Industrial parks in Bac Ninh remain one of Vietnam’s brightest destinations for foreign direct investment. Partnerships between domestic and international investors bring substantial resources – but also latent risks of governance disagreement and conflicting economic interests. When conflict peaks and “adversarial” shareholders threaten day-to-day business, a transparent, lawful restructuring and exit strategy becomes a matter of survival. IVLF Advisors LLC recently advised on and successfully resolved a complex divestment for an FDI company in the region (the “FDI Company“).
1. A Governance Crisis at the FDI Company
The FDI Company was a partnership between a domestic executive shareholder group (represented by “Mr A”) and a foreign investor (“Mr J”) holding 25% of charter capital. The cooperation fractured quickly due to structural weaknesses in the original arrangement:
- No involvement in management: throughout the company’s operation, Mr J took no direct part in managing or working at the FDI Company or its affiliated project (“Project T”);
- Financial disagreement: despite his 25% stake, Mr J had never received annual returns from Project T or the FDI Company;
- Escalating internal conflict: tensions between Mr A and Mr J intensified over profit distribution and the foreign investor’s demand to withdraw his capital.
With negotiations deadlocked and operations at risk of paralysis, the executive shareholder group mandated IVLF Advisors LLC to design a comprehensive and safe exit.
2. The Restructuring Brief Given to IVLF
Our team assessed that this was not an ordinary capital transfer but a restructuring exercise demanding deep command of both finance and corporate law. The management board asked IVLF to resolve three core issues:
- Design a lawful exit route enabling Mr J to divest his entire holding in full compliance with current Vietnamese law;
- Unpick the historical cash flows: the deal’s biggest bottleneck was money Mr J had transferred directly into Project T’s payment account since 2015. IVLF re-examined the legal nature of those funds, advised on their treatment, and determined the precise final settlement amount acceptable to Mr J;
- Comprehensive risk management: assessing every latent risk in negotiating and executing the withdrawal, ensuring no post-closing exposure to claims, tax reassessment or breaches of foreign exchange control regulations.
Simplified exit structure designed by IVLF Advisors for the divestment.
3. The Independent Advisor’s Solution
Applying flexible commercial thinking on a solid legal foundation, IVLF untangled the transaction step by step. Rather than letting the matter drift into years of litigation, we proposed commercial mediation options paired with a tightly protected payment mechanism.
The successful divestment removed the internal conflict entirely, allowed the remaining shareholders to restructure their ownership ratios, cleaned up the company’s financial picture and readied the business for new partnership opportunities.
Key Legal References
- Law on Enterprises 2020 (as amended by Law No. 76/2025/QH15): capital transfer procedures, member/shareholder rights and post-closing registration updates, including beneficial-owner disclosure;
- Law on Investment: M&A approval and notification requirements applicable to transactions involving foreign investors;
- Foreign exchange control: the Ordinance on Foreign Exchange and State Bank guidance on investment capital accounts governing the routing of settlement payments.
Related practice areas: Mergers & Acquisitions · Dispute Resolution · Corporate & Commercial
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