Holding 96–98% is not “done”: a few scattered holders — ex-employees, early angel investors — keep the remainder and either refuse to sell or demand a sky-high price. Unlike many systems, Vietnam has no statutory squeeze-out for unlisted companies, so the puzzle must be solved by negotiation and contract design.
Legal basis
- Law on Enterprises 59/2020/QH14
- Civil Code 91/2015/QH13
No statutory squeeze-out: accept the starting fact
The Law on Enterprises 59/2020/QH14 gives no majority shareholder a unilateral right to compulsorily buy out the minority merely for holding an overwhelming stake (a “90%+ forces out the rest” mechanism does not exist for ordinary joint stock companies). Pressure tactics — resolutions, retroactively hostile charter amendments, dividend starvation — risk annulment and suit. The only lawful routes: a negotiated purchase, or triggering machinery pre-agreed in the SHA/charter (drag-along, a priced call option).
Valuing the rump: untying the “sky-high price” knot
Price fights usually come from two different yardsticks: the minority prices the “last piece of the puzzle” strategically, the majority pays only pro-rata value. Practical untying: jointly appoint one independent valuation firm and pre-commit to the method (net asset value, discounted cash flow, or comparable multiples); give the valuation a single shared information pack; and structure payment flexibly (part upfront, instalments with security) to narrow the perception gap. Where the holder is an ex-employee, bundle a full release of residual employment/financial claims into the deal.
Mopping up gradually, and preventing a repeat
If an immediate buy-out fails: acquire piecemeal when chances arise (inheritances, holders needing cash), and lock the future with a forward sale or a timed call option. The long-term lesson for any new venture is to build into the SHA from day one: drag-along for whole-company sales, buy-back mechanics for small disengaged holdings (leaver provisions), and a single agreed valuation formula. Getting to 100% is a day-one design task, not a last-day pressure task.
Frequently asked questions
Negotiation?
No — for an ordinary Vietnamese joint stock company there is no statutory squeeze-out letting an overwhelming majority compulsorily acquire the rest. A forced sale works only where the SHA/charter already binds that holder through a drag-along or call option; otherwise the only route is a negotiated purchase.
Price?
Prefer a pre-agreed neutral mechanism: one independent valuation firm, the valuation method fixed in writing, and a single information pack for both sides. If a gap remains, a two-part price (a fixed element plus an earn-out on future results) can bridge expectations.
Not selling?
Risks include: claims over resolutions prejudicial to the minority, demands for fair dividend/distribution treatment, and — in third-party deals — small holders using pre-emptive rights or charter transfer restrictions to block the transaction. Every mop-up should start with a legal review of the current charter.
Forcing?
Put a drag-along and a call option with a clear pricing formula into the SHA at formation/investment, plus leaver provisions and rules for employee shares on departure. That is the only way the 100% question is answered by contract rather than by dispute.
This article has been quality-reviewed by the FLAW AI Legal Council