A fund wants to acquire 60% of a half-built industrial park project and split the clean, undeveloped land portion into a separate project. The seller asks: is a partial transfer allowed, who screens the buyer, and how is tax computed? Under the 2025 law, project transfer — whole or partial — is a permitted but controlled transaction, supervised through three layers: transferee conditions, investment adjustment procedure, and tax obligations.
Transferee conditions: must qualify like a new investor
A project transfer is possible only where the project is eligible for transfer (not under recovery, not under unremedied violation handling, and not prohibited by sector-specific conditions such as defence and security), and the transferee fully meets the investment conditions applying to that project: market-access conditions if a foreign investor, conditional business-line requirements, and financial capacity to continue the project on its committed schedule.
For projects with strategic-investor conditions or policy approval at a high level, an investor change may need to return to the level that approved the policy — this must be checked in the project’s own policy decision, not assumed from market habit.
Partial transfer and project splits: allowed, but the split must be clean
The law permits transferring part of a project together with splitting the original project into independent projects where the split-out portion has determinable land boundaries, assets and technical documentation. Each post-split project has its own investment registration certificate, its own schedule obligations and its corresponding land portion recorded separately in the land dossier.
Appraisal practice typically snags on three points: which project manages shared infrastructure (internal roads, substations, wastewater treatment) and how costs are shared; how the project performance security deposit is allocated among the post-split projects; and whether the original project’s incentives are inherited by each split project on the original conditions. All three need a written plan in the transfer dossier, not verbal side agreements.
Buyer screening in project M&A: what the authority examines
Where an investor change entails IRC adjustment, the investment registration authority appraises the transfer dossier: the in-principle contract/transfer agreement, the transferee’s legal documents and capacity, and the plan to continue implementing the project. Where the transferee is a foreign investor, the share/capital-contribution registration at the project company level (if the deal is structured at company level) runs in parallel under indirect-investment and market-access rules.
Appraisal time and outcome depend heavily on the quality of the buyer’s capacity file: audited financials, proof of funds, similar-project experience and schedule commitments. A newly formed fund buyer with no operating history should prepare parent-level guarantee structures from the negotiation round.
Tax obligations of the parties
At project level, a project transfer conveys rights and obligations under the project and is taxed by the transaction’s substance (transfers of real estate/projects attached to land carry corresponding tax and fee obligations upon change registration). At shareholder level, a foreign organisation’s gain on capital transfer is subject to corporate income tax on capital-transfer income (20% on the gain) under CIT Law 67/2025/QH15 and Decree 320/2025/ND-CP, declared and paid through the Vietnamese side under the prescribed mechanism.
Allocation of tax burdens between seller and buyer is a key negotiation clause in the transfer contract: who bears transfer tax, who bears dossier-correction costs, and withholding/price-adjustment conditions if the tax authority re-determines the transaction price. Related-party transactions must additionally comply with transfer-pricing rules (Decree 255/2026/ND-CP) with market-price documentation.
Frequently Asked Questions
What conditions must a project transferee meet under the new law?
The transferee must fully satisfy the project’s investment conditions: market-access conditions (if foreign), conditional business-line requirements, and financial capacity to continue on the committed schedule. Projects under recovery, unremedied violation handling or transfer prohibition cannot be transferred.
For a partial transfer, how are the IRC split and land handled?
Permitted where the split portion has determinable land boundaries, assets and technical files: the original project is split into independent projects, each with its own IRC and separately recorded land portion. The dossier needs a written plan for shared infrastructure, allocation of the performance security deposit, and incentive inheritance.
How is the buyer screened in project M&A?
The registration authority appraises the transfer contract, the transferee’s legal status and financial capacity, and the continuation plan; foreign transferees also go through capital-contribution/share-purchase registration. The capacity file (audited financials, proof of funds, experience, schedule commitments) drives appraisal speed.
What are the parties’ tax obligations in a project transfer?
Project level: taxes and fees by transaction substance attached to land upon change registration. Shareholder level: a foreign organisation’s capital-transfer gain bears 20% CIT on the gain under CIT Law 67/2025 and Decree 320/2025, declared via the Vietnamese side. Tax allocation is a core negotiation clause; related-party deals must comply with Decree 255/2026 on transfer pricing.
This article has been quality-reviewed by the FLAW AI Legal Council
