Structuring Private Equity Investment into Vietnam usually comes down to a choice between direct onshore investment, a Singapore holdco, or a two-tier structure.
Structuring a private equity investment in Vietnam — direct investment, a Singapore/Hong Kong holdco, or a two-tier structure — is a decision that shapes tax exposure, exit flexibility, control and contract enforceability well before the first dollar is deployed.
This briefing, prepared by IVLF Advisors’ private equity practice, analyses the four most common structuring options for investing into Vietnam and the criteria for choosing between them.
Four common structures and when to use each
PE/VC investors into Vietnam typically choose between: (i) direct investment from the fund’s home jurisdiction; (ii) an intermediate holdco in Singapore or Hong Kong; (iii) a two-tier structure combining a holdco with a Vietnamese SPV; or (iv) indirect investment through an onshore securities investment fund. The choice depends on deal size, the intended exit route and the investor’s tax sensitivity.
Direct investment into a Vietnamese company: pros and cons
Direct investment is structurally simple, avoids the cost of maintaining an intermediate entity, and sidesteps treaty-abuse scrutiny. The main drawback is that a direct foreign investor bears Vietnamese capital-gains tax on exit at the domestic rate (currently a deemed 2% on gross transfer proceeds for foreign corporate sellers, effective 15 December 2025) without the benefit of double-tax-treaty optimisation.
Singapore and Hong Kong holdcos: treaty benefits and substance requirements
A Singapore holdco structure can access the Vietnam–Singapore double-tax treaty and Singapore’s broad treaty network on exit. To claim treaty benefits, however, the holdco must satisfy substance requirements — real personnel, an office and genuine management activity in Singapore — rather than functioning as a mere paper intermediary.
Substance risk and treaty anti-abuse rules
Vietnamese tax authorities increasingly apply a “beneficial owner” test when assessing treaty-benefit claims. A holdco with no genuine activity, existing solely to capture a tax advantage, risks having treaty benefits denied and being assessed at the standard domestic rate.
Investors should maintain documentation evidencing the holdco’s genuine management activity.
Repatriating capital and profits: DICA accounts and outbound transfer conditions
Foreign investors must open and use a Direct Investment Capital Account (DICA) under Circular 06/2019/TT-NHNN for capital contributions, dividend receipts and profit repatriation. Profit repatriation is only permitted after the company has fulfilled its financial obligations to the State and produced audited financial statements, and the authorised commercial bank will review documentation before approving the transfer.
Enforceability of a foreign-law SHA against a Vietnamese company
A shareholders’ agreement governed by foreign law (e.g., Singapore or English law) is generally recognised as a matter of freedom of contract under the 2015 Civil Code, but provisions directly bearing on the organisation and governance of the Vietnamese company (board composition, voting thresholds) must still align with the Enterprise Law and the company charter to bind the company and third parties.
Comparison table
Across six criteria — structural simplicity, exit tax efficiency, substance requirements, maintenance cost, follow-on fundraising flexibility and familiarity to international investors — a Singapore holdco structure is typically the balanced choice for investments of USD 5 million and above, while direct investment suits smaller tickets with a shorter holding period.
Counsel’s view: No single structure is optimal for every deal — the structuring decision should be driven by the intended exit route from day one, since restructuring mid-hold typically triggers material tax and procedural costs.
Frequently asked questions
Is a foreign holdco required for PE investment into Vietnam?
Not required, but a Singapore/Hong Kong holdco typically offers tax and exit-flexibility advantages for larger investments. What is a DICA and why does it matter?
A foreign-currency Direct Investment Capital Account, mandatory for capital contributions and outbound profit transfers under State Bank of Vietnam regulations.
Is a foreign-law SHA enforceable against a Vietnamese company?
Generally yes in principle, but provisions on corporate organisation and governance must still align with the Enterprise Law and the charter to bind the company. IVLF Advisors’ private equity practice helps investors select and implement the optimal structure for their Vietnam investment.
Speak with our team about structuring your investment for tailored advice.
Structuring Private Equity Investment: Practical Takeaway
Structuring Private Equity Investment correctly means weighing the simpler compliance of a direct onshore route against the tax treaty benefits and exit flexibility a Singapore holdco can provide. For related structuring guidance, see IVLF Advisors’ private equity and fund formation advisory services.
Sponsors should also review guidance from the Ministry of Planning and Investment on foreign investment registration procedures that affect holding structure choice. Ultimately, Structuring Private Equity Investment decisions should be revisited whenever the exit strategy or investor base changes.
Private equity investment Vietnam: structuring roadmap
A private equity investment Vietnam structure should align investor eligibility, foreign ownership, tax, governance, funding and exit requirements.
Vietnam holding company structure
A Vietnam holding company structure can support governance and portfolio management but must be tested against licensing, tax and capital-flow requirements.
Onshore vs offshore investment Vietnam
The onshore vs offshore investment Vietnam decision depends on the investor base, treaty position, banking, exit route, substance and compliance costs.
Vietnam private equity legal advice
Vietnam private equity legal advice helps sponsors compare structures and coordinate approvals, documents and closing. Contact IVLF for a confidential structuring review.
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.
