M&A of Real Estate Projects in Vietnam: 15-Step Legal Land Due Diligence

M&A of Real Estate Projects in Vietnam: 15-Step Legal Land Due Diligence When Buying the Company That Owns the Project

In real estate M&A transactions in Vietnam, there are two completely different paths: buying the project directly (asset deal) and buying the company that owns the project (share deal). The second path — transferring shares or capital contributions in the target company — is favoured by many investors because it avoids the project transfer procedure, avoids re-applying for investment policy approval, and preserves the project's entire legal history. But in exchange, the buyer inherits the whole company: assets as well as debts, disputes, tax liabilities and every legal risk attached to the land the company carries.

That is why legal due diligence in a real estate share deal is not merely "checking the land certificate". It is a 15-step process, running from the target company's legal standing, through each layer of land legality — certificates, land origin, planning, financial obligations, progress, disputes — to the contractual protections for the buyer in the capital transfer agreement. This article presents all 15 steps, based on the Land Law 2024 (31/2024/QH15), the Housing Law 2023 (27/2023/QH15), the Law on Real Estate Business 2023 (29/2023/QH15) and the Investment Law 2025 (143/2025/QH15), all in force as of September 2026.

A note on scope: this article approaches the subject from the M&A angle — buying the company that owns the project. Buying a project directly from the investor (transfer of the whole or part of a project under Articles 39–42 of the Law on Real Estate Business 2023, requiring a transfer permission decision from the competent state authority) is covered separately in the dedicated due diligence checklist for buying a real estate project (25 items, asset-deal angle).

How buying the company that owns a project differs from buying the project directly

Before going through the 15 steps, it is essential to grasp the core difference between the two deal structures, because it determines the entire logic of the diligence exercise:

In other words: the share deal is faster and simpler procedurally, but demands a much deeper diligence exercise — because the buyer is not only buying the project, but the entire "past" of the company holding it. The 15 steps below are designed precisely for this logic.

Group A — Diligencing the entity and the deal conditions

Step 1. Verify the target company's legal standing

Every diligence exercise starts with the simplest question: does the target company legally exist, who really owns it, and who has authority to sign the capital transfer agreement? Dossiers to collect: the Enterprise Registration Certificate (latest version), the company charter, the shareholder or member register, the list of legal representatives, and resolutions of the General Meeting of Shareholders / Members' Council relating to the project.

Points to scrutinise: whether charter capital has been fully contributed (fictitious capital is a common red flag in real estate project companies); whether founding shareholders' ordinary shares are still within the 3-year transfer restriction period; whether the company is suspended, dissolved, bankrupt or has had its Enterprise Registration Certificate revoked. Legal basis: the Enterprise Law 2020 and Decree 168/2025/ND-CP on enterprise registration.

Step 2. Review the ownership chain and the history of capital transfers

Real estate projects often change hands multiple times through capital transfers. Each "link" in the ownership chain may hide a defect: a past transfer never registered as a change of enterprise registration content, an abnormal transfer price (a sign of related-party transactions or asset stripping), a shareholders' agreement with pre-emptive rights, tag-along or drag-along clauses that could block the current transaction.

Require the seller to provide all past capital transfer contracts, meeting minutes and resolutions approving each round, and the shareholders' agreement currently in force. Red flags: shares that are frozen, pledged, or the subject of a dispute before a court or arbitral tribunal — because then the very "merchandise" of the share deal is not clean.

Step 3. Check the conditions applicable where the buyer is a foreign investor

If the buyer (or the post-closing holder) has a foreign element, this step is mandatory and must be done before signing the transfer agreement, because breaching the conditions can render the transaction administratively void. The Investment Law 2025 (143/2025/QH15, effective 01/03/2026), Article 21, provides that a foreign investor's capital contribution or purchase of shares/stakes must satisfy three conditions: market access conditions (Article 8), national defense and security safeguards, and the land law's conditions on receiving land use rights on islands and in border and coastal areas.

