When considering acquiring a company in Vietnam, many investors' first question is: what is the legal difference between buying 51% vs 100% of a Vietnamese company? The 51% figure is often casually understood as "control," but Vietnamese law is not that simple. This article answers the 9 most common questions, comparing the two options directly across four dimensions: control rights, legal procedures, taxation, and risks.
Quick comparison: buying 51% vs buying 100%
| Criterion | Buying 51% | Buying 100% |
|---|---|---|
| Passing ordinary resolutions (joint-stock company) | Yes (over 50% of voting shares present at the meeting) | Yes — decides alone |
| Passing ordinary resolutions (multi-member LLC) | Not enough (needs 65% of capital present at the meeting) | Yes — decides alone |
| Strategic matters (charter amendments, reorganization, dissolution) | Needs 65%–75%; the 49% holder can veto | Decides alone |
| Capital contribution/share purchase registration with the investment authority (foreign investors) | Must register in advance | Must register in advance |
| Seller's tax burden | The same — depends on whether the seller is an organization or an individual | The same |
| Internal deadlock risk | High — depends on the charter and the 49% partner | None |
Frequently asked questions
Does buying 51% of a Vietnamese company mean holding control of the company?
Short answer: Not necessarily. "51% equals control" is only partly true — it depends on the company type and each company's charter.
Explanation: In a joint-stock company, a 51% shareholder can pass ordinary resolutions such as business plans, financial statements, and electing the Board of Directors, because the law only requires over 50% of the voting shares of attending shareholders to approve. But for strategic matters — amending the charter, changing business lines, changing the management structure, investment projects or asset sales worth 35% or more of total asset value, reorganization or dissolution — at least 65% of voting shares must approve. In that case, the remaining 49% holder can veto outright.
In a multi-member limited liability company, the situation is even tighter: a resolution of the Members' Council is passed only when approved by attending members holding at least 65% of total charter capital; decisions on selling assets worth 50% or more of total asset value, amending the charter, reorganization or dissolution require 75%. In other words, a buyer of 51% of charter capital cannot pass any resolution on its own if the 49% holder disagrees or is absent — unless the company's charter provides a different ratio.
Legal basis: clauses 1 and 2 of Article 148 and clause 3 of Article 59 of the Law on Enterprises No. 59/2020/QH14.
Practical note: Never assume "51% equals control" without reading the target company's charter. The charter may set voting ratios different from the statutory defaults (not lower than the statutory minimums) or even grant a specific member veto rights. This is a mandatory item in pre-signing due diligence.
How does buying 100% of a company differ from buying 51% in terms of decision-making power?
Short answer: Buying 100% means becoming the sole owner and deciding everything alone — no meetings, no voting, no one who can veto.
Explanation: The owner of a single-member limited liability company has full decision-making power: the content of and amendments to the charter; development strategy and annual business plans; the management structure, and the appointment, dismissal, and removal of managers and controllers; development investment projects; approval of large-value loan, lending, and asset sale contracts; approval of financial statements; increasing charter capital, transferring capital, issuing bonds; establishing subsidiaries and contributing capital to other companies; using after-tax profits; reorganization and dissolution of the company and recovering all asset value upon completion of dissolution. After buying 100%, the company is typically converted into a single-member limited liability company, and every decision is expressed through the owner's decision — far simpler than having to convene a General Meeting of Shareholders or a Members' Council.
Legal basis: Article 76 of the Law on Enterprises No. 59/2020/QH14.
Practical note: Full power comes with full responsibility. The sole owner must ensure full contribution of charter capital within 90 days, be liable for the company's debts and asset obligations within the charter capital, and keep personal assets separate from company assets to avoid the risk of personal liability in transactions with the company.
Must a foreign investor buying 51% or 100% register with the investment registration authority before changing members or shareholders?
Short answer: Yes. In both cases, the foreign investor must complete capital contribution/share purchase registration before changing members or shareholders.
