The legal substance: a foreign investor buying out the entire capital contribution of the Vietnamese partner in a joint venture is a “purchase of capital contribution” under Articles 18.2 and 21 of the 2025 Investment Law (Law 143/2025/QH15, effective 01/3/2026). It is not a new investment project and does not require a new investment registration certificate (Art. 26.2, 2025 Investment Law). A typical scenario: a foreign investor in a manufacturing JV wants to buy the Vietnamese partner 30% stake to fully control a plant expansion. There is no standalone “JV conversion procedure” — it is a 3-step chain: M&A registration + capital transfer + enterprise registration.
Step 1 — M&A registration BEFORE changing members (mandatory)
The point many investors miss: buying up to 100% ALWAYS requires registration — under Article 21.3(b) of the 2025 Investment Law, including the case of “increasing the ownership ratio when the foreign investor already holds over 50%”. The belief that “already above 50%, so buying the rest needs no registration” is WRONG — the law has no such exception.
Conditions for capital purchase registration (Art. 21.2): meeting market-access conditions (Art. 8, 2025 Investment Law; Appendix I of Decree 96/2026/ND-CP); ensuring national defense and security; complying with land regulations.
Procedure under Article 76 of Decree 96/2026/ND-CP: file one dossier set with the investment registration agency where the company head office is located; 10 working days for the notification. The dossier includes:
- Written registration of the capital contribution purchase;
- Legal documents of the investor;
- The in-principle agreement with the seller on the purchase.
Step 2 — Transfer of the capital contribution and payment
- Offer to the remaining members first: before transferring to an outsider, the transferring member must offer its stake to the remaining members under Article 52.1 of the 2020 Enterprise Law, within 30 days (check the latest consolidated text after Law 76/2025, effective 01/7/2025);
- Sign the transfer contract between the parties;
- Pay through the investment capital account opened in Vietnam — stake purchase transactions between foreign investors and Vietnamese parties must go through the investment capital account under foreign exchange administration rules;
- Declare and pay taxes arising from the transfer under tax law.
Step 3 — Entity conversion and enterprise registration
With only one member left, the company converts into a single-member limited liability company and must register the change of enterprise registration contents within 15 days of the change (Art. 52.3, 2020 Enterprise Law). The conversion dossier follows Decree 168/2025/ND-CP on enterprise registration (replacing Decree 01/2021) — readers should check the original text of this decree for the exact article on dossier requirements.
At the same time, if the conversion changes registered project contents, the investor adjusts the project investment registration certificate under Article 33.2 of the 2025 Investment Law.
After becoming 100% foreign-owned
Once the company is 100% foreign-owned, it is subject to investment conditions applicable to foreign investors according to the ownership ratio — including market-access conditions for conditional business lines. The full list of business lines should be re-checked after conversion.
Three common traps
- Citing “Article 26 of Law 61/2020, 15 days, Department of Planning and Investment”: entirely wrong — the current framework is Article 21 of Law 143/2025 + Article 76 of Decree 96/2026, 10 working days, investment registration agency. Investment Law 61/2020 expired on 01/3/2026;
- “Already above 50%, so buying the rest needs no M&A registration”: wrong — Article 21.3(b) covers increases when already above 50%;
- Paying directly offshore without going through the investment capital account: violates foreign exchange rules — the transaction must pass through the investment capital account in Vietnam.
Points to double-check
- Law 76/2025 (effective 01/7/2025) amended the 2020 Enterprise Law — when applying Art. 52 (30-day offer, 15-day change registration), check the latest consolidated text to confirm the contents;
- Joint ventures established under old Investment Licenses (pre-2005/2014 Investment Law era): transitional procedures under Decree 96/2026 may additionally apply — research further if this is your case.
FAQs
Does buying out the Vietnamese partner stake require a new investment registration certificate?
No. It is a capital contribution purchase under Art. 21 of the 2025 Investment Law, not a new investment project, so no new IRC is needed (Art. 26.2). But M&A registration beforehand is mandatory (Art. 76, Decree 96/2026).
A foreign investor already holds 60% — does buying the remaining 40% need registration?
Yes. Article 21.3(b) of the 2025 Investment Law includes increases when the foreign investor already holds over 50%.
How is payment for the stake purchase made?
Through the investment capital account opened in Vietnam under foreign exchange administration rules, with tax declaration on the transfer transaction.
Legal sources
- 2025 Investment Law (Law 143/2025/QH15, effective 01/3/2026): Arts. 18.2, 21 (purchase of capital contribution; purchase registration); Art. 21.2 (conditions); Art. 26.2 (not a new project); Art. 8 (market access); Art. 33.2 (IRC adjustment).
- Decree 96/2026/ND-CP (effective 31/3/2026): Art. 76 (capital purchase registration procedure, 10 working days); Appendix I (market-access restricted list).
- 2020 Enterprise Law (check the consolidated text after Law 76/2025, effective 01/7/2025): Art. 52.1 (stake offer, 30 days); Art. 52.3 (change registration, 15 days).
- Decree 168/2025/ND-CP on enterprise registration (replacing Decree 01/2021): entity conversion dossier (check the original text for the article number).
A foreign investor looking to buy out the Vietnamese partner stake and take full control of the business? Reach us via the Contact page of FLAT Law Firm for advice on the M&A roadmap and entity conversion procedures.
The legal content of this article is reviewed by the FLAW AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.
For reference only, not legal advice.
