Many foreign investors are surprised to learn that buying shares in an operating Vietnamese company is not the same as applying for an Investment Registration Certificate (IRC) for a new project. The capital contribution and share purchase form works by a different mechanism: the investor becomes a member or shareholder of an existing economic organization instead of setting up a new investment project from scratch. Misunderstanding this leads to two extremes — doing redundant procedures, or skipping a mandatory capital contribution registration.
This article clarifies when a capital contribution or share purchase needs no IRC, when a registration of capital contribution or share purchase with the investment registration authority is still required, and why in some deals obtaining an IRC for a project is a strategic choice rather than an obligation.
Legal basis: the capital contribution and share purchase form
The Law on Investment No. 143/2025/QH15 lists the forms of investment in Vietnam, including contributing capital, buying shares or buying capital contribution portions in an operating economic organization. Unlike establishing a new economic organization tied to an investment project, this form in principle does not trigger IRC issuance for a new project, because no new investment project is created; the investment relationship is expressed through the investor’s membership or shareholding in the existing organization.
However, Decree No. 96/2026/ND-CP and the 2025 Law on Investment establish a registration mechanism for capital contributions and share purchases in sensitive cases: transactions increasing a foreign investor’s ownership in an organization operating a sector with market access conditions, transactions bringing the foreign investor to a prescribed control threshold, or where the organization holds land use rights in special areas related to national defence and security such as islands and border or coastal communes. These cases must be registered and approved before the ownership change takes effect.
Identifying the right procedure for your transaction
Step 1: Classify your transaction
Answer three questions: does the target operate in a sector where foreign investors face market access conditions; will the foreign ownership ratio increase or reach a control threshold after the deal; and does the target hold land use rights in a special area? A single yes means the transaction very likely requires prior capital contribution registration. If all three answers are no, the deal usually only needs enterprise registration changes and internal corporate procedures.
Step 2: Register the contribution with the investment registration authority (when required)
The investor files the capital contribution or share purchase registration with the investment registration authority where the target is headquartered. The file shows the investor’s information, the target, the intended post-deal ownership ratio and the target’s business lines. Only after the authority issues its approval do the parties proceed to change the enterprise registration to record the foreign investor as member or shareholder.
Step 3: Change the enterprise registration and complete the deal
After the contribution registration approval (for covered cases) or from the outset (for non-covered cases), the target changes its enterprise registration contents under Decree No. 168/2025/ND-CP on enterprise registration: members, shareholders and charter capital if capital increases. In parallel, the parties complete payment through the investment capital account under foreign exchange rules for investment activities.
Step 4: Consider a project and an IRC when expansion is planned
If after the acquisition the investor plans to implement a specific investment project — building a new plant or opening a production facility at a new location — that project is a separate investment project requiring its own investment procedures, including IRC issuance where applicable. Shareholding in the existing company does not automatically cover new projects the company implements later.
| Case | IRC needed? | Main procedure |
|---|---|---|
| Share purchase, no sensitive factor | No | Enterprise registration change |
| Deal raising ownership in a market-access-conditioned sector | No, but contribution registration required | Contribution approval, then enterprise registration change |
| New project after the acquisition | Possibly, for the new project | IRC procedure for that project |
Common misconceptions in capital contribution deals
Assuming every share purchase needs an IRC
This belief stretches many deals unnecessarily by sending them down the wrong procedural path. An IRC attaches to an investment project; buying shares in an operating organization creates no new project, so there is no IRC to apply for. What must be checked is the capital contribution registration duty, not the IRC procedure.
Skipping registration because the purchased stake is small
A small stake does not automatically exempt registration. The deciding factors are whether the deal increases foreign ownership in an organization operating a market-access-conditioned sector, or falls into other prescribed cases. Skipping registration stalls the later enterprise registration change, and the ownership change risks not being recognized.
Believing the target’s existing IRC covers every plan
Some target organizations already hold an IRC for their own existing project. That IRC belongs to that specific registered project; it is not a general licence for every future activity of the new shareholder. When the company implements a new project at a different location with different objectives, that project needs its own investment procedure assessment.
In a capital contribution or share purchase transaction, procedural time does not stand alone: it is bound tightly to the closing date agreed with the seller and the conditions precedent in the purchase agreement. If the registration step with the authority runs longer than expected, the parties may have to extend the transaction documents, renegotiate points already settled, or accept the risk that the seller changes its mind. The transaction timetable should therefore leave a realistic margin for the registration procedure, and the closing-date clause should be drafted with a fallback option instead of one single rigid date.
Capital contribution and share purchase is the field where experience from earlier transactions is most likely to mislead, because market-access conditions by sector are adjusted fairly frequently. A transaction structure accepted for a deal several years ago may no longer fit once the list of conditional sectors or the guiding instruments have changed. Before settling the deal structure, review the conditions currently applying to the exact target sector at the present moment, based on the instruments in force rather than on precedents from older transactions.
In short, contributing capital or buying shares in an operating economic organization in principle requires no IRC, but certain transactions must be registered and approved before the ownership change takes effect. The correct sequence is to classify the deal by the three questions on sectors, ownership ratio and special-area land, then choose the procedural path. If a new project is planned after the deal, separate it out and run its own IRC procedure where needed.
Frequently Asked Questions
I only contribute capital to buy shares in a Vietnamese company. Must I apply for an IRC?
In principle, no. Contributing capital or buying shares in an operating economic organization does not create a new investment project, so no IRC application arises. Instead, you must check whether the transaction falls into the cases requiring registration of capital contribution or share purchase with the investment registration authority; if it does, that registration must be approved before the enterprise registration is changed to record your shareholder status.
In which cases must a capital contribution still go through investment registration?
Typical cases include: a transaction increasing the foreign investor’s ownership in an organization operating a sector with market access conditions for foreign investors; a transaction bringing the foreign side to a controlling ownership threshold as prescribed; and an organization holding land use rights on islands, in border or coastal communes or other areas affecting national defence and security. In these cases the registration must be completed before the transaction.
Where is the capital contribution registration done if no IRC is needed?
The capital contribution and share purchase registration is done at the investment registration authority where the target economic organization has its head office. After the registration is approved, the target proceeds to change its enterprise registration with the business registration authority to record the new member or shareholder and any capital changes. The two steps follow each other in that order and should not be reversed.
This article has been quality-reviewed by the FLAW AI Legal Council