Explanation: The law requires foreign investors to register before changing members or shareholders in one of three cases. The most common is when the purchase results in the foreign investor holding over 50% of the charter capital of the economic organization — including increasing ownership from at or below 50% to above 50% (buying 51%) and increasing the ratio when the foreign investor already holds over 50% (for example, raising from 51% to 100%). The other two cases requiring registration are: the purchase increases the foreign investor's ownership ratio in an economic organization operating in business lines subject to market-access conditions for foreign investors; and the economic organization holds a land use right certificate for land on islands, in border areas, coastal communes/wards, or other areas affecting national defense and security.
Beyond registration, the purchase must also satisfy three groups of conditions: market-access conditions for foreign investors, national defense and security safeguards, and land law regulations.
Legal basis: clauses 2 and 3 of Article 21 of the Law on Investment No. 143/2025/QH15.
Practical note: Make registration approval a condition precedent in the transfer agreement. Even a transaction between two foreign investors, if it increases the ownership ratio, may still fall within the registration requirement — do not skip it just because "both parties are foreigners."
How long does a foreign investor's capital contribution/share purchase registration take, and what does the dossier include?
Short answer: 10 working days from receipt of a valid dossier for ordinary cases; the dossier comprises four main groups of documents.
Explanation: The registration dossier includes: the written registration of capital contribution, share purchase, or capital contribution portion purchase — stating the enterprise registration information of the economic organization, business lines, the list of owners/members/shareholders, the foreign investor's charter capital ownership ratio before and after the purchase, the expected transaction value of the contract, and information about the investment project (if any); documents on the legal status of the buyer and of the economic organization; the agreement in principle on the capital contribution, share purchase, or capital contribution portion purchase; and information evidencing land use rights for state authorities to look up (for land in areas affecting national defense and security). Notably, the registration document must now declare the contract's "actual transaction value" — a new rule effective 1 July 2025 aimed at increasing transparency of transfer prices.
On timing: the investment registration authority reviews and notifies the investor within 10 working days of receiving a valid dossier. For economic organizations holding land use rights in areas affecting national defense and security, the investment registration authority must seek opinions from the provincial Military Command and the provincial Public Security within 02 working days; those two agencies have 05 working days to respond (silence past the deadline is deemed consent); and the investment registration authority notifies the result within 10 working days.
Legal basis: Article 76 of Decree No. 96/2026/ND-CP; clause 3 of Article 124 of Decree No. 168/2025/ND-CP (amending Decree No. 31/2021/ND-CP on declaring actual transaction value).
Practical note: Prepare the dossier in parallel with legal due diligence to save time. Legal documents of foreign organizations and individuals usually require consular legalization and notarized Vietnamese translation — the step most likely to delay the timeline if not prepared early.
What taxes must the seller pay when transferring 51% or 100% of capital?
Short answer: The seller must pay income tax on the capital transfer. The tax level does not depend on whether 51% or 100% is sold, but on whether the seller is an organization or an individual.
Explanation: Where the seller is an organization: income from transferring part or all of invested capital (including selling the entire enterprise) is subject to corporate income tax at 20% on the income — i.e., the transfer price minus cost and related expenses. This income is not eligible for CIT incentives. Tax is declared per occurrence using form 05/TNDN, with the filing deadline no later than the 10th day from the date the tax obligation arises. If the seller is a foreign organization without a presence in Vietnam, the transferee (or the Vietnamese company in which the foreign organization invested) is responsible for declaring and paying on the seller's behalf.
Where the seller is an individual transferring a capital contribution portion in a limited liability company: personal income tax of 20% on taxable income, where taxable income equals the transfer price minus the purchase price and related reasonable expenses; the timing point is when the transfer contract takes effect. Where an individual transfers shares in a joint-stock company: 0.1% on the transfer price of each transfer — payable even when selling at a loss. From 1 July 2026, the PIT Law 2025 adds a rule: if the purchase price and related expenses cannot be determined, tax is calculated at 2% of the transfer price.
One important common point: capital transfer activities are not subject to value-added tax.
