A joint venture in Vietnam is won or lost in the drafting that precedes registration. The statute decides which licensing track applies; the shareholders agreement and the charter decide who controls the board, who can block a budget and how either party leaves. Parties that negotiate the commercial headline and defer the rest typically pay for it at the first disagreement.
This guide is written for general counsel and investor-side lawyers. It maps the legal architecture under the Law on Investment No. 143/2025/QH15, shows how to align the shareholders agreement with the charter, and sets out practical tools for deadlock and exit. It closes with a risk matrix. Each section is framed around the question a client asks once a joint venture in Vietnam is on the table: what can we control, what can we block, and how do we leave if the relationship fails.
Legal Architecture of a Joint Venture in Vietnam
Three variables fix the architecture of any joint venture in Vietnam: the vehicle, the foreign ownership percentage and the quality of the local partner.
Corporate or Contractual Joint Venture in Vietnam
A corporate JV is an LLC or JSC whose members include the foreign investor and the partner. A contractual JV is a business cooperation contract (BCC), recognised by the Law on Investment as an investment form, without a new entity; it uses a BCC operating office (form I.1.14, Circular 55/2026/TT-BTC [verify form code]). BCC parties must open their own capital accounts, with a separate account set per BCC (Circular 38/2026, Articles 6 and 7.1). For long-term control and financing the corporate form is usually preferred.
| Joint venture in Vietnam: form | Corporate JV (LLC/JSC) | Contractual JV (BCC) |
|---|---|---|
| Legal personality | Yes; separate entity | No; parties contract directly |
| Control tools | Charter, board, SHA | Contract, operating office |
| Capital account | One set per company | Separate set per BCC |
| Exit | Transfer of shares or capital | Contract terms; assignment of rights |
The 50% Line and the Licensing Track
Under Article 20.1 of the Law on Investment 2025, an entity with more than 50% foreign charter capital is treated as a foreign investor; at 50% or below it is treated as domestic (Article 20.2). A new project of the former needs an IRC (Article 26.1(b)); the latter, and a pure capital contribution or share purchase, do not (Article 26.2). Foreign ownership of a target moving above 50%, or increasing in a conditional sector, requires registration before the change (Article 21.3(a)–(b)). Sector caps in Article 8.3 apply regardless of the percentage.
Diligence on the Local Partner Vietnam
Diligence on the local partner Vietnam should cover capacity and authority, assets to be contributed (especially land-use rights), litigation and debt, and beneficial ownership. Decree 168/2025/NĐ-CP, Articles 17–19, requires identification of natural persons holding 25% or more or exercising control, directly or indirectly, so the partner must produce its ownership chart to individual level. Obtain it before term sheet signature, together with the partner’s charter, good-standing evidence, board authority for the transaction and title documents for any asset it will contribute. Warranties on these points belong in the SHA and survive completion.
Shareholders Agreement Vietnam: Enforceability and Charter Alignment
The shareholders agreement Vietnam practitioners rely on for a joint venture in Vietnam is a contract among the parties; the charter is the instrument that binds the company and is filed with the registry. The two must say the same thing on the points that matter.
Governing Law and Dispute Resolution
Parties to a commercial agreement may usually choose foreign law, subject to mandatory Vietnamese rules and public policy, and may choose arbitration; Vietnam is a party to the New York Convention on enforcement of awards [Verification Required on current recognition procedure]. Corporate-law questions such as board powers and share transfers remain governed by Vietnamese law in practice, so a foreign-law SHA should be tested against the Law on Enterprises. Name the arbitral institution, seat and language, and state that Vietnamese courts may be asked only for interim relief or enforcement.
Mirroring SHA Rights into the Charter
Reflect in the charter: higher voting thresholds, the list of matters requiring consent, board composition, transfer restrictions and information rights. Have both parties undertake to vote shares to give effect to the SHA. How far registries accept bespoke charter provisions varies [State Authority Practice / Verification Required].
