Many foreign investors associate competition review (antitrust) only with billion-dollar deals in the international press, and are surprised to learn that a mid-sized acquisition in Vietnam can also require an economic concentration notification before it may be implemented. Vietnamese competition law does not examine the buyer’s intent or nationality: it examines objective thresholds of assets, revenue, transaction value and market share in the Vietnamese market. Touching any one threshold triggers the filing duty, and implementing a deal before the review outcome can expose the transaction to penalties, even to measures restoring the original state. This article sets out the current threshold system, the review process and timelines, and how to place competition review into the deal timetable as a true condition precedent.
The four notification thresholds: touching one means filing
Under Competition Law No. 23/2018/QH14 and Decree No. 35/2020/ND-CP, enterprises participating in an economic concentration (including acquiring a business or a part of a business sufficient for control) must notify the National Competition Commission before implementation if the transaction touches any of the thresholds determined on the financial year immediately preceding the notification year: (i) total assets of the participating enterprises in the Vietnamese market of VND 3,000 billion or more; (ii) total sales revenue or purchase revenue of the participating enterprises in the Vietnamese market of VND 3,000 billion or more; (iii) transaction value of the concentration of VND 1,000 billion or more; or (iv) combined market share of the participating enterprises in the relevant market of 20 percent or more. Three technical points investors commonly miscompute. First, the asset and revenue thresholds are calculated on the Vietnamese market scope and aggregated across participating parties (the buyer side including the buyer’s group as the decree determines), not on the target alone — a small acquisition vehicle can still touch a threshold through its parent group’s scale. Second, the transaction value threshold looks at the deal itself, independent of party size: a VND 1,000 billion deal triggers the duty on its own. Third, market share is computed on the “relevant market” defined by product and geography — a small deal inside a narrow niche can still reach 20 percent even where every money figure is low.
The review process, waiting time, and consequences of “buy first, file later”
After a complete and valid notification file is submitted, the National Competition Commission conducts a preliminary review within 30 days: most transactions without competition issues receive their result at this stage and may proceed. Transactions showing signs needing deeper examination move to an official review, with a 90-day period extendable by no more than 60 days, whose outcomes can be approval, conditional approval (with remedies such as behavioural commitments or partial divestment), or prohibition. In the deal timetable, competition review must be set as a condition precedent with a long-stop date long enough for the official review scenario, and the parties should agree in advance who bears the remedy risk (if the competition authority demands remedies changing the deal’s nature, which side may withdraw).
The consequences of not notifying, or of implementing a prohibited concentration, have two layers. The administrative layer: the enterprise can be fined as a percentage of total revenue in the relevant market under Decree No. 75/2019/ND-CP on competition sanctions, together with consequence-remedying measures. The more serious transaction layer: an unlawfully implemented concentration can be subjected to measures restoring the original state or splitting the combined enterprise — that is, the risk is not only a fine but the unwinding of the deal itself. In every foreign-invested deal in Vietnam, therefore, checking the four thresholds belongs in legal diligence from the start, and “the deal is small so it should be fine” is not an acceptable conclusion before the buyer group’s own figures have been tested against each threshold.
Merger notification check for a Vietnam M&A deal
- Test all four Decree 35/2020 thresholds on prior financial year figures: assets VND 3,000 billion, revenue VND 3,000 billion, deal value VND 1,000 billion, combined market share 20 percent.
- Aggregate on the Vietnamese market scope of the buyer AND the buyer’s group, not only the target company.
- Define the relevant market (product times geography) for the share test — a narrow niche can reach 20 percent on a small deal.
- Place competition review into the CPs with a long-stop covering the 90-day official review plus the 60-day extension; pre-agree remedy risk.
- Never implement the transaction before the notification outcome where a threshold is touched.
Frequently Asked Questions
Buying a Vietnamese company — must it be reported to the competition authority?
Only where the transaction touches one of the notification thresholds under the 2018 Competition Law and Decree No. 35/2020/ND-CP: participating enterprises’ total assets in the Vietnamese market of VND 3,000 billion or more, total Vietnamese-market revenue of VND 3,000 billion or more, transaction value of VND 1,000 billion or more, or combined market share in the relevant market of 20 percent or more (on the preceding financial year’s figures). The buyer’s foreign nationality is not a criterion — scale and market share are. Most mid-sized and small deals below every threshold need no filing, but that conclusion must come from testing real figures, including the buyer group’s figures.
At what revenue threshold is notification mandatory?
The revenue threshold is one of four independent thresholds: total sales revenue or purchase revenue in the Vietnamese market of the participating enterprises reaching VND 3,000 billion or more in the financial year preceding the notification year. Note the computation: it is the participating parties’ aggregated revenue in the Vietnamese market (the buyer side counted at group scope as regulated), not the target company’s revenue alone; and touching ANY ONE of the four thresholds (assets, revenue, transaction value, market share) is enough for the filing duty to arise.
What is the fine for buying without notifying?
An enterprise breaching the economic concentration notification duty can be fined as a percentage of total revenue in the relevant market in the preceding financial year under Decree No. 75/2019/ND-CP, together with consequence-remedying measures; and at the more serious level, competition law allows measures such as restoring the original state for an unlawfully implemented concentration. The greatest risk is therefore not the fine figure but the danger of the completed deal itself being unwound — which is why threshold review is a mandatory item of legal diligence in every deal.
How long does competition approval take?
After a valid notification file is received, the preliminary review runs 30 days and most transactions without competition issues end at this stage. A transaction needing deeper examination moves to an official review with a 90-day period, extendable by no more than 60 days under the 2018 Competition Law. For planning purposes, a buyer should allow a window from about one month for a clean deal to about five months for a deal going through official review, and set the purchase agreement’s long-stop date accordingly so it is not trapped between a signed contract and a pending approval.
This article has been quality-reviewed by the FLAW AI Legal Council