Legal basis: Article 14 and clause 3 of Article 19 of Circular No. 78/2014/TT-BTC; point b of clause 1 and point b of clause 2 of Article 11 of Circular No. 111/2013/TT-BTC (as amended by Article 16 of Circular No. 92/2015/TT-BTC); clause 2 of Article 13 of the PIT Law No. 109/2025/QH15; point d of clause 8 of Article 4 of Circular No. 219/2013/TT-BTC.
Practical note: The transfer price in the contract, the price declared in the capital contribution/share purchase registration dossier, and the price used for tax calculation must be consistent — the tax authority may impose tax if the transfer price is abnormally low compared to market price. If the seller is a foreign organization, also check the double taxation avoidance agreement between Vietnam and the seller's country, as the treaty may limit Vietnam's taxing rights over capital transfer income.
After the purchase, what procedures must the buyer complete?
Short answer: Four main tasks: enterprise registration change notification, full capital contribution within 90 days, beneficial owner declaration, and completing related tax obligations.
Explanation: First, the enterprise must notify changes to enterprise registration content within 10 days of the change. For a joint-stock company changing foreign-investor shareholders, written notice must be sent to the business registration authority where the head office is located within 10 days; the business registration authority reviews and effects the change within 03 working days.
Second, the buyer as the new member/shareholder must ensure full contribution of the committed capital portion within 90 days of being granted the enterprise registration certificate (for capital increase cases) or as committed in the transfer agreement.
Third, if after the transaction the buyer directly or indirectly owns 25% or more of charter capital or total voting shares, or has the right to control the enterprise, the enterprise must declare beneficial owner information; any change must be notified to the provincial business registration authority within 10 days.
Fourth, if the seller is a foreign organization, the buyer or the Vietnamese company is responsible for declaring and paying CIT on the capital transfer on the seller's behalf within 10 days as described in the tax question above.
Legal basis: Article 31 of the Law on Enterprises No. 59/2020/QH14; clause 2 of Article 47, clause 2 of Article 75, clause 1 of Article 113 of the Law on Enterprises No. 59/2020/QH14 (90-day period); Articles 17, 18, and 52 of Decree No. 168/2025/ND-CP; Article 14 of Circular No. 78/2014/TT-BTC.
Practical note: A foreign investor's rights and obligations as a member or shareholder are only established upon completion of the change procedures at the business registration authority. Do not rush to exercise major-shareholder rights (such as changing the legal representative) before these procedures are complete.
What rights does the remaining minority shareholder/member (49%) have to make things difficult for the 51% buyer?
Short answer: More than most people think. Vietnamese law protects minority shareholders quite strongly, and with 49% in hand, the minority can effectively veto nearly all important decisions.
Explanation: In a joint-stock company, a shareholder or group of shareholders holding 05% or more of total ordinary shares already has significant rights: to examine, look up, and make excerpts from the minutes and resolutions/decisions of the Board of Directors, mid-year and annual financial statements, reports of the Board of Controllers, and contracts and transactions subject to Board approval; to request convening a General Meeting of Shareholders when the Board of Directors seriously violates shareholder rights or makes decisions beyond its authority; to request the Board of Controllers to inspect specific matters related to the company's management and administration. With 49%, the minority not only has these rights but can also block every resolution requiring 65% of voting shares — i.e., all strategic matters from charter amendments and capital increases to mergers and dissolution.
In a multi-member limited liability company, the power of 49% is even greater: because the approval threshold is 65% (or 75% for special matters), the 49% holder can block nearly every Members' Council decision without its consent. In addition, when an LLC member wishes to transfer its capital contribution portion to an outsider, the remaining members have a statutory pre-emptive right to purchase.
Legal basis: clause 2 of Article 115, clause 1 of Article 148, and clause 3 of Article 59 of the Law on Enterprises No. 59/2020/QH14.
Practical note: The transfer agreement (SPA) for a 51% deal must include buyer protections: the seller's covenants to cooperate in voting for a defined period, deadlock-resolution mechanisms such as a buy-sell right over the other party's stake under a pre-agreed valuation formula, and non-compete clauses. If this internal risk cannot be controlled, buying 100% from the outset is often the safer choice.
