Not every foreign capital contribution or share purchase in Vietnam must pass through investment registration approval. Current investment law narrows the capital contribution registration duty to three specific case groups; outside those groups, the deal proceeds straight under enterprise procedures. Understanding the exemption threshold correctly does more than save a few weeks of waiting; it prevents the reverse error of assuming an exemption when the deal actually touches one of the three mandatory cases.
The Legal Framework You Need
Under the Law on Investment 143/2025/QH15 and Decree No. 96/2026/ND-CP, a foreign investor must register a capital contribution or share purchase with the investment registration authority before changing members or shareholders in three cases: first, the target operates in a sector on the conditional restricted market-access list for foreign investors; second, the transaction takes the foreign investor and related persons above 50 percent of the target charter capital; third, the target holds a land use right certificate on an island, in a border or coastal commune, or in another area affecting national defence and security.
Outside those three cases, the investor needs no approval letter for the capital contribution and simply performs the member or shareholder change procedure under enterprise law, mainly Decree No. 168/2025/ND-CP on enterprise registration. Exemption here means exemption from the investment approval step, not from every duty: the company must still satisfy sector market-access conditions, update foreign shareholder information, and the investor must still respect any sector-specific ownership ceilings, for example in banking or securities, that apply independently.
Applying the Rules to a Real Deal
The most practical question is how the above-50-percent threshold is computed: the ratio is measured after the transaction, aggregating the holdings of the investor and related persons over the target total charter capital. A 30 percent purchase that looks safe still crosses the line if a related person of the buyer already holds 25 percent. Likewise, a small deal in an ordinary manufacturer can accidentally fall into the third case simply because the company plant sits in a coastal commune. The exemption assessment must therefore run through all three test questions in order, and the conclusion should be documented in the deal file.
On the authority side, even without approval registration, the company still files an enterprise registration change involving a foreign shareholder, and the business registration authority may cross-check investment conditions where needed. Investors should avoid splitting a deal to dodge the threshold: dividing one transaction into consecutive purchases to keep each tranche below the line risks being assessed on its aggregated substance, especially where the tranches were planned in a single roadmap. The lawful way to reduce procedure is structuring ownership to match the real need, for example stopping at a non-controlling stake when control is unnecessary, and accepting registration when the deal genuinely crosses a threshold.
Illustrative example: A Taiwanese manufacturer bought 45 percent of a components company located inside an industrial park in Bac Giang. The sector was open, the stake stayed below half, and the land sat inside the park rather than a sensitive area, so counsel documented a three-question exemption memo and the parties proceeded straight to the shareholder change filing. When the registration authority queried the absence of an investment approval during a later capital increase, the contemporaneous memo closed the question in one exchange.
Procedure and Documents to Prepare
First: list the target actual business lines and cross-check the restricted market-access sector list. Next: compute the post-deal holding of the investor plus related persons over charter capital to test the above-50-percent threshold. After that: check the target land locations and land use right certificates for island, border, coastal or defence-security areas. Then: if none of the three cases applies, proceed directly to the member or shareholder change under enterprise registration law. Finally: file a written exemption conclusion with its grounds in the deal record, ready for any authority query.
- list the target actual business lines and cross-check the restricted market-access sector list.
- compute the post-deal holding of the investor plus related persons over charter capital to test the above-50-percent threshold.
- check the target land locations and land use right certificates for island, border, coastal or defence-security areas.
- if none of the three cases applies, proceed directly to the member or shareholder change under enterprise registration law.
- file a written exemption conclusion with its grounds in the deal record, ready for any authority query.
Common Risks and How to Prevent Them
The first risk is forgetting to aggregate related persons holdings when testing the above-50-percent threshold, producing a wrong exemption conclusion. The second risk is overlooking target land on an island, border or coast, the mandatory case most often missed. The third risk is splitting a transaction to dodge the threshold, inviting substance-based reassessment and procedural redo. The safeguard is running all three test questions for every deal, documenting the conclusion, and asking the investment registration authority whenever an element is unclear.
Exemption from a procedure does not mean exemption from documentation: every below-threshold deal still needs the three screening questions, one written conclusion, and a question to the investment registration authority whenever any element remains unclear. A thin but complete file is worth more than a thick one that lacks a conclusion.
Frequently Asked Questions
Which thresholds exempt a capital contribution from approval?
There is no single percentage threshold for every deal. Exemption from capital contribution registration applies when the transaction simultaneously avoids the three statutory cases under the Law on Investment 143/2025/QH15: the target is not in a conditional restricted market-access sector for foreign investors; after the deal the investor and related persons do not hold above 50 percent of charter capital; and the target holds no land use right certificate on an island, in a border or coastal area or a defence-security area. Touching just one case makes prior registration mandatory before changing members or shareholders.
How is the procedure simplified below the threshold?
When exempt, the procedure shortens materially: the parties skip waiting for an investment registration approval letter, sign, pay through the investment capital account, then file the member or shareholder change with the business registration authority under Decree No. 168/2025/ND-CP. The company simultaneously updates its member or shareholder register and foreign shareholder information as required. The time saved is mainly the investment appraisal round, but the corporate, tax and banking steps must still be completed in full as in an ordinary transaction.
If a deal slightly exceeds the threshold, is there a lawful way to avoid the procedure?
No, and most dodges are unlawful once viewed in substance. Splitting one deal into tranches to stay below a threshold, using nominee holders, or signing side contracts that misstate the real ownership ratio all risk being aggregated and reassessed by the authority, leading to procedural redo, penalties and even transaction invalidity risk. The only lawful route is structuring to the real need: if control is unnecessary, stop below the threshold and protect minority rights by agreement; if control is needed, treat capital contribution registration as a normal deal step.
