| Criterion | Project merger (this article) | Project transfer (existing article) |
|---|---|---|
| Parties | THE SAME investor | CHANGE of investor (new buyer) |
| Legal basis | Art. 59, Decree 96/2026/ND-CP | Art. 57, Decree 96/2026/ND-CP |
| Post-deal incentives | Art. 20.6(c), Decree 96: per each pre-merger project, for the remaining term | Art. 20.6(a), Decree 96 |
| New incentives available? | NO — the merged project is not a “new investment project” | Under the transfer mechanism |
Short answer: Two projects of the same investor may be merged into one project under Article 33.1 of the 2025 Investment Law (Law 143/2025/QH15, effective 01/3/2026), with the procedure in Article 59 of Decree 96/2026/ND-CP (effective 31/3/2026). A typical scenario: one investor holds two projects — one enjoying tax incentives, one not — and wants to combine them to streamline management. This article answers two questions: what is the procedure, and how are incentives handled.
Note: this article covers merger (same investor). If the project changes hands — sold to a new investor — that is a project transfer under Article 57, with a different incentive mechanism (see our article “FDI Project Transfer: Are Import Tax Incentives Retained?”). Citing Article 20.6(a) for a merger case is legally wrong.
1. Definition and threshold condition: it must be the same investor
Article 59.1(b) of Decree 96/2026 defines merger as merging one or more investment projects of that investor into an investment project of the same investor. The threshold condition: no change of ownership — both the merged project and the surviving project belong to the same investor. Any change of ownership turns the deal into an Article 57 transfer, not an Article 59 merger.
The merger must also meet the two conditions in Article 59.2: (i) meeting land-use conditions under land law and business investment conditions (if any); (ii) no change to the “investor conditions” recorded in the approval document or certificate before the merger.
2. Procedure: project adjustment (Art. 59.3) — three branches
Like a split, a merger follows the investment project adjustment procedure:
- Branch A — Project with investment policy approval: adjust the policy approval under the authority rules in Articles 52, 53, 54 of Decree 96/2026;
- Branch B — Project with an investor approval decision: under Article 55 of Decree 96/2026;
- Branch C — Project with an investment registration certificate: adjust the certificate under Article 56 of Decree 96/2026.
The investor files one dossier set plus an electronic copy with the competent investment registration agency.
3. Post-merger incentives — the core of this article (Art. 20.6(c), Decree 96)
The principle in Article 20.6(c) of Decree 96/2026:
- The merged project continues to apply the incentives under the conditions of EACH pre-merger project (if those conditions remain met);
- Projects with different incentive levels keep their own levels for the remaining term — separately, never mechanically blended into one level (not even the highest), and no reset of the incentive period;
- The merged project is NOT a “new investment project” eligible to apply for new incentives — “merge first, then apply for new incentives” is wrong.
Example: Project A has 5 remaining years of CIT incentives; Project B has none. After the merger, the part originating from A keeps incentives for the 5 remaining years, while the part from B enjoys none — separate, no blending, no fresh start.
4. Corporate income tax: inheriting incentives and unutilized losses
On corporate income tax, Decree 320/2025/ND-CP (detailing the 2025 Corporate Income Tax Law) provides that an enterprise with an investment project formed through merger, consolidation, division, split or conversion inherits the CIT incentives (including un-carried-forward losses) of the pre-merger project, if it continues to meet the incentive conditions and loss-carry-forward conditions as prescribed. Readers should check the original text of Decree 320/2025 to identify the exact article for their case.
5. Three common traps
- Citing Article 20.6(a) for a merger: wrong — point (a) applies to transfers (change of investor); mergers use point (c);
- Mechanically blending two different incentive levels into the highest one: wrong — each part keeps its own conditions, separately;
- “Merge, then apply for new incentives”: wrong — the merged project is not a new investment project.
6. Points that cannot be stated absolutely — check with the competent authority
- How to allocate the “remaining incentive period” when the two projects started enjoying incentives at different times: the law gives no universal formula — work directly with the tax authority;
- Import/export tax incentives (import duty exemption for fixed-asset formation) attached to each project goods list: check the Law on Export and Import Duties — no automatic conversion should be assumed;
- Tax accounting when two different incentive levels coexist in one merged project: governed by CIT law — this article only states the separation principle, not specific accounting methods.
FAQs
After merging two projects, can we re-apply for incentives from scratch?
No. The merged project is not a new investment project. Incentives continue under each pre-merger project conditions, for the remaining term.
Can two projects of two different subsidiaries (same parent group) merge under Article 59?
No, if the two subsidiaries are separate legal investors. Article 59 requires the same investor. Such cases must go through the transfer mechanism (Article 57) or a prior corporate restructuring.
One project has incentives, one does not — how is tax computed after the merger?
Each part follows its own conditions, separately, for the remaining term. Specific accounting when two incentive levels coexist is governed by CIT law — work with the tax authority and a tax advisor.
Legal sources
- 2025 Investment Law (Law 143/2025/QH15, effective 01/3/2026): Art. 33.1 (right to divide, split, merge, transfer investment projects).
- Decree 96/2026/ND-CP (effective 31/3/2026): Art. 59.1(b) (merger definition); Art. 59.2 (conditions); Art. 59.3 (project adjustment procedure); Art. 20.6(c) (post-merger incentives); Art. 57 (project transfer — for distinction).
- Decree 320/2025/ND-CP (detailing the 2025 Corporate Income Tax Law): principle of inheriting CIT incentives and unutilized losses upon merger (check the original text for the article number).
Running two investment projects and considering a merger to streamline management, but unsure about the procedure and post-merger incentives? Reach us via the Contact page of FLAT Law Firm for advice on investment project restructuring.
The legal content of this article is reviewed by the FLAW AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.
For reference only, not legal advice.
