A foreign technology group entering Vietnam holds its most valuable asset outside any vault: the technology stack, production know-how and software already running stably in three other plants. They want to contribute that very technology as charter capital — and want it recognised at a high value, because the value determines their ownership ratio in the joint venture. The Vietnamese side worries about two opposite things: too high a value dilutes them unfairly, and if one day the tax authority calls the value inflated, who stands up to bear it? Vietnamese law has its own valuation and liability mechanism for non-cash capital contributions, and from 1 April 2026 the amended Technology Transfer Law rewrote Article 8 on contributing technology as capital. This article sets out who appraises the technology’s value, what the two involved state authorities actually “accept”, and how the price of valuing above real worth is computed.
Who appraises the technology: the Article 36 mechanism and Article 8 conditions of the Technology Transfer Law
Under Article 36 of Enterprise Law No. 59/2020/QH14, non-cash assets contributed at establishment must be valued by the founding members or shareholders themselves by unanimous principle, or by a professional valuation organisation; where a valuation organisation is used, its value is accepted when a majority of founding members or shareholders agrees. For technology specifically, Article 8 of Technology Transfer Law No. 07/2017/QH14 — amended by Law No. 115/2025/QH15, effective from 1 April 2026 — sets the foundation condition: only the lawful owner of the technology (or a lawful use-right holder within the permitted scope) may contribute that technology as capital; and specifically where the project uses State capital, the contributed technology must undergo price appraisal under pricing law and have its ownership or lawful use rights confirmed before the contribution is made. The key point many investors misunderstand: the business registration authority does not appraise technology value. The registration file records charter capital according to the parties’ declaration and valuation minutes; being “accepted for registration” means only that the file is formally valid — it is not a state ruling that the technology is worth that much, and it does not shield the parties from later review mechanisms.
The price of a high valuation: joint liability for the gap and the tax authority’s reassessment power
Article 36 of the Enterprise Law attaches a very specific liability hook to high valuation: if a contributed asset is valued above its actual value at the time of contribution, the founding members and shareholders bear joint liability corresponding to the gap for the company’s debts and losses connected with that valuation. In other words, the system does not prohibit high valuation — it reprices the risk: the “virtual” capital above real value becomes an implicit joint undertaking of the founders, surfacing only when the company cannot pay or a dispute arises over actually contributed capital. On the tax side, the tax authority has no “reject the contributed value” procedure at registration time, but holds full post-review tools: a technology contribution between related parties sits within the transfer pricing frame (Decree No. 255/2026/ND-CP), and the substance-over-form principle under Tax Administration Law No. 108/2025/QH15 allows the authority to reassess where the declared value does not match market value. The most practical tax consequence lies not in the contribution act itself but in later years: the company records a large intangible asset and depreciates or allocates costs on that value — if the value is reassessed downward, the corresponding expense portion is disallowed, pulling corporate income tax arrears and late payment interest with it. As for “who bears it if the technology becomes obsolete later”: once the contribution completes and ownership of the technology has transferred to the company (Article 35 of the Enterprise Law), obsolescence is a business risk of the company itself, borne by all shareholders pro rata — the contributor does not warrant the technology’s future value unless the parties write such an undertaking separately into the contribution agreement; what the contributor must always warrant is lawful rights over the technology at the contribution date and the honesty of the valuation at that time.
Contributing high-value technology: five protection layers for both sides
- Use an independent professional valuation organisation rather than the parties’ own unanimity — the first buffer before every later review.
- Establish lawful rights over the technology before contributing (ownership or use rights, the IP paper chain) under Article 8 of the Technology Transfer Law as amended in 2026.
- Record the full valuation file in the minutes: method, revenue assumptions, comparable assets — this file is the evidence on reassessment.
- In the contribution agreement: the contributor’s warranties of lawful rights and non-infringement, plus a mechanism if the valuation is adjusted down by an authority.
- Do not forget the flip side: the depreciation and allocation policy on the intangible asset must stay consistent with the valuation file to avoid self-contradiction at finalisation.
Frequently Asked Questions
Technology valued at many times its worth — who appraises it?
Under Article 36 of the 2020 Enterprise Law, assets contributed at establishment are valued by the founding members or shareholders themselves by unanimity, or by a professional valuation organisation (whose value applies when a majority of founders accepts it). The State does not send an appraiser for a private enterprise; specifically for projects using State capital, Article 8 of the Technology Transfer Law (amended by Law No. 115/2025, effective 1 April 2026) makes price appraisal under pricing law and confirmation of ownership or lawful use rights mandatory before contribution. For a technology valued at many times over, the choice protecting the parties is to engage an independent valuation organisation and keep a complete method file.
Can the tax authority reject the contributed value?
There is no rejection procedure at registration — the business registration authority records charter capital per the parties’ declaration and valuation minutes, and the tax authority plays no part in that step. But the tax authority holds full post-review powers: transactions between related parties fall under the transfer pricing frame of Decree No. 255/2026/ND-CP and the substance principle of Tax Administration Law No. 108/2025, so at finalisation the authority may reassess the value where it does not match market value. The consequence usually lands in later years — depreciation or allocation expense on the portion deemed inflated is disallowed, producing tax arrears and late payment interest — rather than on the contribution day itself.
If the contributed technology later becomes obsolete, who bears it?
Once the contribution completes and ownership of the technology has transferred to the company under Article 35 of the Enterprise Law, the technology is the company’s asset; its obsolescence, loss of value or replacement by a newer technology is a business risk borne by all shareholders in proportion to ownership — the contributor does not automatically have to compensate or withdraw capital for that reason. Two exceptions must be written separately into the contribution agreement if wanted: the contributor’s warranty of lawful rights over the technology and of non-infringement of third-party rights (a warranty of legal status at the contribution date), and any ratio adjustment mechanism if the technology loses value — the law does not create these mechanisms itself. Conversely, if the value was inflated right at the contribution date, Article 36 places joint liability for the gap on the founding members and shareholders.
How does contributing technology as capital differ from licensing it to the company?
In asset nature and in the contributor’s position. A capital contribution transfers ownership of the technology (or use rights within the valued scope) into the company’s assets, and in exchange the contributor receives charter capital — that is, an ownership ratio, voting rights and risk following business results; the contributed value is locked into charter capital under the Article 36 liability mechanism. A licence keeps ownership with the licensor, the company holds only contractual use rights, and the licensor receives periodic royalties — a cost of the company, but subject to the transfer pricing frame and to contractor tax if paid abroad. Many groups choose licensing over contribution precisely to keep technology ownership at the parent and avoid locking the technology’s value into a charter capital valuation that is hard to adjust later.
This article has been quality-reviewed by the FLAW AI Legal Council