Acquiring a Vietnamese Company as a Foreign Buyer: Process, Approvals, and Structuring Choices

The short answer

A foreign buyer acquiring a Vietnamese company generally chooses between a share deal (acquiring equity in the existing legal entity, converting it into a foreign-invested enterprise) and an asset deal (acquiring specific assets or business lines into a newly or separately established entity). Share deals are more common for acquiring an established operating business with valuable licenses, contracts, or market position; asset deals are more common where the buyer wants the operations without inheriting historical liabilities. Both require Vietnamese regulatory approval and differ meaningfully in tax treatment, timeline, and risk allocation.

Share deal vs asset deal

Share deal: 

• Preserves the target’s existing licenses, contracts, and business history — valuable where these have standalone worth

• Requires registration of the foreign investor’s capital contribution/share purchase (M&A registration), which may require approval depending on sector and ownership percentage

• The buyer inherits historical liabilities, including undisclosed tax and related-party exposure — making thorough due diligence essential (see our related article on M&A Due Diligence in Vietnam vs US Standards: Where the Gaps Actually Are)

• Generally subject to capital gains tax on the seller’s side (securities transfer tax at 0.1% of gross proceeds for listed shares, or capital gains-based taxation for other transfers), which affects negotiation dynamics

Asset deal: 

• Allows the buyer to select specific assets, contracts, and employees rather than acquiring the whole legal entity

• Generally leaves behind undisclosed historical liabilities tied to the seller’s legal entity

• May require re-obtaining licenses and re-establishing supplier and customer contracts in the buyer’s name, adding time and operational risk

• Tax treatment differs by asset class and requires separate analysis from a share deal

Approval requirements

Depending on the target’s sector, the size of the transaction, and the resulting foreign ownership percentage, an acquisition may require:

• M&A registration with the local Department of Planning and Investment (or equivalent), confirming the capital contribution or share transfer

• Competition authority notification or approval, where the transaction meets Vietnam’s merger control thresholds

• Sector-specific regulatory approval, for conditional sectors such as banking, education, real estate, or media

• Foreign exchange and capital repatriation registration, to ensure the transaction proceeds and any future returns can be legally remitted

Where foreign buyer deals stall or fail

1. Underestimating diligence time for founder-owned targets. Informal historical practices around related-party transactions, cash dealings, and licensing take longer to unwind than a comparable US or European target.

2. Assuming a signed SPA is the finish line. Vietnamese regulatory approval and registration steps happen after signing, and closing conditions need to explicitly account for this sequencing.

3. Underpricing post-closing tax and compliance remediation. Historical exposure identified in diligence needs to be reflected in price, escrow, or indemnity terms — not simply noted and set aside.

4. Treating the acquisition structure as a formality. The choice between share deal and asset deal has real, different tax and liability consequences that should be modeled specifically for the transaction, not defaulted to whichever structure is more familiar.

How W&A Consulting helps

We advise foreign buyers through the full acquisition lifecycle in Vietnam — structuring the deal, conducting legal and tax due diligence, negotiating share purchase or asset purchase agreements, and managing the regulatory approval and registration process through to closing. Our team’s combined legal, tax, and accounting expertise means diligence findings translate directly into negotiation leverage and deal structuring, rather than sitting in a separate report.

Considering an acquisition in Vietnam? Contact W&A Consulting for a deal structuring consultation.

FAQ

Is a share deal or asset deal better for acquiring a Vietnamese company?

It depends on the target — share deals preserve valuable licenses and business continuity but inherit historical liabilities; asset deals limit inherited liability but may require re-licensing and re-contracting.

Does a foreign acquisition in Vietnam need government approval?

Generally yes — M&A registration is required, and sector-specific or competition authority approval may also apply depending on the target and transaction size.

How long does a typical foreign acquisition take in Vietnam?

Highly variable depending on sector and target readiness, but founder-owned targets with informal historical practices typically require significantly longer diligence than a comparably sized US target.