Buying an FDI Project in Vietnam: Tax, Valuation, Approvals

Buying an FDI Project in Vietnam: Tax, Valuation and Approvals — A Buyer's Guide

Acquiring an operating FDI project in Vietnam — a factory in an industrial park, an energy project, a logistics facility — gives a foreign investor immediate access to land, permits and progress, instead of licensing a greenfield project from scratch. But "buying a project" is not "buying a company": the object transferred is the investor's rights and obligations in the project, the procedure is a project amendment rather than a share transfer, and tax risk — especially the seller's corporate income tax and the project's outstanding tax debts — can come back to bite the buyer if due diligence is thin.

This guide approaches the deal from the buyer's side: legal conditions to receive a transfer, the tax layers to price in, valuation and diligence, and the approval procedure under Investment Law 143/2025.

Table of contents

• 1. "Buying a project" vs "buying a company"
• 2. Conditions to receive a project transfer
• 3. Tax in the transfer: who pays what
• 4. Valuation and the pricing trap
• 5. Buyer's legal due diligence checklist
• 6. Approval procedure: amend the project, don't re-apply
• 7. Frequently asked questions
• 8. When to work with a lawyer

1. "Buying a project" vs "buying a company"

A project deal is usually "cleaner" when the buyer wants the assets and permits without the seller's corporate history — but the investment procedures are more complex and some incentives may not transfer in full.

2. Conditions to receive a project transfer

Under Article 34 of Investment Law 143/2025, an investor may transfer all or part of a project when conditions are met. From a buyer's perspective — especially a foreign buyer — verify:

1. The project is not being terminated — a revoked or terminating project cannot be transferred.
2. Market access conditions: a foreign investor receiving the transfer must satisfy market access conditions for conditional business lines under the 2025 Investment Law and WTO commitments. This is a hard condition — failure means the amendment is refused.
3. Land conditions: for projects tied to land use rights, the transfer must comply with land law (remaining term, land use purpose, financial obligations).
4. Housing / real estate conditions: additional sectoral rules apply to housing or real estate projects.
5. Conditions in the approval / IRC: some projects carry bespoke conditions (timeline, environmental or technology commitments) that the buyer inherits.

3. Tax in the transfer: who pays what

This section answers the core tax question of the transaction: what the seller owes, and what the buyer must diligence. Start by drawing a clear line between each side's obligations, then review the other taxes.

3.1. Corporate income tax — the seller's liability, the buyer's risk

Income from transferring an investment project is other income subject to CIT under Article 3(2)(c) of the 2025 CIT Law. The taxpayer is the transferor (seller), on the spread between transfer price and investment cost.

The buyer pays no tax on the deal itself, but faces two linked risks:

• Outstanding tax debts of the project: unpaid taxes, land rentals and fees can travel with the project. The transfer agreement must include the seller's warranty of full settlement and indemnity for pre-closing tax assessments.
• Tax incentives: CIT holidays/reductions pass to the buyer only if the incentive conditions continue to be met. Review the original incentive approval — succession is not automatic.

3.2. Other taxes to diligence

• VAT: asset transfers within the deal may trigger VAT depending on deal structure.
• Registration fees: on re-titling registrable assets (workshops, vehicles).
• Foreign contractor tax: if the buyer assumes the project's contracts with foreign contractors, FCT withholding obligations shift to the buyer. From 1/7/2026, foreign contractor tax filing and payment follow Article 30 of Circular 89/2026/TT-BTC (which repealed Circular 103/2014/TT-BTC).

4. Valuation and the pricing trap

FDI project pricing typically uses DCF, market comparables or net asset value. Two buyer-side essentials:

1. Independent valuation report: not just for negotiation, but as evidence if the tax authority reviews the deal. If the transfer price is materially below market without justification, the seller's taxable income may be reassessed — and the dispute can stall the IRC amendment. Commission the valuation early, before price is locked, so the report can anchor the negotiation as well as the tax file.
2. Unbundle the price: land use rights, attached assets, machinery and intangibles (licences, incentives) should be allocated separately in the contract, since each group faces different tax treatment and titling procedures. A single lump-sum price invites the tax authority to reallocate — usually not in the parties' favour.
3. Mind the currency and payment mechanics: cross-border payments for the transfer must go through licensed banks with full supporting documents (transfer agreement, amended IRC, tax filings). Structure stage payments against milestones — signing, IRC amendment, licence re-titling — rather than paying 100% upfront.

