Merging Foreign-Invested Enterprises in Vietnam — Procedures and IRC Handling

Mergers are a familiar restructuring tool for FDI groups: combining two subsidiaries into one to streamline operations, or merging a target company after an M&A deal. For foreign-invested enterprises, however, a merger is not just a business registration procedure — it also requires handling the Investment Registration Certificate (IRC) and checking market access conditions.

1. What is a merger?

Under clause 1, Article 201 of the Law on Enterprises 2020 (59/2020/QH14): one or more companies (the merged companies) merge into another company (the surviving company) by transferring all assets, rights, obligations and lawful interests to the surviving company, while terminating the existence of the merged companies.

A notable change from the old law: current law does not require merging companies to be of the same type. Distinguish from consolidation (two companies forming a brand-new company, with both ceasing to exist).

2. Three-step procedure (clause 2, Article 201)

Step 1 — Preparation: the companies prepare a merger contract and a draft charter of the surviving company. The merger contract must cover: names and head office addresses of the parties; merger procedures and conditions; the employee arrangement plan; the method, procedures, timeline and conditions for converting assets, capital contributions, shares and bonds of the merged companies into those of the surviving company; and the merger implementation timeline.

Step 2 — Approval: members, owners or shareholders of the companies approve the merger contract and the surviving company charter, and proceed with business registration. The merger contract must be sent to all creditors and notified to employees within 15 days of approval.

Step 3 — Termination: once the surviving company completes business registration, the merged companies cease to exist.

3. Registration dossier and the 65% exemption

The dossier for registering changes to the surviving company business registration follows Decree 168/2025/ND-CP, plus:

Update note: Decree 296/2026/ND-CP (effective 23 July 2026) has amended Decree 168/2025/ND-CP on enterprise registration. Notable new points: prohibition of nominee shareholding for enterprise establishment; electronic authentication in enterprise registration; beneficial owner identification (25% threshold).

• The merger contract;
• Resolutions, decisions and meeting minutes approving the merger contract of the surviving company;
• Resolutions, decisions and meeting minutes approving the merger contract of the merged companies — except where the surviving company is a member/shareholder owning more than 65% of charter capital (LLC, partnership) or voting shares (joint-stock company) of the merged company.

This 65% exemption is especially useful for intra-group mergers where the parent already controls the subsidiary.

4. IRC handling after the merger — the FDI angle

The most overlooked point for FDI enterprises:

• Investment projects of the merged companies transfer to the surviving company, requiring an investment project adjustment procedure (investor change) under the Law on Investment 2025 and Decree 96/2026/ND-CP;
• If the surviving company operates in sectors subject to market access conditions for foreign investors, re-check market access conditions;
• If the merger changes the foreign ownership structure (e.g., crossing the above-50% threshold), capital contribution/share purchase registration under Article 21 of the Law on Investment 2025 may arise.

5. Employees, creditors and competition

• Employees: the employee arrangement plan is a mandatory merger contract item; merged company employees transfer to the surviving company with labor contracts inherited;
• Creditors: must receive the merger contract within 15 days — creditor rights are legally protected, and the surviving company inherits debt obligations;
• Competition: if the deal creates significant market share in a relevant market, economic concentration notification under the Competition Law 2018 may be required — assess early before signing.

6. FDI merger checklist

1. Legal due diligence on both companies: IRC, ERC, land, debts, labor;
2. Draft the merger contract and charter (all 6 mandatory content groups);
3. Approvals at each party (note the 65% exemption);
4. Send the contract to creditors and notify employees within 15 days;
5. Register business changes for the surviving company;
6. Adjust the IRC/investment project; check market access;
7. Assess economic concentration notification duties;
8. Finalize: merged company termination, books, seals, accounts updated.

Prepared by the FLAW AI Legal Council. This content is pending QA Council review before submission for approval.