A technology line is not one asset — it is two assets traveling together: the hardware (machinery, equipment, tangible control systems) and the operational know-how (processes, parameters, control software, accumulated calibration experience) that decides whether the line produces conforming output or is merely a correctly-shaped pile of steel. Contributing both as one merged figure is the classic valuation error: it blends two value bases, two legal regimes and two entirely different depreciation paths.
1. Hardware: valued as tangible assets
The line’s hardware follows the same discipline as machinery and equipment. If the line is imported from abroad and used, Decision No. 18/2019/QD-TTg’s conditions apply at line level: line age not over 20 years, remaining performance at least 85% of design, technology not prohibited — with inspection by a designated organization, as analyzed in the topic on contributing used machinery. On value: hardware is appraised by the market approach (prices of equivalent lines of the same age and condition) or the cost approach (reproduction cost less physical wear and functional obsolescence), by party agreement or valuation under Article 36 of the Law on Enterprises. A technical point to lock: accompanying component inventory and software embedded in the machines (firmware, PLC programs bought outright with the machines) usually travel with the hardware; production management software and process data whose ownership is severable belong to the know-how group below — this boundary must be drawn in the asset list attached to the contribution minutes, not left to default.
2. Operational know-how: valued as an intangible
Operational know-how is an intangible asset: trade secrets and rights over technology under the Law on Technology Transfer No. 07/2017/QH14 (as amended by Law 115/2025). This part is valued by the income approach on the incremental cash flow the know-how creates — the margin, defect-rate and throughput differences between “with know-how” and “hardware only”. The error to block is double counting: if the hardware was valued as an efficiently running line (the market price of a line that “knows how to run”), and the know-how is then valued on that same line’s entire cash flow, the same value is recorded twice — auditors and tax authorities reviewing technology contributions start exactly at this point. Standard practice is contribution allocation: determine which part of the cash flow belongs to each asset (hardware, know-how, brand, working capital, workforce) and record for know-how only its own part. Because know-how wears by technology cycle rather than mechanical time, the valuation file should carry a technology update roadmap and clauses on upgraded versions: this year’s battery or EV line know-how can lose its edge within years if the contributor has no duty to transfer subsequent improvements.
3. The accompanying technology transfer legal layer
Unlike pure machinery, the line’s technology part pulls in its own procedural layer. Under the Law on Technology Transfer, a contract transferring technology from abroad into Vietnam must be registered with the competent state science and technology authority (save statutory exceptions), and contributing technology as capital does not exempt this registration layer — the contribution file needs a technology transfer contract (or a technology chapter in the contribution contract satisfying transfer content requirements) and the registration certificate where registration applies. The precondition running through all layers: the transferor must be the lawful technology owner or authorized by the owner to transfer (Article 8 of the Law on Technology Transfer as amended by Law 115/2025) — for lines assembled from several third parties’ technology, this rights chain must be reviewed link by link. Technology on the restricted transfer list needs a technology transfer license before performance; technology on the prohibited transfer list (under Decree 101/2026 replacing Decree 76/2018 on the technology lists and guidance for the Law on Technology Transfer) may not enter Vietnam in any form, capital contribution included.
4. Can “obsolete” technology be contributed?
The answer splits the word obsolete into two meanings. Commercially obsolete (no longer the newest generation but still operating efficiently and producing market-conforming output): contributable normally — the consequence lands on valuation, with the know-how value deeply discounted by technology position and remaining exploitation horizon. Legally obsolete (on the prohibited or restricted transfer lists for environmental or safety harm, or eliminated technology): blocked at the legal gate — prohibited means not transferable at all, restricted means a transfer license is required. For new-technology fields such as batteries and electric vehicles, most current production technology sits in the encouraged group for transfer into Vietnam, but the conclusion for each specific line must still be cross-checked against the lists in Decree 101/2026 and the technology ownership status at transaction time — “the sector is hot” does not imply “every line passes”.
Frequently asked questions
How is a technology line valued?
Split it in two and value separately: hardware by the market or cost approach like machinery (Article 36 of the Law on Enterprises); operational know-how by the income approach on the incremental cash flow it creates, after allocating away cash flow belonging to other assets to avoid double counting.
How are hardware and know-how separated?
Draw the boundary in the asset list attached to the contribution minutes: machinery, equipment, components and embedded software travel with the hardware; processes, operating parameters, severable management software and secret data form the intangible part, accompanied by a technology transfer contract.
Can obsolete technology be contributed?
Commercially old (past generation but still effective) yes, with value discounted by technology cycle. Legally obsolete is blocked: technology on the prohibited transfer list under Decree 101/2026 cannot enter Vietnam; technology on the restricted list needs a technology transfer license.
Must the technology transfer contract be registered?
Yes for technology transferred from abroad into Vietnam: the technology transfer contract must be registered with the competent science and technology authority under the Law on Technology Transfer, and contributing technology as capital does not exempt this procedure.
This article has been quality-reviewed by the FLAW AI Legal Council