In particular, a foreign investor must complete the registration of the capital contribution or share/stake purchase before the change of members or shareholders in one of three cases: the purchase increases the foreign ownership ratio in a conditional market-access sector; it results in the foreign investor holding over 50% of charter capital; or the target company holds a land use right certificate on islands, in border or coastal areas, or in areas affecting national defense and security. Note: investment by way of capital contribution or share purchase is not subject to Investment Registration Certificate issuance (Article 26 of the Investment Law 2025) — but the M&A registration procedure above remains mandatory in these cases. For coastal real estate projects or projects in economic zones, falling into the third case is highly likely. For details on when approval is required and where to carry out the procedure, see our dedicated guide on M&A approval for foreign investors.

Group B — Legal land due diligence (the backbone of the deal)

Step 4. Check the land use right certificate

The certificate (the "red book"/"pink book") is the central document for every subsequent step. Contents to cross-check: land category (residential land, commercial/service land, production/business land…), the remaining land use term in years, the land use form (allocated by the State with land use levy, allocated without levy, or leased with one-off/annual payment), and notes on financial obligations and mortgages on the supplementary pages.

Cross-check the certificate against the cadastral dossier at the Land Registration Office: area, boundaries, any overlap. Major red flag: the land category on the book does not match the project's purpose (e.g. a housing project on land still recorded as agricultural land not yet converted), or the remaining land use term is too short for the project's life cycle.

Step 5. Trace the origin of the project's land bank

Where the project's land came from determines the legal sustainability of the entire deal. Common lawful origins: State allocation/lease through land use right auction; allocation/lease through investor selection bidding; or the enterprise's own agreed receipt of transferred land use rights from other land users.

For commercial housing projects, pay special attention: under the Housing Law 2023, a commercial housing project may only be implemented on residential land, or on residential land combined with other land. Where a project formed on agricultural land or non-agricultural non-residential land relies on the pilot mechanism under Resolution 171/2024/QH15 (effective 01/04/2025, 5-year pilot until 31/3/2030, guided by Decree 75/2025/ND-CP), verify: whether the project is on the list approved by the competent authority for the pilot, and what happens to the project's legality when the pilot period ends. This is a point many buyers miss because they only look at the current approval document.

Step 6. Cross-check planning at every level

A project with a clean certificate can still "die" on planning. Dossiers to check: provincial/city land use planning, zoning plans, and in particular the approved detailed 1/500 plan — which is also one of the mandatory conditions if the project is later to be transferred under Article 40 of the Law on Real Estate Business 2023. Cross-check planning indicators (construction density, building height, floor area ratio, function) against the actual design and the investor's sales commitments.

Red flags: the project is being implemented while the detailed plan is not yet approved or is being adjusted; the project land sits inside a planned road, park or public work (a "suspended" plan). Obtain a written planning-information document from the planning authority — the seller's verbal assurances carry no weight in due diligence.

Step 7. Verify that land-related financial obligations are fulfilled

Have the land use levy, land rent, taxes, fees and charges relating to the project's land been fully paid? Require: the land use levy/rent payment notices, payment receipts, and the tax authority's written confirmation of fulfilled financial obligations. This is not just about money — the law attaches a direct consequence: land users who fail to perform financial obligations to the State fall within the cases of land recovery (Article 81 of the Land Law 2024).

In M&A practice, this is the most common "hidden debt": land use levy reassessed under a new land price table, or land allocated long ago but never fully paid due to disputes over the calculation method. The buyer should make confirmation of fulfilled land financial obligations a condition precedent of the transaction (see Step 15).

Step 8. Check that the land use right is "clean": disputes, seizure, mortgages

Article 45 of the Land Law 2024 sets five conditions for a land user to exercise rights (transfer, mortgage, capital contribution…): holding the certificate; the land is dispute-free or disputes have been resolved; the land use right is not seized for judgment enforcement; the land is within its use term; and no provisional urgent measure is applied (new compared with the Land Law 2013). In a share deal, although the certificate is not re-registered, these five conditions remain the yardstick of the core asset's "health".

Diligence actions: search at the Secured Transaction Registration Centre (is the land use right or attached assets mortgaged to a bank, what is the outstanding debt, is there any security enforcement agreement affecting the project); search at the civil judgment enforcement authority (any seizure or freezing decisions); review at courts at all levels (any pending land disputes or project-related contract disputes). Bank loans secured by the project's land use right itself are a common structure — the buyer must know the exact outstanding debt and the conditions for releasing the security before money changes hands.

