When acquiring a foreign-invested (FDI) project in Vietnam, the buyer typically asks the seller to give representations and warranties (R&W) about the legal status of the project. The starting point to understand: Vietnamese law has no statutory regime for “representations and warranties”. This is purely a contract-drafting technique, effective under the principle of freedom of agreement (Article 3 of the Civil Code 2015) and subject to the validity conditions for civil transactions (Article 117 of the Civil Code 2015).
The legal framework for FDI project transfers
Project transfers are governed by Article 34 of the Investment Law 143/2025/QH15 (which replaced Law 61/2020/QH14 in full from 01/3/2026). Under Article 34.1, a transfer may proceed only if five conditions are met:
- The project has not been terminated under Article 36;
- The foreign investor receiving the transfer meets market-access conditions under Article 21.2;
- Conditions on land, housing and real estate business are satisfied;
- Conditions in the investment policy approval or the Investment Registration Certificate (IRC) are satisfied;
- For state-owned enterprises, additional procedures on management of state capital apply.
Note: do not cite “Article 46 of the Investment Law” — that numbering belongs to the old Law 61/2020. The current provision is Article 34 of Law 143/2025.
On procedure: a project with an approved investor (Article 23) or an IRC follows the project-adjustment procedure under Article 33. The dossier includes the transfer contract (or in-principle transfer contract), the legal documents of both parties and proof of the transferee financial capacity, in line with the dossier and procedure rules of Decree 96/2026/ND-CP. Article 57.5(c) of Decree 96/2026 identifies the transfer contract as a mandatory document in the administrative dossier.
For real estate projects, the transfer follows the Law on Real Estate Business 29/2023/QH15, not the Investment Law track. Also distinguish clearly between project transfer (Article 34 of Law 143/2025) and equity/share transfer (governed by the Law on Enterprises) — the two transactions differ in legal nature, and so do their R&W packages.
The seller R&W groups to include
The seller warranty groups should track the statutory conditions above:
- Legal standing and authority: the seller is duly established, the signatory has full authority, and internal approvals are in place;
- Valid IRC/approval: the IRC or investment policy approval remains valid and the project is not subject to termination;
- Land use rights and land financial obligations: lawful land use rights, with land-related financial obligations fulfilled or being fulfilled on schedule;
- Compliance with approval/IRC conditions: the project operates as approved, without breach of investment incentive conditions (if any);
- Tax, labor, environment: tax filings and payments up to date, compliance with labor and environmental law, required environmental permits in hand;
- No disputes or proceedings: no pending or threatened disputes, claims, litigation or inspections relating to the project;
- Full disclosure: all documents and information provided during due diligence are complete, accurate and not misleading.
Remedies for breach of warranties
On breach, the primary remedy is damages under Article 302 of the Commercial Law 2005, plus contractual penalties where agreed. In practice, parties commonly add the following mechanisms — all are contractual arrangements, not statutory rules:
- Price adjustment: reducing the transfer price to reflect losses from the breach;
- Escrow/holdback: retaining part of the price in escrow to secure indemnity obligations;
- Termination right: the buyer may terminate for material breach of warranties;
- Cap, basket, de minimis: liability caps, claim thresholds and aggregation of small losses;
- Survival period: how long warranties survive closing — Vietnamese law does not regulate this; the parties must agree it.
Practical drafting notes
- Avoid copying English/US R&W templates without checking them against Vietnamese law;
- Tie each warranty to a specific statutory condition to ease proof in disputes;
- Provide a disclosure-schedule mechanism and rules for disclosed information;
- Do not invoke Decree 360/2026 for M&A deals and do not cite a “Law on Lawyers (amended 2024)” — irrelevant/nonexistent in this context.
Frequently asked questions
Q: Does Vietnamese law provide a standard R&W template?
A: No. These are negotiated clauses, effective under the Civil Code 2015 freedom-of-agreement principle.
Q: What can the buyer recover if the seller breaches a warranty?
A: Damages under Article 302 of the Commercial Law 2005, plus agreed mechanisms such as price adjustment, escrow or penalties.
Q: How long do warranties survive after closing?
A: Vietnamese law sets no survival period — the parties must agree it in the contract.
Sources
- Investment Law 143/2025/QH15 (Articles 21, 23, 33, 34, 36);
- Decree 96/2026/ND-CP (including Article 57.5(c) on the transfer contract in the dossier);
- Civil Code 91/2015/QH13 (Articles 3, 117, 385);
- Land Law 31/2024/QH15;
- Law on Real Estate Business 29/2023/QH15;
- Commercial Law 2005 (Article 302).
Legal information verified as of the drafting date (14/10/2026). Laws may be amended — check their current validity before applying.
Preparing to transfer or acquire an FDI project and need your warranty clauses reviewed? Contact FLAT Law Firm for advice.
Transparency note: This article was quality-reviewed by the FLAW AI Legal Council, not by a human lawyer, and does not constitute legal advice for your specific matter.