When should you buy 51%, and when should you buy 100%?
Short answer: Buy 51% when you need a local partner; buy 100% when you need full decision-making power and want to eliminate internal risk.
Explanation: Consider buying 51% where: you need the Vietnamese partner's capabilities, licenses, networks, or market understanding — especially in sectors where a local partner is a condition for effective operation; the business line is subject to market-access conditions for foreign investors and the presence of a domestic investor simplifies compliance; you want to share capital risk in the early market-entry phase; or the existing partner is the actual operator you want to retain.
Buy 100% where: you need full power over strategy, restructuring, mergers, demergers, or dissolution without anyone's veto; you want simpler governance — no General Meetings of Shareholders, no negotiations with minority partners; you plan a future exit or onward transfer and need maximum flexibility; or due diligence shows that internal dispute risk with the existing partner is unmanageable.
One often-missed point: buying 51% today and raising to 100% later is not simply "topping up" — increasing the ownership ratio when already holding over 50% still falls within capital contribution/share purchase registration under investment law. If no suitable target company can be found, setting up a new legal entity from scratch is the alternative — see the full process for setting up an FDI company in 2026.
Legal basis: point b of clause 3 of Article 21 of the Law on Investment No. 143/2025/QH15; Articles 59, 76, and 148 of the Law on Enterprises No. 59/2020/QH14.
Practical note: The 51%-vs-100% decision should not rest on a gut feeling about "control" but on comprehensive legal due diligence: the company charter, actual ownership structure, existing shareholder agreements, debt obligations, and potential disputes. For high-value deals, due diligence costs are always far cheaper than a prolonged internal dispute.
What legal risk is most often overlooked when buying only 51%?
Short answer: Voting deadlock and "hidden veto rights" buried in the target company's old charter.
Explanation: The biggest risk is not in what the law says, but in what the target company's charter has said all along. Many Vietnamese companies have charters setting voting ratios for passing resolutions higher than the statutory minimums, or granting a specific member or shareholder veto rights over certain matters. Without careful charter review before signing, the 51% buyer may find itself "tied up" inside the very company it controls.
The second risk is governance deadlock: when the 51% and 49% sides disagree on strategy and neither has enough votes to pass decisions at the 65%–75% thresholds, the company becomes paralyzed — unable to increase capital, merge, or amend its charter. Prolonged internal disputes cost not only legal fees but also lost business opportunities and enterprise value.
The third, less-noticed risk: buying 51% still means bearing 51% of the company's past risks — unrecorded debts, guarantees for third parties, labor disputes, potential tax liabilities, undiscovered administrative violations. The ownership ratio does not reduce the due diligence obligation.
Legal basis: Articles 59 and 148 of the Law on Enterprises No. 59/2020/QH14 (voting thresholds); general principles on members' and shareholders' liability within their contributed capital.
Practical note: Immediately after closing, amend the company charter to reflect the new ownership structure and add deadlock-resolution mechanisms: buy-sell rights over the other party's stake, "drag-along" and "tag-along" provisions, or arbitration for internal disputes. If due diligence reveals the old charter contains too many irremovable "traps," seriously consider buying 100% instead of 51%.
Conclusion
Buying 51% and buying 100% of a Vietnamese company differ fundamentally on one point: 51% gives you the right to participate in control, while 100% gives you absolute decision-making power. With 51%, you still go through investment registration procedures as when buying 100%, face the same seller-side capital transfer tax framework, yet confront the 65%–75% voting thresholds and the 49% minority's de facto veto. With 100%, you eliminate internal risk entirely but must prepare the resources and responsibilities of a sole owner.
Which choice is right depends on each investor's strategy — but that choice is only safe when built on full legal due diligence: the company charter, ownership structure, tax obligations, and registration procedures under the Law on Investment 2025. If you are considering an acquisition in Vietnam, contact FLAT Law Firm at hotline 0988424851 for advice on deal structuring, legal due diligence, and safe completion of procedures.
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