In a cross-border M&A deal, the purchase price cannot simply be wired “as usual”. Vietnamese foreign exchange law classifies payment for shares or capital contributions as a capital transaction — subject to far tighter control than current transactions (payments for goods and services).
This article maps the three layers of foreign exchange control that buyers, sellers and banks must pass through, plus the most common traps.
1. The framework: this is a capital transaction
The governing framework comprises the Ordinance on Foreign Exchange 28/2005/PL-UBTVQH11 (amended in 2013), Decree 70/2014/ND-CP and the State Bank of Vietnam (SBV) circular system.
The starting point: paying for shares or capital contributions in a Vietnamese enterprise is a capital transaction, not a current transaction. As a result, the money must flow through the correct type of capital account at a licensed bank — using the wrong account type is the most common reason banks refuse disbursement.
2. Layer 1: the correct capital account — the DICA trap
Under Circular 06/2019/TT-NHNN (checked as of 14 October 2026, this circular remains in effect):
- Article 4: capital contributions in cash by foreign investors must go through a direct investment capital account (DICA);
- Article 3(2): the classification threshold is 51% of charter capital — a foreign investor holding 51% or more of charter capital (or falling within the prescribed cases) must open and use a DICA; cases below the threshold or outside direct investment use an indirect investment capital account under Circular 05/2014/TT-NHNN.
The practical trap: many deals below 51% but with control rights (board seats, veto rights) still prompt banks to demand clarification of the account type. The post-closing ownership structure must be finalized before opening the account to avoid mid-process conversion.
3. Layer 2: a valid documentation package for the bank
A licensed bank may only disburse when the file proves the legality of the transaction. The core documents include:
- The share/capital contribution transfer agreement;
- The Investment Registration Certificate and/or Enterprise Registration Certificate;
- Written confirmation that the transaction-related legal procedures have been completed.
One missing link gives the bank both the right — and the duty — to refuse the transfer. Buyers should finalize the document checklist with the bank before the expected payment date, not scramble to supplement the file at disbursement.
4. Layer 3: registering the transaction with the State Bank of Vietnam
Some payment structures trigger an SBV registration obligation — typically medium- and long-term foreign loans and repayments connected with the deal (for example, where the buyer borrows offshore to pay for the company). Skipping this registration makes the subsequent debt-service cash flow impossible to execute.
5. No pricing or payment in foreign currency inside Vietnam
Under Circular 32/2013/TT-NHNN: within the territory of Vietnam, pricing and payment in foreign currency are prohibited. The transfer agreement must state the price in Vietnamese dong (VND); foreign currency conversion is carried out through a licensed bank at the transaction-time exchange rate.
6. Offshore payment: when is it allowed?
Where both buyer and seller are non-residents, payment may be made offshore. Two important caveats:
- “Resident/non-resident” status must follow the definitions in the Ordinance on Foreign Exchange — it cannot be assumed simply from nationality or headquarters location;
- Vietnamese tax obligations on the capital transfer still arise independently — paying offshore does not extinguish tax liability in Vietnam.
This is not an absolute rule for every structure — each deal needs its own assessment.
7. Assurance for outward remittance after the deal
Conversely, Article 11 of the Law on Investment 143/2025/QH15 guarantees that, after fully performing financial obligations to the State of Vietnam, foreign investors may remit abroad their investment capital, profits and lawful assets. This is the legal basis for buyers to be confident about capital withdrawal and profit repatriation after M&A.
8. Note: Circular 17/2026/TT-NHNN simplifies procedures
Circular 17/2026/TT-NHNN (effective from 25 July 2026) has simplified a number of foreign exchange procedures. When preparing payment files for a current deal, parties should check this circular directly to apply the latest procedures.
Frequently asked questions
Q: Is a DICA mandatory when buying shares in a Vietnamese company?
A: It depends on the post-closing ownership structure. Under Article 3(2) of Circular 06/2019/TT-NHNN, the 51% charter-capital threshold separates direct investment capital accounts (DICA) from indirect investment capital accounts (Circular 05/2014).
Q: Can the purchase agreement state the price in USD?
A: No — under Circular 32/2013/TT-NHNN, pricing and payment in foreign currency are prohibited within Vietnam. The agreement states the price in VND, with conversion through a bank.
Q: If both parties are offshore and pay offshore, is Vietnamese tax still due?
A: Yes — Vietnamese tax obligations on the capital transfer arise independently and do not depend on where payment is made.
Q: After closing, is profit repatriation guaranteed?
A: Yes — Article 11 of the Law on Investment 143/2025/QH15 guarantees foreign investors may remit capital, profits and assets abroad after performing their financial obligations.
Legal sources
- Ordinance on Foreign Exchange 28/2005/PL-UBTVQH11 (amended 2013); Decree 70/2014/ND-CP;
- Circular 06/2019/TT-NHNN — direct and indirect investment capital accounts (status as of 14 October 2026: in effect); Circular 05/2014/TT-NHNN;
- Circular 32/2013/TT-NHNN — restrictions on foreign currency use within Vietnam;
- Circular 17/2026/TT-NHNN (effective 25 July 2026) — simplified foreign exchange procedures;
- Law on Investment 143/2025/QH15, Article 11 — assurance of outward asset transfer.
See also: FLAT Law Firm
Contact us
FLAT Law Firm advises on payment structuring for cross-border M&A: determining the correct capital account type, preparing the bank documentation package, registering transactions with the SBV and complying with capital-transfer tax obligations. Contact: contact us.
This article is for general information only and does not constitute legal advice for your specific situation.
Transparency note: This article was prepared by our editorial team with quality assurance (QA) support from the AI Legal Council; it has not been reviewed or approved by a human lawyer.