A multi-layer ownership structure Vietnam investors build usually starts for a legitimate reason: ring-fencing project risk, accommodating co-investors, or preparing for a partial exit. It becomes a problem when a tier is inserted for the purpose of changing the regulatory characterisation of the tier below it.
This guide sets out the six controls we apply when reviewing layered structures, and what remediation looks like when a structure has already been built.
Multi-Layer Ownership Structure Vietnam: Recalculate at Every Tier
The foreign ownership proportion must be calculated at each tier, not only at the top. A Vietnamese company majority owned by foreign investors is treated as a foreign investor when it invests onward, which means a domestic-looking subsidiary can be a regulated foreign investor.
The calculation should also be run historically, at the date of each past transaction, because thresholds and sector conditions have changed. A multi-layer ownership structure Vietnam regulators review today will be assessed against the rules in force when each layer was created.
Multi-Layer Ownership Structure Vietnam: Identify the Purpose of Each Tier
Every tier should have a purpose that can be stated in one sentence and evidenced: liability ring-fencing, co-investor accommodation, financing, or preparation for a carve-out sale. A tier whose only function is to dilute the foreign percentage below a threshold is the one that fails.
Contemporaneous board minutes recording the commercial rationale are the cheapest protection available and are almost never present in structures that later come under challenge.
Multi-Layer Ownership Structure Vietnam: Test the Land Exposure
Where any tier holds land use rights, the analysis becomes materially more serious. Restrictions on foreign-invested enterprises receiving land use rights, and approval requirements for land in sensitive locations, apply on a look-through basis.
Structures assembled to hold land indirectly expose the underlying land transaction, not merely the corporate arrangement. Our note on the look-through principle in land law examines how this operates in practice.
Multi-Layer Ownership Structure Vietnam: Nominee Tiers Are Fragile
Where a Vietnamese tier is held by individuals under side agreements, share pledges, call options and powers of attorney, the economic entitlement depends on those contracts being enforceable. Under the Civil Code 2015 a transaction entered into to conceal another transaction is void.
Pledges over shares require registration to be effective against third parties, and a call option exercised in favour of a foreign investor still requires the ordinary approvals. The exit mechanism is therefore subject to the very restriction the structure was designed to avoid, as our analysis of the VIE structure explains.
Multi-Layer Ownership Structure Vietnam: Tax Substance and Treaty Access
Intermediate holding companies claiming treaty benefits on dividends, interest or capital gains must have substance: premises, personnel, decision-making and a business purpose beyond holding shares. Vietnam applies beneficial ownership and anti-abuse tests when treaty relief is claimed.
Layered structures also multiply related party transactions, each of which falls within Decree 132/2020/ND-CP as amended by Decree 20/2025/ND-CP. The documentation burden grows with each tier, and the interest deductibility cap applies at the level of the Vietnamese company regardless of where the debt sits.
Multi-Layer Ownership Structure Vietnam: Remediation Before Exit
Remediation is always cheaper before a transaction than during one. The usual steps are collapsing redundant tiers, converting nominee holdings into direct holdings with the necessary approvals, regularising historic filings, and documenting the commercial purpose of the tiers that remain.
Each step is a taxable and regulated event, so sequencing matters. Buyers and underwriters now ask the structure question early, and an unremediated chain either reduces price or kills the deal. Our guides to restructuring and tax and FDI acquisitions set out the mechanics.
Frequently Asked Questions
Are holding structures unlawful in Vietnam?
No. Layered ownership is ordinary and lawful. The problem is a tier inserted solely to change regulatory characterisation.
How far will authorities look?
To ultimate beneficial ownership where land, licensing or securities thresholds are engaged, and they examine funding and control, not only registers.
Can a structure be fixed after a challenge?
Sometimes, but options narrow sharply once a filing has been refused or a transaction unwound. Review before the next transaction.
Does the analysis change for listed companies?
Foreign ownership limits for public companies are calculated under the securities regime, with their own look-through mechanics.
Review Your Structure
IVLF Advisors maps ownership chains to ultimate beneficial owners, quantifies exposure, designs remediation and executes it ahead of fundraising or exit. See also our restructuring practice and 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.
