Valuing IP Rights for Capital Contributions When Forming a Company

Trademarks, patents, and industrial designs can be highly valuable assets — many founders want to contribute their intellectual property rights as capital when forming a company instead of cash. Vietnamese law permits this but imposes strict conditions on ownership standing and valuation methods. This article analyzes the valuation of IP rights contributed as capital under the current Law on Enterprises.

Can IP rights be used as capital contributions?

Yes. Article 34 of the Law on Enterprises 59/2020/QH14 lists “intellectual property rights” among assets that may be contributed as capital. The prerequisite, however, is that only lawful owners may contribute IP rights as capital. In other words, the contributor must prove lawful ownership of the IP subject matter.

Note: Law 76/2025/QH15 (effective 01/7/2025) did not amend Articles 34 or 36 of the Law on Enterprises, so the rules below remain in force.

Which rights are safe to contribute — and which are risky?

Safest: rights established by a valid protection certificate — e.g., trademark registration certificates, patents, industrial design certificates. The certificate is clear evidence of lawful ownership.
High risk: rights with pending applications (filed but not yet granted) — proving “lawful owner” status at the time of contribution is very difficult.
High risk: unregistered trade secrets and know-how — establishing and proving ownership is hard in practice and prone to later disputes. This is a practical warning, not a statement that such contributions are prohibited.

Importantly, contributing certificated industrial property rights is in substance an assignment of industrial property rights to the company — it must therefore be registered with the Intellectual Property Office of Vietnam (IP Vietnam) to be effective against third parties (Article 148 of the Law on Intellectual Property).

Valuing contributed IP under Article 36 of the Law on Enterprises

Contributed assets other than Vietnamese dong, freely convertible foreign currencies, or gold must be valued. Article 36 of the Law on Enterprises provides:

At company formation, contributed assets must be valued by the founding members/shareholders on the principle of consensus, or by a valuation organization.
Where a valuation organization conducts the valuation, the appraised value must be approved by more than 50% of the founding members/shareholders.
Values are denominated in Vietnamese dong.

The professional framework: Price Law 16/2023/QH15 (effective 01/7/2024) and Circular 37/2024/TT-BTC (effective 01/7/2024) issuing valuation standards for intangible assets (replacing Circular 06/2014/TT-BTC) — IP rights fall within intangible assets. Additionally, Decree 100/2026 adds Article 9a to Decree 65/2023/ND-CP, listing IP rights as a basis for valuation in transactions.

The biggest risk: inflated valuation

Article 36 of the Law on Enterprises imposes strict consequences for valuing assets above their actual value:

Founding members/shareholders must jointly contribute additional assets equal to the difference between the appraised value and the actual value at the end of the valuation;
And are jointly liable for damages caused by deliberately valuing contributed assets above their actual value.

To be candid: valuing IP rights is a difficult professional exercise — intangible-asset valuation methods are complex and dispute-prone. Do not assume valuation is “simple” — companies should engage a competent valuation organization and keep complete valuation files and supporting grounds.

Practical recommendations

Complete rights establishment before contributing: ensure the protection certificate has been granted and remains valid at the time of contribution.
Register the assignment with IP Vietnam: for industrial property rights, complete registration to secure effect against third parties (Article 148 of the IP Law).
Engage an independent valuation organization, secure approval from more than 50% of founding members/shareholders, and keep complete valuation records.
Be cautious with trade secrets/know-how: build clear mechanisms for establishing, protecting, and proving ownership before contributing.
Record everything in the charter and contracts: describe the contributed assets, values, and timing of ownership transfer to avoid internal disputes.

Frequently asked questions

Can a pending trademark application be contributed as capital?

Very risky. Without a granted certificate, the applicant will struggle to prove “lawful owner” status required by Article 34 of the Law on Enterprises. It is advisable to wait for grant before contributing.

Must a patent contribution be registered with IP Vietnam?

Yes. Contributing certificated industrial property rights constitutes an assignment and must be registered with the Intellectual Property Office of Vietnam to be effective against third parties (Article 148 of the IP Law).

Who is liable if IP is overvalued?

Founding members/shareholders are jointly liable to contribute the shortfall and jointly liable for damages caused by deliberate overvaluation (Article 36 of the Law on Enterprises).

Can founders agree on value without a valuation firm?

Yes. Article 36 allows founding members/shareholders to value assets by consensus without a valuation organization. For intangible assets like IP rights, however, an independent valuer reduces later dispute risk.

Legal references

Law on Enterprises 59/2020/QH14 — Article 34 (contributable assets), Article 35 (transfer of ownership of contributed assets), Article 36 (asset valuation). Law 76/2025/QH15 (effective 01/7/2025) did not amend Articles 34 or 36.
Price Law 16/2023/QH15 (effective 01/7/2024).
Circular 37/2024/TT-BTC (effective 01/7/2024): valuation standards for intangible assets (replacing Circular 06/2014/TT-BTC).
Decree 100/2026 adding Article 9a to Decree 65/2023/ND-CP: IP rights as a valuation basis in transactions.
Law on Intellectual Property — Article 148 (registration of industrial property assignment).