Step 9. Assess project progress and the risk of land recovery

This is a "life-or-death" step that many diligence exercises treat superficially. Article 81 of the Land Law 2024 provides: land allocated or leased for an investment project that is not put into use for 12 consecutive months from on-site handover, or whose land use is 24 months behind the schedule stated in the investment project, may be extended once for no more than 24 months with additional land use levy/rent payable for the extension period; after the extension expires without the land being put into use, the State recovers the land without compensation for the land, assets attached to the land and remaining investment costs in the land. Force majeure cases are excluded.

Cross-check actual progress (site minutes, photos, supervision reports) against the committed schedule in the investment policy approval document. If the project is already behind schedule, clarify: has an extension been granted, how much time remains, what is the additional amount payable — because after closing, this clock keeps ticking and the buyer bears the consequences.

Step 10. Review special factors: land on islands, in border/coastal areas, and the land use form of foreign-invested enterprises

Two issues often travel together in deals with a foreign buyer. First, as noted in Step 3, if the target company holds a land use right certificate on islands, in border or coastal areas, or in areas affecting national defense and security, the capital contribution or share purchase transaction must be registered under Article 21 of the Investment Law 2025.

Second, check the compatibility of the land use form after the company becomes a foreign-invested enterprise. Under Article 28 of the Land Law 2024, foreign-invested economic organisations may receive land use rights only through certain forms: transfer receipt in industrial parks, industrial clusters and high-tech zones; receipt of transferred investment capital being the value of land use rights; receipt of capital contribution in the form of land use rights; State allocation of land for investment projects building houses for sale or for sale combined with lease; and State lease of land. If the target company is using land under a form not accessible to foreign-invested enterprises, the buyer must factor in a conversion of the land use form — with its costs and procedures — in the deal pricing from the start.

Group C — Project and business legal due diligence

Step 11. Check the investment policy approval and the investor status

Real estate projects are subject to investment policy approval. Required dossiers: the investment policy approval document (or simultaneous approval of policy and investor, recognition of investor — depending on project type and timing), stating the objectives, scale, location, implementation schedule and the approved investor. Cross-check the investor named in the document against the target company: there are cases where a project was approved for one legal entity and later "moved" to the target company through internal transactions without adjustment procedures — a serious defect.

Where a share deal leads to a change of the project's investor (the buyer taking control), adjustment procedures under investment law are in principle required. The buyer should identify in advance the competent authority and the dossier to prepare, avoiding the situation of signing the contract only to discover that investor status must be "re-applied for".

Step 12. Verify the target company's real estate business conditions

Article 9 of the Law on Real Estate Business 2023 sets very specific capital conditions: an enterprise doing real estate business through projects must have owner's equity of not less than 20% of total investment for projects using under 20 hectares of land, and not less than 15% for projects of 20 hectares or more; and must ensure the ability to mobilise capital for the project. Where an enterprise implements multiple projects simultaneously, owner's equity must be allocated to satisfy the above ratio for each project.

Check the latest audited financial statements: what is the actual owner's equity, does it meet the 20%/15% ratio? Many project companies have thin owner's equity, relying entirely on loans and customer prepayments — this not only breaches the business conditions but is a direct financial risk indicator for the buyer. Also check that the real estate business line is registered on the Enterprise Registration Certificate, and that the company is not banned, suspended or temporarily shut down from real estate business.

Step 13. Review contracts signed with customers and the sales conditions

If the project has launched sales, the buyer inherits all obligations to customers: on-time handover, quality, warranty, issuance of certificates to buyers. Review the signed sale and purchase templates, deposit contracts and lease-purchase contracts: penalty clauses, handover conditions, amenity commitments.

On payment collection principles, the Law on Real Estate Business 2023 tightens the rules: the investor may only collect deposits of no more than 5% of the selling price once the houses or construction works satisfy the conditions for being put into business; payments must follow construction progress with stage caps (first payment, before handover, before certificate issuance). Cross-check actual cash collected from customers against actual construction progress: collecting money ahead of progress is a red flag — both a legal breach and an obligation to refund/penalise that the buyer will carry.

