Private Placements to Foreign Investors under Decree 245/2025 now follow a clearer documentation path, and issuers need to reconcile the new placement conditions with any parallel M&A approval requirements before closing. Decree 245/2025/NĐ-CP, effective from 11 September 2025, amends Decree 155/2020/NĐ-CP to add clearer rules on the documentation required to establish professional securities investor status for foreign individuals and entities incorporated under foreign law.
The change has a direct bearing on the ability of foreign funds and financial institutions to participate in private placement Vietnam foreign investors transactions — a fundraising channel increasingly favoured by both public and non-public Vietnamese companies over public offerings. This briefing, prepared by IVLF Advisors’ capital markets advisory team, walks through how foreign professional investor status is now established, the supporting documentation required, private placement conditions, transfer restrictions, and how a placement interacts with M&A approval and foreign ownership limit requirements.
Who qualifies as a professional securities investor after Law 56/2024/QH15 and Decree 245/2025
Law No. 56/2024/QH15, amending the 2019 Securities Law, expanded the definition of professional securities investor to explicitly include foreign-nationality individuals and entities incorporated under foreign law that carry out investment and business activities in Vietnam. Decree 245/2025/NĐ-CP operationalises this by adding accepted categories of supporting documentation compatible with foreign-issued papers — rather than requiring conversion into Vietnamese-format documents as under the prior regime.
The practical significance is considerable. Before Decree 245/2025, many foreign funds struggled to reformat financial statements, capital certificates or asset confirmations into Vietnamese-recognised documentation before they could be recognised as professional investors — an administrative bottleneck that regularly delayed private placement Vietnam foreign investors transactions.
Documenting foreign professional investor status: legalisation and certified translation
For foreign-nationality individuals, acceptable documentation includes a securities trading code confirmation, a valid passport, or other legitimate identification bearing foreign nationality details. For entities incorporated under foreign law, the file typically includes a certificate of incorporation together with audited financial statements or a portfolio value confirmation from the investor’s custodian.
One point issuers and investors routinely underestimate: documents issued by a foreign authority or institution still require consular legalisation (unless exempted under an international treaty to which Vietnam is a party) and certified Vietnamese translation before submission to the issuer or the regulator. This step is easy to lose in a deal timetable, particularly where the buyer sits across multiple time zones and needs lead time to process documents at home.
Private placement conditions for public and non-public companies
For a public company, the conditions for a private share placement under the amended Securities Law include: shareholder approval of the issuance plan at a general meeting, clearly defined investor eligibility criteria and headcount (limited to strategic investors and professional securities investors only), a specific plan for use of proceeds, and a minimum six-month gap between consecutive private placements measured from the completion date of the prior offering. For a non-public company, the process is simpler and follows the 2020 Enterprise Law as amended by Law No.
76/2025/QH15 on share issuance to existing shareholders or third parties, together with the market access conditions under the 2025 Investment Law where foreign ownership crosses a relevant threshold in a company operating in a conditional-access sector.
Transfer restrictions and their effect on fund exit timing
This is a point foreign investors — particularly private equity funds with a defined fund life — need to model carefully before participating in a private placement Vietnam foreign investors round. Privately placed shares, convertible bonds and bonds with warrants carry a minimum transfer restriction of three years for strategic investors and one year for professional securities investors, running from the completion date of the offering.
The law allows limited exceptions: transfers between professional securities investors, transfers under an effective court judgment or arbitral award, or transfer by inheritance. For a fund planning to exit within 12–18 months, choosing strategic investor status (three-year lock-up) instead of professional investor status (one-year lock-up) can directly affect the fund’s ability to meet an exit timeline already committed to its limited partners.
Setting the issue price and existing shareholder challenge risk
The issue price for a private placement is set by the general meeting or, under delegation, by the board of directors — but in practice it should be supported by an independent valuation, particularly where the price sits materially below market value or book value, to limit the risk of existing shareholders challenging the dilution as unsupported. In deals involving foreign investors, the independent valuation file also matters when the issuer or transferee needs to substantiate the transaction price to the tax authority for income tax purposes.
Counsel’s view: The largest legal risk our team sees in private placements is not establishing professional investor status — Decree 245/2025 has meaningfully simplified that step — but issuers failing to prepare a proper independent valuation file and a properly authorised general meeting resolution before launching the placement, which creates exposure to shareholder challenge or a regulator request for supplementary documentation that extends the deal timeline.
Interaction with M&A approval and foreign ownership limits
A private placement Vietnam foreign investors transaction is rarely a standalone legal event. If post-placement foreign ownership (aggregated with existing foreign shareholders) reaches or exceeds 50% of charter capital, or the company operates in a conditional-access sector, the transaction may need to proceed through the capital contribution/share purchase approval procedure under the 2025 Investment Law in parallel with the placement itself.
