Scenario: a Thai investor bought 65% of a Vietnamese minimart chain. After payment, discovery: the retail distribution sector caps foreign ownership at 51%. Money paid, papers signed — how to fix it without losing everything?
Step 1: pin down the exact room number
Don’t panic — first pin the foreign room for each specific business code the chain registers. Retail distribution sits in the conditional-access list under the 2025 Law on Investment 143/2025/QH15 (effective 01/3/2026, replacing Law 61/2020). But sub-sectors differ, and Vietnam’s WTO/FTA schedules (Thailand holds multiple FTAs with Vietnam) may grant a different room than the “default”. Get lawyers to check the specific schedules — the “heard” 51% may not be the final legal number.
In parallel, check the company charter: did the company set a foreign room below the legal level? Use the lowest across sources as the working benchmark.
Step 2: handle the excess portion
The over-room shares cannot be kept — they must go to an eligible party (domestic investors or foreigners with remaining room). Options:
- Sell back to the seller: negotiate a buyback of the excess at the paid price (or agreed price) — the initial misinformation (“just sign, no problem”) partly sits with them.
- Sell to a domestic investor: find a Vietnamese partner for the excess — fixing the room while gaining a local ally.
- Restructure via shareholders’ agreement: while awaiting transfer, agree to restrict voting rights of the excess portion to avoid being deemed to “hold and exercise” over-room rights.
Step 3: face the sanctions
Over-room investment can draw administrative penalties in the investment domain plus forced divestiture of the excess. Voluntary reporting and remediation before inspectors find it is always lighter than being caught. Keep the full good-faith file: legal opinions sought, correspondence with the seller, the excess-transfer timeline.
The second trap: ENT when expanding the chain
Even with the room fixed, remember the Economic Needs Test (ENT): a foreign investor’s first retail outlet needs no ENT, but the second outlet onward must pass ENT under WTO commitments (previously Decree 09/2018, now Decree 342/2026/ND-CP effective 18/10/2026). Buying a minimart chain with dozens of existing points without ENT-reviewing each is buying a basket of legal risk.
Frequently asked questions
Is an over-room retail purchase voided?
The excess portion won’t be approved for transfer and may face forced divestiture; the whole deal may be revisited for market-access breaches. Proactively handle the excess before inspection.
How is the excess share portion handled?
Transfer to an eligible party (domestic investors or foreigners with room): sell back to the seller, sell to a Vietnamese partner, or restructure via shareholders’ agreement pending transfer.
Are there fines for exceeding the room?
Administrative penalties in the investment domain plus forced divestiture are possible. Voluntary remediation before discovery counts as mitigation.
Does opening a supermarket chain need ENT review?
A foreign investor’s first retail outlet needs no ENT; the second onward requires the Economic Needs Test under WTO commitments (now Decree 342/2026/ND-CP).
This article has been quality-reviewed by the FLAW AI Legal Council Content prepared by the AI Legal Council of FLAT Law Firm for general reference only; it has not been reviewed by a human lawyer for your specific situation.