Ancillary Agreements Around the SHA
The SHA rarely stands alone. Partners usually sign a technology or brand licence, supply or distribution agreements, shareholder loan terms and non-compete undertakings. Each should refer back to the SHA for conflicts, and related-party pricing should be reviewed with tax counsel because a partner on both sides of a contract creates transfer-pricing and governance exposure [verify current tax rules].
Planning Your Market Entry into Vietnam?
Foreign ownership restrictions and capital account regulations vary significantly by industry sector. Send your proposed business scope and target timeline to our Corporate Practice Team via WhatsApp or Email for a complimentary 24-hour Feasibility & Regulatory Check.
Reserved Matters and Statutory Voting Thresholds
In a joint venture in Vietnam, reserved matters are decisions that require the consent of a nominated party, usually the minority. The Law on Enterprises sets default voting thresholds by company type and decision, with higher thresholds for charter amendments, reorganisation and large asset sales [verify thresholds after Law 76/2025/QH15]. The SHA can only add to those protections, and a protection that exists only in the SHA binds the parties, not the company. Where the statutory threshold already gives the minority a block, do not spend negotiating capital on duplicating it; spend it on the matters the statute leaves to majority vote.
- Charter amendments, capital increase or reduction, new share issues.
- Annual budget and business plan beyond agreed variance.
- Related-party transactions; borrowing or guarantees above a cap.
- Appointment of the legal representative, general director and finance head.
- Transfer of shares, dissolution, merger and change of business scope.
Add information rights: monthly management accounts, access to books and a right to appoint the finance head or an observer. A minority that cannot see the numbers cannot exercise a veto in time.
Tie each reserved matter to a monetary threshold; an unbounded list converts minority protection into a veto over operations.
JV Deadlock: Prevention and Resolution
JV deadlock arises where reserved matters or an even board split prevent a decision. Prevention is cheaper than cure: define the matters, the quorum and the casting vote in advance.
Escalation and Tie-Break Mechanisms
A typical ladder runs: senior-executive meeting within a short period; mediation or an independent expert for technical issues; then a buy-out trigger. A chair’s casting vote can break operational ties but should not apply to reserved matters.
Buy-Out Mechanisms in a Joint Venture in Vietnam
Put and call options and buy-sell clauses are contractual; their enforceability turns on drafting, valuation method and the law chosen [Verification Required]. In a joint venture in Vietnam, any resulting share transfer still needs the corporate and investment steps described below. Two drafting points matter most: the valuation method (an independent valuer is more defensible than a formula nobody can audit) and the payment timetable, since a deferred price for a foreign seller must still be remitted through the capital account.
Hypothetical scenario: a 50:50 joint venture in Vietnam between a foreign manufacturer and a local land-holding partner reaches deadlock over the annual budget. Under a well-drafted SHA, the CEOs meet within 15 days, an independent accountant reviews the disputed capex, and if no agreement follows within 60 days either party may trigger a put/call at an agreed valuation formula. Without these terms, the parties face a stalled company and litigation over a charter that says nothing.
JV Exit Rights and Transfer Mechanics
JV exit rights in a joint venture in Vietnam are mostly contractual, but execution runs through regulation.
Contractual Exit Rights
In any joint venture in Vietnam, negotiate lock-up periods, pre-emption, tag-along and drag-along, a default call option and a put right on persistent deadlock. For LLC members, statutory pre-emption on transfers must be respected or waived [verify pinpoint].
Regulatory Steps on Exit
A transfer to a foreign buyer that takes foreign ownership above 50%, increases it in a conditional sector or concerns a target with land-use rights in sensitive areas needs registration before the change (Article 21.3), using form I.1.13 (Circular 55/2026 [verify]). Under Decree 31/2021 the decision took 15 days [verify under Decree 96/2026]. Returned capital and sale proceeds of a foreign party then flow out through the capital account (Circular 38/2026, Articles 8–9, 11–12) [verify bank practice].
Valuation drives every exit: agree the method in advance (independent valuer, earnings multiple or net asset value). Tax on a transfer depends on the seller’s status and the treaty position [verify with tax counsel].