Companies should also check their current foreign ownership headroom before fixing the number of shares to be offered to foreign investors, to avoid a scenario where a shareholder-approved placement cannot be completed because it would exceed the applicable foreign ownership cap. Planning the private placement, M&A approval (where triggered) and foreign ownership limit check as parallel workstreams from the outset avoids having to rework the filing or amend the issuance plan mid-process.
Frequently asked questions
What documents does a foreign investor need to qualify as a professional securities investor? Individuals need a passport or securities trading code confirmation; entities need a certificate of incorporation and audited financial statements or a custodian portfolio value confirmation, consular-legalised and certified-translated into Vietnamese. How long is the transfer restriction on privately placed shares? A minimum of one year for professional securities investors and three years for strategic investors, from the completion date of the offering, subject to statutory exceptions. Does a private placement to foreign investors always require M&A approval? Not always — it is only mandatory where post-transaction foreign ownership reaches the threshold under the 2025 Investment Law or the company operates in a conditional-access sector.
IVLF Advisors’ capital markets advisory team supports issuers and foreign investors from structuring a private placement through to completion. Request our private placement process map (PDF) for a step-by-step timeline.
Private Placements to Foreign Investors: Common Compliance Pitfalls
A frequent mistake in private placements to foreign investors is finalizing the subscription agreement before confirming the target’s remaining foreign ownership room under the current FOL. Ownership headroom can shift between due diligence and signing if other foreign investors are acquiring shares in parallel.
A second common error is treating Decree 245/2025 disclosure obligations to existing shareholders as optional. Pre-emptive rights and shareholder notification requirements under the Enterprise Law still apply to private placements and must be cleared before closing.
Private Placements to Foreign Investors: A Due-Diligence Checklist
Foreign investors structuring a private placement under Decree 245/2025 should confirm the following:
- Verify the target’s current, registered foreign ownership limit and remaining headroom at VSDC.
- Confirm shareholder pre-emptive rights have been waived or satisfied in accordance with the charter.
- Check whether the placement price meets any regulatory pricing floor or valuation requirement.
- Confirm lock-up and transfer restriction periods applicable to privately placed shares.
- Assess whether the transaction should instead be structured as part of a broader IPO or listing process if the issuer is heading toward a public offering.
More Questions on Private Placements to Foreign Investors
Is regulatory approval required for every private placement to a foreign investor? Requirements vary by sector and by the size of the resulting foreign ownership stake; conditional sectors typically require sign-off beyond a standard corporate resolution.
Can a private placement be used to exceed the sector’s foreign ownership limit? No — a private placement to foreign investors must still respect the applicable FOL; exceeding it requires a change in the underlying sector classification or a specific regulatory exception, not merely a different transaction structure.
For the current regulatory framework, consult the State Securities Commission of Vietnam or the government legal portal at vanban.chinhphu.vn.
Private Placements to Foreign Investors: Related Resources
For structuring support on Private Placements to Foreign Investors under Decree 245/2025, see IVLF Advisors’ capital markets advisory services, and review the official decree text via the Government Portal on Legal Policy.
Private Placement Structuring Checklist for Foreign Investors
Investors evaluating a private placement into a Vietnamese target should confirm the following before signing a term sheet, since Decree 245/2025 tightened several procedural requirements.
- Investor eligibility. Confirm the offer is limited to eligible professional securities investors or a maximum of 99 non-professional investors, as applicable to the specific instrument.
- Foreign ownership headroom. Cross-check the target’s current foreign ownership limit before sizing the private placement, since exceeding the ceiling can invalidate the subscription.
- Lock-up and transfer restrictions. Confirm the minimum holding period applicable to privately placed shares or bonds before planning any secondary sale or exit.
- Disclosure coordination. Where the target is a public company, align the private placement timeline with its existing disclosure and corporate governance obligations to avoid a compliance gap.
Issuers weighing a private placement against a public route should also review our IPO and listing requirements guide for a side-by-side comparison of timeline and cost.
Decree 245 2025 Private Placement Vietnam: What Foreign Buyers Need to Confirm
Foreign funds evaluating a deal under Decree 245 2025 private placement Vietnam should confirm early whether their allocation qualifies as a foreign investor private placement shares Vietnam transaction subject to the tightened lock-up and disclosure conditions. Robust private placement compliance Vietnam company practice now requires board approval documentation to be filed before the offer memorandum is circulated, not after.
Structuring a share issuance foreign investor Vietnam round also means checking whether the target’s FOL room is sufficient to absorb the new shares without breaching sector caps.
Structuring a private placement into a Vietnamese company? Contact IVLF Advisors for compliance and structuring support.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
