The first truth, stated plainly: Vietnamese law has no separate “holding company” entity type. No chapter of Enterprise Law 59/2020/QH14 governs holdings. Every “holding company” operating in Vietnam is in substance a limited liability or joint-stock company used to hold shares and capital contributions — holding is a use, not a legal form.
So what do foreign investors use a “holding” in Vietnam for?
1. Holding shares and managing the investment portfolio
The most common use: a Vietnamese entity registered as the holder of shares/stakes in several project companies, instead of the foreign parent holding each directly. The benefit is administrative leanness — one point exercising shareholder rights, one accounting apparatus — and flexibility in restructuring: transferring shares among portfolio companies without touching the overseas parent.
2. Ring-fencing risk per business line
A group can place real estate, manufacturing and services into different subsidiaries under one intermediate holder. One line’s legal risk does not “stick” to another — each company is liable with its own assets.
3. Preparing to divest or fundraise per line
When selling a business line, selling the holding company’s shares in that line is usually cleaner than selling assets piecemeal. Similarly, fundraising for a specific line prices more easily when the line is already “packaged” in its own entity.
Tax: two points to price before setting up the holding
Dividends: does the parent pay tax receiving dividends from the subsidiary?
Under the Corporate Income Tax Law 67/2025/QH15 framework (effective 1 October 2025), dividend income of the investing organization is treated under the current CIT rules — investors must check the specific provisions in force when the income arises, as tax policy is detailed in subordinate guidance. The practical point: dividends from a Vietnamese subsidiary to a foreign parent are subject to foreign contractor withholding tax under the foreign contractor tax rules — the new framework from 12 March 2026 being CIT Law 67/2025 + Decree 320/2025 + Circular 20/2026 (parts of Circular 103/2014/TT-BTC having been repealed).
Capital transfers: tax on the spread
When the holding transfers stakes/shares in a project company, the transfer gains are subject to CIT under current rules. Related-party transfer prices must follow arm’s-length principles under Decree 255/2026/ND-CP on related-party transactions (replacing Decree 132/2020 from 1 July 2026). Unreasonably low “internal” prices are the most reassessed item in audits.
Designing the holding: three structural decisions
- Where to sit the holding — Vietnam or offshore? A Vietnamese holding is fully governed by Vietnamese law but lean domestically; an offshore holding (Singapore, Hong Kong, etc.) may optimize tax on dividend flows via double-tax treaties — but verify the treaty genuinely exists and is in force, and price in the cost of maintaining the offshore entity.
- Which form for the holding — LLC or JSC? An LLC is lean, fitting a pure holding; a JSC is more flexible if new investors will later enter the holding itself or bonds will be issued.
- Will the holding have real business operations? Some models have the holding also provide management services to subsidiaries (consulting, accounting, HR) — in which case intra-group management fees must be backed by real services and market pricing, or they will be disallowed as deductible expenses.
FAQs
Must a Vietnamese holding register a “holding” business line?
There is no “holding” sector code. The company registers lines matching its actual activity: management consulting, head-office activities, or appropriate financial investment activity. Do not invent codes — check the current Vietnamese economic sector system.
Does a Vietnamese holding need an IRC?
If the holding is established by a foreign investor (directly or indirectly above the threshold), it still needs an investment project and an IRC under Investment Law 143/2025/QH15 like any other foreign-invested economic organization. “Holding” is not a ground for exemption from investment procedures.
Can a Vietnamese holding own shares in a public company?
Yes, but when ownership crosses securities-law thresholds (public tender offers, disclosures, related persons), the holding must comply fully like any other major shareholder. A holding is not a “cloak” for disclosure duties.
Should unrelated projects be grouped under one holding?
Think carefully: grouping is administratively lean, but one project’s risk can affect the whole portfolio’s fundraising ability and reputation (even though each subsidiary remains legally independent). Prudent groups typically give each major business line its own holding structure.
Contact us
FLAT Law Firm advises foreign investors on investment structuring, IRC/ERC procedures, ownership design and compliance in Vietnam. Contact us for advice on your specific case.
For reference only; not a substitute for legal advice on your specific case.
This article is pending review by the FLAW AI Legal Council.
