Buying shares in a Vietnamese company: when M&A registration is required

The three triggers for prior M&A registration

The acquisition (or subscription for new shares or capital) must be registered with the investment registration authority before closing if any one of these applies:

1. the target operates in a conditional market-access sector AND the transaction increases the total foreign ownership percentage. Both limbs are needed;
2. total foreign ownership moves from 50% or less to more than 50%, or increases while already above 50%;
3. the target holds a land-use right certificate for land in an island, border or coastal commune, or another area affecting national defence and security.

If none applies, the deal follows route R5. If one applies, it follows route R6. M&A registration is not an IRC: it is a prior confirmation that the foreign investor meets the conditions to become a member or shareholder.

Worked examples

Foreign ownership always means all foreign investors in the target together, before and after the deal.

Whether the sector is "conditional" for market access is a legal classification for counsel. Check every business line of the target, not just its main business: a restricted secondary line is a common miss. The Route Finder applies these tests to your facts.

Other approvals that run in parallel

Each of these is a separate regime. None replaces another, and a deal that needs no M&A registration may still need one of them:

• Economic concentration (merger control) notification to the National Competition Commission, if thresholds are met.
• Securities-law steps if the target is a public or listed company: foreign ownership room, trading code and custody, tender offer, disclosure.
• Sector regulator approval of the new owner for banking, insurance, securities and some other sectors.
• State-capital rules if the seller is the State or a State-owned enterprise.

Steps that apply either way

• Confirm the payment route with the bank before signing. Depending on the target's status, the price moves through the target's DICA or the investor's indirect investment account. See capital and FX.
• The seller's transfer tax filing may apply even where there is no gain (confirm with counsel).
• Register the change of members or shareholders with the Business Registration Office, and update beneficial owner information.
• Check whether existing IRCs and licences of the target need updating. No new IRC is needed merely because a foreigner becomes a shareholder.