Group D — Full succession and buyer protections

Step 14. Comprehensively assess inherited obligations: tax, labour, disputes

This is the biggest difference between a share deal and an asset deal, and also the step buyers most often underestimate. When buying a company, the buyer inherits all of the legal entity's obligations: tax debts (corporate income tax, VAT, outstanding land rent), bank loans and guarantees, labour disputes, lawsuits pending before courts or arbitral tribunals, and unexecuted administrative sanction decisions.

By contrast, in an asset deal (buying the project directly), the transferee only inherits the transferor's rights and obligations with respect to the project under Article 39 of the Law on Real Estate Business 2023 — a much narrower scope. Due diligence for a share deal must therefore extend to tax, labour and dispute diligence of the whole company, with independent auditors involved. A practical rule of thumb: assume every "hard-to-understand" item in a real estate project company's financial statements needs clarification before final pricing.

Step 15. Design buyer protections in the capital transfer agreement

The findings of the 14 steps above must be "locked in" contractually. Indispensable protection mechanisms in a real estate share deal:

• Representations & warranties by the seller on land legality: valid certificate, no disputes, no seizure, land financial obligations fulfilled, project progress as committed, no undisclosed contingent liabilities.
• Conditions precedent: completion of the capital contribution/share purchase registration under Article 21 of the Investment Law 2025 (if there is a foreign element); written confirmation of fulfilled land financial obligations; release or restructuring of mortgages affecting the project.
• Retention/price adjustment mechanisms (escrow, holdback, price adjustment): retaining part of the transfer price in a blocked account to handle post-closing obligations (tax arrears, late-progress penalties, customer disputes).
• Indemnity for losses arising from breaches of representations and warranties, with a claim period long enough to cover tax inspection cycles and the project schedule.

Red-flag summary: when to pause and renegotiate

Frequently asked questions

1. How does buying the company that owns a project (share deal) differ from buying the project directly (asset deal)?

In a share deal, the buyer acquires shares or capital contributions in the target company: no project transfer procedure, no re-application for investment policy approval, and the project's legal history is preserved — but the buyer inherits the entire company, including bank debts, tax liabilities, disputes and labour contracts. In an asset deal (transfer of the whole or part of a project under Articles 39–42 of the Law on Real Estate Business 2023), the transferee only inherits the transferor's rights and obligations with respect to the project — a narrower scope — but a decision permitting the project transfer from the competent state authority is mandatory.

2. Must a foreign investor register its purchase of shares in a Vietnamese real estate project company?

Yes, in the cases prescribed by the Investment Law 2025 (143/2025/QH15, effective 01/03/2026), Article 21: when the purchase increases the foreign ownership ratio in a conditional market-access sector; when it results in the foreign investor holding over 50% of charter capital; or when the target holds a land use right certificate on islands, in border or coastal areas, or areas affecting national defense and security. Registration must be completed before the change of members or shareholders.

3. Can the State recover the project's land if the project falls behind schedule?

Yes. Under Article 81 of the Land Law 2024 (31/2024/QH15), land allocated or leased for an investment project that is not put into use for 12 consecutive months from on-site handover, or whose land use is 24 months behind the schedule in the investment project, may be extended once for no more than 24 months with additional land use levy/rent payable for the extension period; if the land is still not put into use after the extension, the State recovers it without compensation for the land, assets attached to the land and remaining investment costs in the land. Force majeure cases are excluded.

4. Which land-related financial obligations must be verified during due diligence?

Land use levy, land rent, and related taxes, fees and charges: request the payment notices, receipts and the tax authority's written confirmation of fulfilled financial obligations. This is not only about money — failure to perform financial obligations to the State is a ground for land recovery under Article 81 of the Land Law 2024. Unpaid land use levy reassessed under a new land price table is the most common "hidden debt" in M&A practice.

