An FDI company acquisition Vietnam transaction differs from a domestic share purchase in three respects that drive the whole timetable: the buyer may need M&A approval before the share transfer can be registered, the target’s licences must be re-tested against foreign ownership conditions, and the payment must be routed through the correct account.
This guide sets out the seven steps we run on the buy side, and the points at which deals most often stall.
FDI Company Acquisition Vietnam Step 1: Test the Target Business Lines
Before diligence begins, map every registered business line of the target against market access conditions for the incoming buyer. Lines that a Vietnamese-owned target held freely may be capped or conditional once foreign ownership crosses the threshold.
Where a restricted line exists, the options are to carve it out before completion, to accept a capped holding, or to abandon it. Discovering this in week eight rather than week one is the most common cause of renegotiated price in an FDI company acquisition Vietnam deal. See our market access guide.
FDI Company Acquisition Vietnam Step 2: Determine Whether M&A Approval Is Required
Approval from the provincial investment authority is required before the share transfer where the transaction results in foreign investors holding more than the prescribed proportion of charter capital, where the target operates in a conditional line, or where the target holds land use rights in sensitive locations including islands and border or coastal communes.
The approval is a condition precedent, not a post-closing formality. Our note on M&A approval applications covers the dossier and timeline.
FDI Company Acquisition Vietnam Step 3: Legal and Tax Diligence
Diligence focuses on the corporate chain, land and lease title, licences and sub-licences, labour and insurance liabilities, tax exposures including transfer pricing, related party contracts, and any incentive the target enjoys that may not survive a change of ownership.
Incentive survival is regularly assumed rather than checked. Under Decree 96/2026/ND-CP a successor inherits incentives on reorganisation or transfer only where the conditions continue to be met, so a change in ownership or activity can extinguish them. Our legal due diligence guide sets out the scope.
FDI Company Acquisition Vietnam Step 4: Structure Price and Payment Routing
Where a foreign buyer acquires from a foreign seller, the consideration is settled between them offshore and does not pass through the target’s direct investment capital account. Where the seller is Vietnamese, the consideration must be settled through that account.
Getting this wrong at closing produces a payment the bank cannot process, and in the worst case a completed transfer with an unpaid seller. The routing should be agreed in the share purchase agreement and confirmed with the bank before signing. See our note on the DICA account.
FDI Company Acquisition Vietnam Step 5: Documentation and Conditions
The share purchase agreement should condition completion on M&A approval, on any required sub-licence reissue, on landlord and lender consents, and on delivery of the amended enterprise registration certificate. Warranties should be supported by a retention or escrow given the practical difficulty of enforcing a post-closing claim across borders.
Tax indemnities matter more in Vietnam than in many markets because tax audits routinely reach back several years and transfer pricing adjustments can be material. Our note on the share purchase agreement covers drafting.
FDI Company Acquisition Vietnam Step 6: Closing Mechanics
Closing runs in a fixed sequence: M&A approval issues, the transfer instrument is signed, the payment is routed correctly, the members register is updated, and the enterprise registration certificate is amended to record the new owner within ten days.
Where the target holds an investment registration certificate, an adjustment is filed to record the change in investor. Sub-licences that name the owner, such as certain business licences, are reissued separately. Building these into the completion checklist prevents a company that is legally sold but operationally unable to trade.
FDI Company Acquisition Vietnam Step 7: Post-Closing Integration
Post-closing work includes replacing the legal representative and updating banking mandates, reviewing related party contracts against the new group’s transfer pricing policy, aligning the accounting period, and refreshing labour documentation where the group standardises terms.
Capital gains tax on the seller’s disposal must be declared and paid within the statutory window, and the buyer frequently carries practical responsibility for ensuring it happens. Our note on post-merger integration covers the first hundred days.
Frequently Asked Questions
How long does an FDI acquisition take?
Three to six months is typical, with M&A approval and sub-licence reissue driving the timetable more than diligence.
Can the buyer acquire assets instead?
Yes, and it is preferable where the target has significant historic tax exposure, though land and licence transfer conditions then apply.
Does the target keep its tax incentives?
Only where the conditions continue to be met after the transfer. Verify during diligence rather than assuming.
Is competition clearance needed?
Economic concentration notification applies above prescribed thresholds and should be assessed in parallel with M&A approval.
Run Your Vietnam Acquisition
IVLF Advisors runs buy-side and sell-side processes: structuring, diligence, M&A approval, documentation, closing mechanics and integration. See also our M&A practice and guidance from the Ministry of Planning and Investment. Contact our team.
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.
