Buying an operating (brownfield) solar project is far faster than building new — but it concentrates legal and tax risks into one deal. Buyers pay for the project’s future cash flows; every legal defect (planning, land, PPA) deducts straight from the price. Knowing the procedures and tax duties helps both sides price correctly.
Two transfer structures
One, investment-project transfer: all the investor’s rights and obligations move to the transferee — used when the project is tied to the investor entity. Two, equity/share transfer in the project company: the buyer acquires the equity stake while the company (and all its licences) stays intact — simpler, since no licence needs re-issuing.
In Vietnamese solar M&A practice, share transfers dominate because they preserve the PPA, the power operation licence and contracts — assets hard to re-obtain from scratch. The condition: the project company must be clean — no tax debts, no disputes, valid licences.
Legal procedures
For project transfers: the IRC/policy-approval authority must approve the transfer, the IRC is amended to the new investor, and related licences are handed over. For share transfers: member/shareholder change registration, plus capital-contribution registration if the buyer is foreign. Check the PPA’s change-of-control clause — many PPAs require the power buyer’s prior consent to transfers.
Realistic timelines: 3-6 months for simple deals, longer with project-transfer approvals or foreign elements needing registration.
Tax duties on transfer
The transferor declares and pays corporate income tax on transfer income (transfer price minus cost basis). Share transfers follow current CIT rules on rates and computation; project transfers trigger similar duties. Also review VAT (project transfers may involve VAT-able assets) and related-party tax duties.
Pricing note: an operating solar project’s value depends on remaining PPA term, tariff, actual output and technical condition — independent technical and financial due diligence is mandatory before price lock, not just legal DD.
This article has been quality-reviewed by the FLAW AI Legal Council.
Frequently Asked Questions
What structures transfer an operating solar project?
Two: investment-project transfer (all rights and obligations move; needs authority approval and IRC amendment) or share transfer in the project company (simpler, preserves the PPA and licences). Vietnamese M&A practice favours share transfers to avoid re-applying for licences.
Does transferring a power project need state approval?
For project transfers: yes — the IRC/policy-approval authority must approve and amend the IRC. For share transfers: member/shareholder change registration (plus contribution registration if the buyer is foreign). Also check the PPA's change-of-control clause — many require the buyer's prior consent.
What taxes apply on solar project transfers?
The transferor pays corporate income tax on transfer income (price minus cost basis). Also review VAT on transferred assets. Project value depends on remaining PPA term, tariff, actual output and technical condition — independent technical and financial DD is mandatory before price lock.