An IPO is not itself a taxable event: issuing new shares raises capital, not income. The tax and legal weight of an offering sits with shareholders who sell into it, with the three-year transfer lock on founders’ shares, and with the compliance costs of life as a public company.
Listing conditions decide who may sell, and how much
A first public offering of shares must satisfy Article 15 of the Securities Law 54/2019/QH14: paid-up charter capital of at least VND 30 billion at registration, a profitable preceding year, no accumulated losses, and a use-of-proceeds plan approved by the general meeting of shareholders. In parallel, Article 120 of the Enterprise Law 59/2020/QH14 locks founding shareholders for the first three years: their ordinary shares move freely only among founders, and a sale to an outsider needs shareholder-meeting approval — a clause that regularly breaks an institutional investor’s early-exit plan when nobody checked it at entry.
Who actually pays tax in an IPO
The newly issued tranche raises no tax, because the company receives capital rather than income. Tax arises when existing shareholders sell their own shares into the offering or after listing: individuals pay personal income tax of 0.1% of the securities transfer price per transaction under the Personal Income Tax Law 109/2025/QH15, whether they gain or lose; foreign organisations selling through the exchange are handled under the contractor-tax mechanism for securities trades. Share premium from the issuance is likewise not taxable income of the company, although not every IPO cost is deductible for corporate income tax.
Three points to settle before filing the offering registration
- Cross-check the incorporation date and shareholder register to identify which founders’ shares remain inside the three-year lock.
- Split the offering structure into the new-issue tranche and the shareholder sell-down tranche, because their tax treatments diverge completely.
- Budget IPO costs by deductible and non-deductible groups for CIT so the listing-year finalisation holds no surprises.
Frequently Asked Questions
Is an IPO in Vietnam taxed?
The issuance of new shares to the public creates no tax for the company, since it raises capital rather than income. Tax falls only on shareholders selling their own shares: individuals pay 0.1% of the securities transfer price, organisations are taxed under the corresponding income-tax mechanism.
What about founding shareholders?
For the first three years from the enterprise registration certificate, founding shareholders may transfer ordinary shares freely only to other founders; a transfer to an outsider requires general-meeting approval under Article 120 of the Enterprise Law 59/2020/QH14.
What transfer restrictions apply?
Beyond the founders’ three-year lock, major shareholders and insiders after listing face disclosure duties and trading restrictions under the Securities Law; shares placed privately before the IPO are also commonly locked by investor undertakings and private-placement rules.
How are IPO costs treated?
Offering costs cover advisory, audit, valuation and listing fees. Costs directly serving the capital increase are generally not deductible expenses of the company; post-listing compliance costs are treated as ordinary operating expenses when properly documented.
This article has been quality-reviewed by the FLAW AI Legal Council