Shares in an unlisted joint stock company are designed to be freely transferable — no exchange, no intermediary, and in principle nobody’s “permission”. But “freely transferable” does not mean “transferred when the parties shake hands”: the transfer’s effectiveness turns on one very specific event, the buyer’s entry into the company’s shareholder register, and on the way to that event there are still control gates — the charter, the founders’ three-year restriction, and the approval regime where the buyer is a foreign investor in a conditioned line. This article walks the procedure in the correct order.
1. The free transferability principle and the exceptions to check first
Article 127 of the Law on Enterprises 59/2020/QH14 sets the principle: shares are freely transferable, save two statutory exceptions — voting preference shares (non-transferable, under Article 119(3)) and cases where securities law provides otherwise for listed/registered shares (not applicable here, the company being unlisted). Before negotiating any deal, the seller must check three restriction layers over their own shares: the statutory layer — whether the share class is restricted; the founder layer — under Article 119(2), during the 03 years from the Enterprise Registration Certificate date, founding shareholders’ ordinary shares are freely transferable only among founding shareholders; transfers to non-founders require General Meeting approval; and the charter layer — many unlisted companies’ charters (especially joint-venture-flavoured ones) add restrictions such as existing shareholders’ pre-emptive rights or Board consent. A deal skipping any of the three layers risks being declared ineffective against the company.
2. The procedure: from the agreement to the shareholder register
Step 1 — Check the charter and lock the deal: review the charter, the shareholder register and any shareholders’ agreements for transfer restrictions, pre-emption, and tag-along/drag-along rights if any. Step 2 — Share transfer agreement: a written agreement between seller and buyer stating the number and class of shares, the price, the payment schedule, and conditions precedent (General Meeting approval for a founder selling outside in the first 3 years; investment registration authority approval of the share acquisition where the buyer is a foreign investor in the conditioned category — see section 4). The law does not require notarisation of a share transfer agreement — notarisation is a voluntary choice to strengthen evidence, not a validity condition. Step 3 — Payment: the price is paid per the agreement; where a party is a foreign investor, payment must move through that investor’s ICA under Circular 38/2026/TT-NHNN. Step 4 — Entry in the shareholder register: the step that creates effectiveness against the company — under Articles 122 and 127 of the Law on Enterprises, the transferee becomes a shareholder with full shareholder rights only from the moment their information is recorded in the company’s shareholder register. The company must make the entry promptly upon a valid shareholder request. Step 5 — Knock-on procedures: the company registers the change of foreign-investor shareholders (if any) with the business registration authority and amends the Investment Registration Certificate correspondingly; the seller’s capital transfer income tax is declared/withheld under the seller’s own regime — individual shareholder, domestic organisation, or foreign investor each has its own mechanism.
3. When is a transfer legally complete?
There are three different “completion moments” often conflated into one. Between seller and buyer: the agreement takes effect as the parties agree (usually on signing or when conditions precedent are satisfied) — the rights to the money and to delivery of the shares arise here. Against the company: the transfer is recognised by the company and other shareholders only when the buyer is entered in the shareholder register — before that moment, the company still treats the seller as the shareholder for everything: meeting notices, dividend payments, voting. Against state authorities: for ordinary domestic shareholders there is no separate state registration for share transfers in an unlisted company (a joint stock company does not register its ordinary shareholder list the way an LLC registers members); only where the buyer is a foreign investor changing the company’s foreign-investor status does a foreign-shareholder change registration and investment certificate amendment arise. The practical consequence: the buyer must push for register entry immediately after payment, because the gap between “paid” and “entered” is a risk gap — in that window dividends may be paid to the seller and meeting notices still go to the seller.
4. A foreign buyer: the additional procedural layers
A foreign investor buying shares in an unlisted company passes up to three additional layers compared with a domestic buyer. Layer 1 — Share acquisition approval: under the Law on Investment 143/2025/QH15, a foreign investor acquiring shares in an economic organisation operating in a market-access-conditioned line for foreign investors must register and obtain the investment registration authority’s approval before the company changes shareholders; the acquisition must also not push foreign ownership beyond that line’s cap. Outside conditioned lines, a foreign investor’s purchase of unlisted shares follows the ordinary mechanism with no prior approval. Layer 2 — Sector ownership caps: each conditioned sector (banking, insurance, logistics, telecommunications…) has its own foreign ownership cap; a cap-breaching deal cannot be validly entered in the register even if the agreement is signed. Layer 3 — Money channel and documents: payment via the ICA, the seller’s capital transfer tax documents (with its own withholding mechanism where the seller is also a foreign investor), and post-deal amendment of the investment certificate if the company is foreign-invested. These three layers do not change the free-transferability principle — they are compliance gates on the path of the money and the documents, and skipping any gate leaves the deal suspended at the bank or the investment registration authority despite a signed agreement.
What procedures are needed to sell shares in an unlisted company?
In sequence: (1) check the charter, the shareholder register and shareholders’ agreements for transfer restrictions/pre-emption; (2) sign a written share transfer agreement; (3) obtain necessary approvals (General Meeting approval where a founding shareholder sells outside in the first 3 years under Article 119(2) of the Law on Enterprises 59/2020/QH14; investment authority approval of the share acquisition where the buyer is a foreign investor in the conditioned category); (4) pay, via the ICA where a foreign element exists (Circular 38/2026/TT-NHNN); (5) the company enters the buyer in the shareholder register — from that moment the buyer is formally a shareholder (Articles 122, 127).
Must a share transfer agreement be notarised?
No. Vietnamese law does not require notarisation of a share transfer agreement in an unlisted joint stock company; an agreement drawn up in writing and validly signed already binds the parties. Notarisation is a voluntary choice to strengthen the agreement’s evidentiary value in a dispute, or adopted by the parties themselves as a contractual condition. What determines the buyer being recognised as a shareholder by the company is entry in the shareholder register, not a notary stamp.
What additional procedures apply when the buyer is a foreigner?
Up to three additional layers: (1) investment registration authority approval of the share acquisition before the shareholder change, if the target operates in a market-access-conditioned line for foreign investors (Law on Investment 143/2025/QH15); (2) checking that sector’s foreign ownership cap — a cap-breaching deal cannot be executed; (3) payment through the ICA and, after the deal, registration of the foreign shareholder change and amendment of the Investment Registration Certificate. Outside conditioned lines, the procedure is essentially the same as for a domestic buyer.
When is a share transfer considered legally complete?
There are three different moments: the agreement takes effect between seller and buyer as agreed (usually on signing or when conditions precedent are satisfied); against the company and other shareholders, the transfer completes only when the buyer’s information is recorded in the company’s shareholder register — from that moment the buyer holds full shareholder rights under Articles 122 and 127 of the Law on Enterprises 2020; against state authorities, only a foreign buyer triggers a foreign-shareholder change registration and investment certificate amendment.