Buying Out the Vietnamese Partner to Become 100% Foreign-Owned is the route to turning a venture into a wholly foreign-owned company, but every step of it — valuation, pre-emption, the capital purchase registration — can become a bottleneck if it is not prepared early. This article analyses buy out Vietnamese partner 100 percent foreign-owned under current Vietnamese law at the time of writing, grounded in primary sources and real joint venture practice.
Current Legal Framework
Buying out the Vietnamese partner is a foreign investor’s capital contribution or purchase of capital or shares under Investment Law 143/2025/QH15; in statutory cases such as a conditional sector for foreign investors, a deal taking the foreign side above 50 percent of charter capital, or a company holding land use right certificates in sensitive areas, it must be registered with the provincial-level investment registration authority before membership changes.
After approval, the parties sign the transfer contract, pay through the investment capital account (ICA) under Circular 38/2026/TT-NHNN and register the membership and charter capital changes under Decree No. 168/2025/ND-CP on enterprise registration; the investment project may need a corresponding investment registration certificate adjustment.
Capital transfer tax: a Vietnamese corporate seller pays corporate income tax at 20 percent on transfer income under Law on Corporate Income Tax 67/2025/QH15; a resident individual seller pays personal income tax at 20 percent on capital contribution transfer income under Law on Personal Income Tax 109/2025/QH15.
Practical Analysis and Risks
Processing time for the investment registration follows Decree No. 96/2026/ND-CP and the practice of the provincial-level investment registration authority; investors should not promise a rigid closing timetable where the company’s sector sits on the restricted market-access list.
Value the bought stake on independent appraisal plus agreed treatment of debts, shareholder loans and intangibles; declaring a transfer price below real value to save tax is the largest reassessment and post-audit dispute risk in this type of deal.
Once wholly foreign-owned, the company loses some local-partner advantages such as land relationships and distribution reach; a handover plan for relationships, key Vietnamese staff and major customer contracts should run in parallel with the legal steps.
A French investor buying the 38 percent stake of its Vietnamese partner in a Hanoi pharmaceutical venture to reach 100 percent filed the capital purchase registration first because distribution was a conditional sector; approval obtained, the deal closed in one round with ICA payment and the seller’s transfer tax return filed the same day, so the bank did not suspend the payment.
The transfer contract should carry seller warranties on latent tax debts, labour disputes and off-book liabilities up to closing, backed by a reasonable escrow retention.
If the company enjoys project-linked investment incentives, recheck the incentive conditions when moving to 100 percent foreign ownership to avoid clawback after the investor structure changes.
Action Checklist for Investors
- Check whether the deal falls in a registrable capital purchase case
- Value independently and settle debts and shareholder loans
- File the registration with the provincial investment authority first
- Pay through the investment capital account and complete transfer tax
- Register membership change and adjust the investment certificate
Frequently Asked Questions
What is the procedure to buy out the Vietnamese partner and become 100% foreign-owned?
The steps are diligence and price agreement, checking whether capital purchase registration applies, filing with the provincial-level investment registration authority where required, signing the transfer contract, paying through the investment capital account, completing transfer tax, and registering the membership change with an investment certificate adjustment if needed.
Is State authority approval required?
Yes, in statutory cases: the sector is on the restricted-access list for foreign investors, the deal takes the foreign investor above 50 percent of charter capital, or the company holds land use rights on an island, in border or coastal areas or defence-sensitive zones. Outside those cases the deal mainly follows enterprise registration procedure.
Who pays the capital transfer tax?
Tax rests with the seller: a corporate seller pays 20 percent corporate income tax on transfer income, and a resident individual selling a capital contribution pays 20 percent personal income tax on the income. Contracts often have the buyer withhold and assist filing, but the underlying legal liability remains the transferor’s.
Additional practical note 1 on buy out Vietnamese partner 100 percent foreign-owned: before signing, investors should reconcile the agreed position against the company’s current charter, its investment registration file and commitments to third parties, and keep that reconciliation in the deal file so that when the investment registration authority, a bank or auditors ask for an explanation, the company has a consistent record instead of having to reconstruct a past decision.
This article has been quality-reviewed by the FLAW AI Legal Council