The share purchase agreement is where a Vietnamese M&A deal stops being a handshake and becomes enforceable rights. Most disputes we litigate trace back to clauses that were copied, not thought – so here is what a share purchase agreement must actually do in Vietnam.
What makes a Vietnamese share purchase agreement different
Templates drafted for Singapore or Delaware assume institutions Vietnam does not replicate. Title to shares passes through the company’s register and enterprise registration, not the contract alone. Payment by foreign buyers must route through capital accounts. And where the buyer is foreign, the M&A approval sits between signing and closing as a condition the share purchase agreement must sequence correctly.
Conditions precedent that work
Good conditions are objective, dated and allocated: who obtains the approval, by when, and what happens if it fails. A long-stop date with a clean walk-away right protects both sides better than optimistic silence.
Price and adjustment
Choose deliberately between a locked-box price with leakage protection and completion accounts with an adjustment mechanism. In Vietnam, completion accounts collide with local bookkeeping practice more often than buyers expect – our due diligence work is what tells you which mechanism the target’s records can support.
Warranties a seller can give
Warranties should map to what a Vietnamese company can certify: licences held, tax filings made, land documents valid, no undisclosed debt requiring settlement. Blanket warranty schedules imported from other markets produce disclosure exercises that satisfy nobody and litigation that enriches only counsel.
Remedies that survive contact with courts
Escrows and price holdbacks beat indemnity promises, because a remedy you hold is worth more than one you sue for. Where indemnities matter, define caps, baskets and time limits in numbers – Vietnamese courts enforce what the share purchase agreement states and imply very little.
The signing-to-closing sequence
The reliable order: sign the share purchase agreement with conditions; obtain approvals; move funds through the proper accounts; execute the transfer; update the register and enterprise registration; release escrow per the mechanics. Each step generates a document, and the file of those documents is what protects the buyer years later when memories differ.
Clauses buyers regret omitting
Interim covenants between signing and closing: without them, the seller can pay dividends, hire relatives and sign ten-year contracts while the buyer waits for approval. A share purchase agreement without operating restrictions in the gap invites exactly the mischief it should prevent.
Non-compete and non-solicit terms with teeth: scope, territory, duration and a liquidated damages figure Vietnamese courts can apply. Vague restraints protect nobody.
Tax allocation for the transfer itself: capital transfer tax falls on the seller by law, but withholding mechanics can put collection risk on the buyer. State who files, who withholds and who indemnifies – in numbers.
And a dispute clause chosen deliberately: VIAC arbitration for confidentiality and speed, or courts for coercive power. The worst share purchase agreement clause is the one copied from a template whose author never imagined Vietnamese enforcement.
What a share purchase agreement review costs – and saves
A focused review of a draft share purchase agreement takes our team two to four days and returns a marked-up draft plus a one-page risk memo ranked by money at stake. Against deal values, the fee rounds to zero; against the disputes we later litigate on unreviewed templates, it is the cheapest insurance in Vietnamese M&A.
Sellers benefit equally: a seller-side review before circulation removes the clauses buyers weaponise in negotiation and replaces open-ended exposure with capped, dated, insurable commitments. Whoever drafts first frames the deal – and framing is worth more than any single clause.
Share purchase agreement: frequently asked questions
Which language and law govern?
Bilingual agreements with Vietnamese law are the default for domestic targets – registration authorities and courts work in Vietnamese. Foreign law and arbitration can govern shareholder arrangements sitting above the transfer, a split structure we use regularly.
Can the deal close on signing day?
Only when no approvals apply and payment can complete same-day – rare for foreign buyers. Plan a gap and paper it: the interim covenants between signing and closing are where the target’s value is protected.
Who should hold the escrow?
A bank escrow with documented release conditions, held domestically for enforceability. Our M&A team drafts and operates these mechanics as standard; general guidance on transfer formalities is published by the Ministry of Finance.
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.
