the registration authority tests the registered lines.
2. Compute foreign ownership before and afterCount every direct foreign holder and every Vietnamese holder that is more than 50% foreign-owned. Decide whether the deal increases foreign ownership in a conditional line, crosses or rises above 50%, or involves sensitive land.
3. Prepare the registration dossierThe written registration on the form prescribed by Circular No. 55/2026/TT-BTC of 15 May 2026, stating the tentative transaction value; the investor's legal status documents, apostilled or legalised and translated; the target's ERC; the document recording the agreement in principle between the parties; and, for sensitive land, copies of the land use right certificates.
4. File with the investment registration authorityFiling is made to the provincial Department of Finance, or the zone management board where applicable, for the place where the target has its head office, through the National Investment Information System or in hard copy as the authority directs.
5. Await the decision within 15 daysThe authority must notify the investor within 15 days of a valid dossier whether the market access conditions are met. Where the target holds sensitive land, the authority consults the Ministry of National Defence and the Ministry of Public Security, and their opinions frequently take longer than the statutory period.
6. Sign or complete the transferWith the registration notice in hand, the parties sign the Vietnamese-language transfer contract required by the business registration office (or bring the main agreement into effect) and the buyer pays through the investment capital account where a resident is party.
7. Declare the seller's tax within ten daysThe target, or a Vietnamese buyer that pays, declares a foreign corporate seller's 2% tax on Form 05/TNDN no later than the tenth day after the transfer agreement takes effect (Tax on share transfers and dividends).
8. Register the change of owners and beneficial ownersWithin ten days, file the change of members (LLC) or notification of foreign shareholders (unlisted JSC), with the Article 21 notice, the transfer contract or evidence of completion, and the updated beneficial owner information. The business registration office processes a valid filing in three working days.

Sequencing: registration, completion, payment and the ERC amendment

The order of the steps matters because each authority looks for evidence of the previous one. The business registration office will not record a foreign member or shareholder whose acquisition needed Article 21 registration without the registration authority's notice. The bank that operates the investment capital account will not release a payment for a share transfer between a resident and a non-resident without the documents that identify the transaction, typically the transfer contract and, after completion, the registration of the change. And the tax point for the seller's 2% tax is the date on which the transfer agreement takes effect, not the date of completion, so the agreement should be drafted so that it takes effect only when the conditions are satisfied if the parties do not wish the ten-day declaration period to start at signing.

A practical sequence for a foreign buyer of a majority stake in an LLC is therefore: sign a conditional agreement (or a term sheet and a binding agreement in principle), file the Article 21 registration and, where needed, the merger control notification and any sector approval; on receipt of the notices, sign the short-form Vietnamese transfer contract, open or update the target's investment capital account, pay the price, declare the 2% tax, and file the change of members within ten days. If the buyer is acquiring more than 50%, the target must open its own investment capital account and future capital, profit and divestment flows pass through it. Where the buyer is paying a non-resident seller and neither is in Vietnam, the price is usually paid offshore in foreign currency, but the target still declares the tax and registers the change. The documents and closing mechanics are covered in Deal documents and closing mechanics.

Conditional sectors and foreign ownership caps

The Article 21 registration is where the foreign market access conditions are applied to an acquisition. Appendix I of Decree No. 96/2026/ND-CP lists 23 lines closed to foreign investors, in which no foreign acquisition is possible, and 62 lines open on conditions, which may include a cap on foreign ownership, a required form of investment or Vietnamese partner, or limits on scope (Market access for foreign investors). Familiar examples include facilities-based telecommunications, capped at 49% foreign ownership, with up to 65% for non-facilities-based services under Vietnam's WTO commitments (FAQ 94); and commercial banks, where foreign investors are capped at 30% in aggregate, 15% for a single foreign institution and 20% for a strategic investor, with up to 49% permitted under Decree No. 69/2025/ND-CP for a bank that takes over a weak lender (FAQ 92). A company with several conditional lines must meet the lowest cap among them.

On top of market access, the conditional business lines under Article 7 of the law (142 from 1 July 2026 under Resolution No. 66.17/2026/NQ-CP; 137 from 1 March 2027) require a licence, certificate or approval from every investor (FAQ 91). A change of owner does not usually cancel a sector licence, but many licences must be updated, and some regulators, notably the State Bank of Vietnam for credit institutions, the Ministry of Finance for insurers and securities companies, and the sector ministry for education and healthcare, must approve a change of a significant owner before it takes effect. A foreign-invested company that distributes or retails goods also needs a business licence for those trading rights, issued from 18 October 2026 under Decree No. 342/2026/ND-CP (FAQ 95), and an acquisition that takes a Vietnamese distributor above the foreign ownership threshold must obtain one before it continues those activities.