Buying capital contributions in a limited liability company is a common gateway for foreign investors into an operating Vietnamese business, but this company form does not allow free transfer the way shares do. The law builds a priority fence for existing members, and a deal is only complete when the offer sequence has been respected. Many transactions collapse not over price, but because the seller forgot to offer the stake to insiders before signing with an outsider.
The Legal Framework You Need
The Law on Enterprises 59/2020/QH14 requires a member of a multi-member limited liability company who wishes to transfer capital to first offer it to the remaining members pro rata on the same conditions; only if they do not buy, or do not buy all of it, within 30 days from the offer date may the member sell to a non-member. This statutory pre-emptive right exists whether or not the charter mentions it. A foreign buyer must then clear a second layer under the Law on Investment 143/2025/QH15: registration of the capital purchase with the investment registration authority where the company operates in a conditional market-access sector, or where the deal takes the foreign investor above 50 percent of charter capital.
Once the transfer completes, the company must register the change of members under Decree No. 168/2025/ND-CP, issue a capital contribution certificate to the new member and record them in the member register. One frequently missed point is that the seller must have fully paid in the contributed capital; if not, the unpaid portion remains the seller obligation, and the parties should agree expressly who tops it up, because Article 47 of the Law on Enterprises 59/2020 sets a 90-day deadline for paying in initially registered capital from the date of the Enterprise Registration Certificate.
Applying the Rules to a Real Deal
In negotiation practice, the pre-emptive right creates an uncertainty window of at least 30 days: the seller sends a written offer stating the amount of capital, the price and payment terms, and the remaining members may buy pro rata. If one member declines, that share is re-allocated among the members who accept. A careful foreign investor turns the expiry of the 30 days and proof of a valid offer into conditions precedent of the purchase agreement, instead of trusting a verbal assurance that the other members have agreed.
The transfer price is freely negotiated, but the price stated in the contract is also the basis for the seller capital transfer income tax, so recording a token price far below real value invites reassessment by the tax authority. The buyer should also read the charter, which may impose stricter transfer conditions than the law, such as a members council approval at a high voting threshold. In the end, the buyer membership is only truly secure once their name appears in the enterprise registration dossier and in the company member register.
Illustrative example: A Japanese trading house agreed to buy 35 percent of a Da Nang seafood processor owned by three Vietnamese members. One member holding 20 percent was abroad and had never received the offer letter. Rather than closing on schedule, the buyer insisted the seller re-run the offer with courier proof of delivery to all members. The overseas member replied on day twenty-six declining to buy, the deal closed cleanly a week later, and no member could later challenge the transfer.
Procedure and Documents to Prepare
First: review the target charter and the seller paid-in status to determine exactly how much capital may lawfully be transferred. Next: require the seller to send a written offer to every remaining member on the same terms intended for the foreign buyer. After that: wait out the 30-day period and collect written refusals or confirmations of partial purchase from existing members. Then: complete the foreign investor capital purchase registration with the provincial investment registration authority if the case requires it. Finally: sign the transfer agreement, pay through the investment capital account, then file the change of members and obtain the capital contribution certificate.
- review the target charter and the seller paid-in status to determine exactly how much capital may lawfully be transferred.
- require the seller to send a written offer to every remaining member on the same terms intended for the foreign buyer.
- wait out the 30-day period and collect written refusals or confirmations of partial purchase from existing members.
- complete the foreign investor capital purchase registration with the provincial investment registration authority if the case requires it.
- sign the transfer agreement, pay through the investment capital account, then file the change of members and obtain the capital contribution certificate.
Common Risks and How to Prevent Them
The biggest risk is skipping the pre-emptive offer: an existing member has grounds to ask a court to void the outsider transfer for violating their statutory right. The second risk is buying capital that was never fully paid in without agreeing who tops it up, leaving the investor paying twice for the same stake. The third risk is a charter condition on transfers that the buyer never read, letting the members council veto the deal at the last minute. The safeguard is to convert the whole chain of offer, internal approval and registration into documented conditions precedent inside the agreement.
In a capital-contribution purchase, the chain of pre-emptive offer, internal approval and member-change registration is the backbone of validity; one missing link puts the whole deal in question. Turn each link into a condition precedent backed by written evidence inside the contract, and release funds only once the chain is closed.
Frequently Asked Questions
What is the procedure for buying capital contributions in an LLC?
The process has five main stages. First, the buyer reviews the charter, the member register and the seller paid-in position. Second, the seller offers the capital to the remaining members and the 30-day priority period runs out. Third, the foreign investor completes capital purchase registration where required under the Law on Investment 143/2025/QH15 and Decree No. 96/2026/ND-CP. Once approved, the parties sign the transfer agreement and pay through the investment capital account. Finally, the company registers the change of members under Decree No. 168/2025/ND-CP and issues the new member a capital contribution certificate.
Do the remaining members have a pre-emptive right to buy?
Yes, and it is a statutory right rather than a contractual courtesy. Under Article 52 of the Law on Enterprises 59/2020/QH14, the transferring member must offer the capital to the remaining members pro rata, on the same conditions as those offered to an outsider. Those members have 30 days from the offer date to exercise the right. Only capital that is not bought, or not bought in full, may be sold to an outside investor. A buyer should therefore ask to see the offer evidence and written refusals before releasing any money.
What happens if the capital is not offered to existing members first?
The consequences can be severe. A transfer to an outsider made without first offering the capital to existing members breaches the statutory sequence, and the prejudiced member may sue to have the contract declared void or to be allowed to buy that capital on the same terms. Even without litigation, the change-of-member filing can be questioned by the registration authority. The only safe cure is to redo the offer step in full form, obtain written confirmation from each member, and only then re-sign the transfer agreement.