Funding the Joint Venture in Vietnam under Circular 38/2026
Circular 38/2026/TT-NHNN, effective 18/08/2026, replaced Circular 06/2019/TT-NHNN. The market calls the account the DICA; the circular terms it the foreign investment capital account.
- Companies with more than 50% foreign charter capital must open it (Article 6); where foreign ownership later rises above 50% the company must open one (Article 7.6).
- Monetary contributions go by bank transfer into the account (Article 4.4); transfers may precede registration of the capital change (Article 4.5).
- Before the IRC, an already-established company may receive charter capital and pay lawful pre-investment costs; member enterprises transfer only from Vietnamese payment accounts (Articles 5.1, 7.3).
Capital contributions are due within 90 days of the enterprise registration certificate under the Law on Enterprises (Articles 47, 75, 113), excluding transport and import time for contributed assets. Both partners’ schedules should therefore be set in the SHA, with consequences for late contribution, and any in-kind contribution by the local partner valued before filing.
Whether a JV with 50% or less foreign ownership must open the account is not clear from the text; confirm the bank’s route for the foreign partner [Verification Required].
Risk Matrix for a Joint Venture in Vietnam
| Risk | Source | Rating | Mitigation |
|---|---|---|---|
| SHA and charter diverge | Rights held only in the SHA | High | Mirror key rights in the charter; voting undertaking |
| JV deadlock | Wide reserved list, even board | High | Monetary thresholds; escalation ladder; buy-out |
| Late registration of ownership change | Article 21.3 | Medium | Condition precedent to completion |
| Local partner opacity | Beneficial owner chain (Decree 168/2025) | Medium | Chart to individuals; warranties |
| Missed or late capital contribution | 90-day deadline (Law on Enterprises) | Medium | Contribution schedule and default remedies in the SHA |
| Funds outside the account | Circular 38/2026, Article 4.4 | Medium | Wire contributions only to the account |
For a joint venture in Vietnam, IVLF drafts the SHA and charter together through corporate and commercial advisory and handles share-transfer steps within M&A support.
Planning Your Market Entry into Vietnam?
Foreign ownership restrictions and capital account regulations vary significantly by industry sector. Send your proposed business scope and target timeline to our Corporate Practice Team via WhatsApp or Email for a complimentary 24-hour Feasibility & Regulatory Check.
Frequently Asked Questions
Does a joint venture in Vietnam need an IRC?
For a joint venture in Vietnam, only if foreign investors hold more than 50% and the company runs a new project (Articles 20.1, 26.1(b)). At 50% or below, treatment is domestic and no IRC is required (Article 26.2).
Can the shareholders agreement be governed by foreign law?
In a joint venture in Vietnam, often yes for contractual rights, subject to mandatory Vietnamese rules. Corporate matters follow Vietnamese law, so align the SHA with the charter and the Law on Enterprises, and choose arbitration for enforceability across borders.
What reserved matters do minority investors usually require?
Charter changes, capital increases, budget variance, related-party deals, borrowing above a cap, key appointments, share transfers and dissolution. Attach monetary thresholds to each, and require the SHA to bind both parties to vote shares accordingly.
How is JV deadlock usually resolved?
In a joint venture in Vietnam, through escalation to senior executives, mediation or expert determination, then a buy-out option. Enforceability depends on drafting, valuation method and the governing law [Verification Required].
Does a foreign buyer need approval to acquire a JV stake?
Not approval, but prior registration where foreign ownership passes 50%, rises in a conditional sector or the target holds sensitive land rights (Article 21.3). Make registration a condition precedent to completion.
Conclusion
Before the term sheet is signed, agree one page covering the ownership percentage, the reserved matters with thresholds, the deadlock ladder and the exit triggers, then draft the SHA and charter in parallel. That sequence gives a joint venture in Vietnam a path through disagreement, and it also gives your bank and the registry consistent documents when the first contribution is wired.
This article provides general legal information as of 10 October 2026 and is not advice on a specific matter. Seek counsel before making an investment decision.
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.