5. What owner's equity ratio must the target real estate company satisfy?

Article 9 of the Law on Real Estate Business 2023 (29/2023/QH15) requires an enterprise doing real estate business through projects to have owner's equity of not less than 20% of total investment for projects using under 20 hectares of land, and not less than 15% for projects of 20 hectares or more, while ensuring the ability to mobilise capital for the project. Where an enterprise implements multiple projects simultaneously, owner's equity must be allocated to satisfy the ratio for each project.

Conclusion

M&A of real estate projects through buying the company that owns the project is the procedurally fast path, but it demands a legal land due diligence exercise far deeper and wider than buying the project directly. The 15 steps above form a closed inspection framework: from the transaction entity, through each layer of land legality, to project legality and finally the buyer protection clauses. Missing any single step, the buyer may pay with the deal's own value — from retroactively assessed land use levy, to a project recovered for slow progress, to a transaction stalled over foreign-investor conditions.

Each project has its own legal "health record", and no checklist can replace direct diligence on each target's original dossiers. If you are considering a real estate project M&A transaction — as buyer or seller — FLAT LAW FIRM's lawyers can accompany you from the 15-step diligence, through clause negotiation, to completion of the transfer procedures. Contact hotline 0988424851 for advice on your specific deal.

For the bigger picture — from negotiation and signing to post-merger integration — see also our complete guide to M&A transactions in Vietnam from A to Z.

REVIEW VERDICT (EN) — INDEPENDENT REVIEWER — 29/09/2026 15:40 +07

VERDICT: PASS (after 4 fixes applied by reviewer — see below; file re-read after fixes)

Scope: full read of en.md (frontmatter + body), adversarial check against vi.md (T-141, re-verified PASS 29/09).

A. Dedup: N/A at translation round (topic-level dedup cleared in VI rounds).

B. Legal fidelity vs VI — PASS. All statutory references preserved with correct numbers: Land Law 31/2024/QH15 Arts. 81/45/28; Law on Real Estate Business 29/2023/QH15 Arts. 39–42/9 (20%/15% equity, ≤5% deposit); Housing Law 27/2023/QH15; Resolution 171/2024/QH15 (effective 01/04/2025, 5-year pilot, Decree 75/2025/ND-CP); Investment Law 143/2025/QH15 Arts. 21/26 (3 registration cases, >50% threshold). Figures match VI exactly: 12 months / 24 months / ≤24-month extension / 20 ha / 20% / 15% / 5%. 4 uncertain_points translated 1:1 from VI (open wording, no hard commitments). No new legal claims introduced; FAQ answers condense body content only.

C. Depth — PASS. Full 15-step structure preserved (Groups A–D), share/asset comparison table, 12-row red-flag table, 5-item FAQ section, conclusion with hotline CTA. ~4,050 words ≥ 2,500. No hanging headings.

D. SEO/tech — PASS (after fix). rank_math_title 47/60; rank_math_description 155/160; single H1; slug clean; hotline 0988424851 in conclusion; `jpv-language-links` block standard with `lang="en"` (VI link PLANNED-marked, EN/ZH canonical absolute); frontmatter `internal_links_planned`: 3 cross-cluster + 1 hub_or_pillar (all 4 target URLs verified HTTP 200 on production 29/09); body carries the same 4 hrefs at VI-mirrored positions, all `/en/` locale (no cross-language violation); no CJK outside language block; no internal labels.

E. Translation fidelity — PASS (after fixes). Human legal localization, international law-firm register; no machine-translation artifacts found on adversarial read. Author "FLAT Law Firm" in frontmatter. EN↔ZH FAQ 5/5 topic-matched.

F. Cluster integrity — PASS. cluster_mates VI+ZH with correct slugs/titles; intra_cluster URLs canonical absolute.

Fixes applied by reviewer (all verified in file):

1. rank_math_description was 172 chars → shortened to 155 (≤160).
2. Removed duplicate T-082 link in conclusion (kept single hub link, mirroring VI).
3. (ZH file) "ND-CP" → "ND-CP" per T-137 ZH convention (3 occurrences).
4. (ZH file) removed 2 English-word leaks: "真正的 owners" → "真正的股东和实际控制人"; "托管、 holdback、价格调整" → "托管、扣留款、价格调整".