5. Buyer's legal due diligence checklist

Run this at minimum before signing — and keep the seller's disclosure on record, because warranties given in the transfer agreement are only as good as the diligence behind them:

• IRC and approvals: valid, correct investor, correct objectives/scale/location; no timeline breaches. Check whether any committed milestone is already overdue, since the buyer inherits the breach.
• Land: land lease contract, remaining term (Article 172, Land Law 2024), financial obligations settled, no disputes. Confirm the remaining land term covers the buyer's payback horizon.
• Tax: tax clearance (or price retention mechanics), incentives and succession conditions. Ask the local tax department for a written confirmation of outstanding liabilities.
• Labour: employment contracts, social insurance arrears, pending disputes. Key-person dependency is a commercial risk, not just a legal one.
• Environment and fire safety: permits travel with the project. An expired environmental permit can halt operations on day one.
• Disputes: litigation or arbitration involving the project or seller that could touch the assets.

6. Approval procedure: amend the project, don't re-apply

A project transfer goes through a project amendment procedure (change of investor) under Investment Law 143/2025 and Decree 96/2026/ND-CP:

1. Sign a conditional project transfer agreement (conditional on amendment approval).
2. Transferor and transferee jointly file the amendment dossier with the investment registration agency.
3. The agency appraises conditions (especially the foreign investor's market access) and amends the IRC.
4. Settle the transaction's tax obligations; re-title related licences (land, environment, fire safety).

Note: if the transfer also changes objectives, scale, location or other approval-triggering contents, the dossier becomes more complex and may require higher-level approval.

7. Frequently asked questions

Q: Does the buyer pay corporate income tax on an FDI project transfer?

A: No. CIT is levied on the transferor (seller): income from transferring an investment project is 'other income' subject to CIT under Article 3(2)(c) of the 2025 CIT Law. The buyer pays no tax on the transaction itself but must diligence the project's outstanding tax liabilities, which travel with the project.

Q: Does buying an FDI project require a fresh investment policy approval?

A: Not necessarily. Project transfers go through a project amendment procedure (change of investor) under the Investment Law 143/2025 and Decree 96/2026/ND-CP — not a new approval — unless the transfer changes objectives, scale, location or other approval-triggering contents.

Q: Must a foreign buyer satisfy market access conditions?

A: Yes. A foreign investor receiving a project transfer must meet market access conditions for conditional business lines under the 2025 Investment Law and Vietnam's WTO commitments. This is a hard condition.

Q: What is the key tax risk in pricing the transfer?

A: The transfer price must reflect market value, evidenced by an independent valuation. If the tax authority finds the price materially below market without justification, the seller's taxable income may be reassessed — and the resulting dispute can delay the IRC amendment.

Q: Do the project's tax incentives pass to the buyer?

A: They may, if the buyer continues to meet the incentive conditions (location, sector, scale). Succession is not automatic — review the original incentive approval and confirm with the tax authority.

Q: How does buying an FDI project differ from buying the company operating it?

A: Buying the project transfers the investor's rights and obligations in the project (an investment procedure); buying the company transfers equity (a corporate procedure). Buying the project leaves the old legal entity with the seller; buying the company means inheriting the entire entity, including hidden debt and dispute risks.

8. When to work with a lawyer

Work with a lawyer when: negotiating an FDI project acquisition and structuring the deal (asset/project deal vs share deal); running full legal due diligence, especially on land, tax and licences; negotiating tax and legacy-liability protections in the transfer agreement; or when the IRC amendment stalls on market access conditions. FLAT Law Firm advises investors on M&A and project transfers across Vietnam — contact our hotline 0988424851 for a tailored, practical, enforceable plan.

Language versions

References

• Investment Law 143/2025/QH15 (passed 11/12/2025, effective 01/3/2026), Article 34.
• Decree 96/2026/ND-CP guiding the Investment Law (31/3/2026).
• 2025 Corporate Income Tax Law, Article 3(2)(c).
• Land Law 2024 (31/2024/QH15, effective 01/8/2024), Article 172.

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