A Chinese investor wants to exit Vietnam — should it sell its stake to the existing Vietnamese partner or to a third party? Each option has different implications for procedures, tax, and timing. This article compares them in detail.
1. Comparison Table
| Criterion | Sell to Vietnamese partner | Sell to third party |
|---|---|---|
| Procedures | Simpler; fewer approvals | More complex; possible M&A registration |
| Pre-emptive rights | Vietnamese partner usually holds them | Must first offer to existing partners |
| Valuation | Easier to agree (knows the business) | May fetch higher price (competition) |
| Timeline | Faster | Longer (due diligence, approvals) |
| Legal risk | Lower | Higher (new buyer, market access conditions) |
2. Selling to the Vietnamese Partner: Streamlined
Selling to an existing member/shareholder is essentially an internal capital transfer: sign the transfer contract and amend the Enterprise Registration Certificate. No M&A registration with investment authorities arises since no new foreign investor participates.
3. Selling to a Third Party: M&A Considerations
If the buyer is a new foreign investor, the deal may require registration of capital contribution / share purchase (M&A) under Article 21(3) of the Investment Law 143/2025. The buyer must satisfy market access conditions (Article 8) for conditional business lines.
For projects tied to land use rights, transfer of the investment project follows Article 34 of the Investment Law 143/2025, with procedures to amend the Investment Registration Certificate.
4. Capital Transfer Tax — 2025–2026 Updates
- Foreign enterprises transferring capital: 2% on the transfer price (Decree 320/2025) — on the gross sale price, no deduction of cost basis, even for loss-making deals.
- Vietnamese enterprises: transfer gains included in CIT-taxable income at progressive rates of 15%/17%/20% (Law 67/2025).
- Individuals: under Personal Income Tax Law 109/2025.
5. Complete Exit Steps
- Exit decision (seller’s Board/GMS).
- Valuation (independent appraiser).
- Offer to existing partners (pre-emptive rights).
- Sign transfer contract; M&A registration if applicable (sale to new foreign third party).
- Pay capital transfer tax.
- Amend ERC/IRC; remit remaining funds and profits via the ICA account.
- Tax finalization; close the tax code (if dissolving the entity).
Note: This article summarizes current regulations for reference. Specific deals need tailored tax and legal structuring — consult professionals.
Transparency: This article was researched and drafted by the AI Legal Council from original legal texts, through independent cross-checking. Content is for reference only and does not replace legal advice from a licensed lawyer.
