In every M&A deal, the Share Purchase Agreement (SPA) decides success or failure: it allocates risk between seller and buyer, and it is the buyer’s only weapon when problems surface after closing. Vietnamese law provides no standard SPA template — parties are free to agree within the Civil Code 2015 and the Enterprise Law 2020.
Below are the 15 most decisive clauses both buyers and sellers should scrutinize when negotiating an SPA.
1. Subject matter of the transfer
Define precisely: shares or capital contributions, share class (ordinary, preference), quantity, ownership ratio, securities code (if any). Any ambiguity here breeds disputes over deal scope. Note: ordinary shares of founding shareholders are transfer-restricted during the first 3 years (Article 120, Enterprise Law 2020).
2. Purchase price and price adjustment
Beyond a fixed price, large deals use adjustment mechanisms: locked-box (price fixed at a determined date), closing accounts (adjusted per financial statements at closing), or earn-out (part of the price tied to future performance). Define the formula, measurement date and independent auditor tightly.
3. Conditions precedent
Closing occurs only when conditions are met: investment-registration approval (for foreign investors subject to registration under Article 21 of Investment Law 143/2025), internal approvals (Members’ Council/General Meeting of Shareholders), third-party consents (lending banks, key contract counterparties).
4. Seller’s representations and warranties
The heart of the SPA. The seller warrants: legal standing and signing authority; lawful ownership of the shares/contributions (free of freeze or pledge); the target’s legal compliance; truthful financial statements; no undisclosed disputes, tax debts, environmental or labour violations. The more detailed the warranties, the better the buyer is protected.
5. Due diligence and information access
Regulates the buyer’s right to access the target’s books, contracts and legal files before signing and before closing. Diligence findings typically drive price renegotiation or additional warranties.
6. Interim covenants
Between signing and closing, the seller undertakes to operate the target in the ordinary course: no major asset sales, no unusual borrowing, no key-personnel changes, no above-threshold contracts — without the buyer’s written consent.
7. Indemnification
When warranties are breached, the seller compensates the buyer. Three commonly negotiated limits:
- Survival period: how long after closing claims may be brought (typically 12–24 months; 5–7 years for tax);
- Basket/de minimis: claims below a threshold are not indemnified;
- Cap: total indemnity not exceeding a proportion of the deal price.
8. Warranty and indemnity insurance
In large deals, parties may buy W&I insurance to shift warranty-breach risk to an insurer. Clarify who buys, who pays the premium, coverage scope and exclusions.
9. Non-compete and non-solicitation
The seller undertakes, for a defined period post-deal, not to compete with the target and not to poach key personnel or customers. Define geographic scope, business scope and duration clearly for enforceability.
10. Payment: escrow and deferred payment
Secure payment mechanics: deposits, escrow of part of the price with a bank/intermediary to backstop indemnity obligations, deferred instalments, or set-off rights when claims arise.
11. Closing and handover
Closing time and venue; handover checklist (seals, licences, accounting books, contracts); procedures to register member/shareholder changes and enterprise-registration amendments under Decree 168/2025/ND-CP.
12. Penalties and damages
Under Article 301 of Commercial Law 36/2005/QH11 (still in force), penalties for commercial contracts may not exceed 8% of the value of the breached contractual obligation, unless otherwise agreed within the bounds permitted by law. Beyond penalties, the breaching party must compensate damages under the Civil Code 2015.
13. Termination
Termination events (unsatisfied conditions precedent, material breach), notice procedures, and legal consequences: restitution of what was received, and whether damages may be claimed.
14. Confidentiality
Parties undertake to keep the target’s information and deal terms confidential, even if the deal collapses. Define the confidentiality period and exceptions (disclosure required by authorities or to professional advisers).
15. Governing law and dispute resolution
Choose: negotiation, then mediation, then arbitration (VIAC) or courts. For cross-border elements, consider international arbitration clauses (SIAC, HKIAC) and enforceability of awards in Vietnam.
Frequently asked questions
Must an SPA be notarized?
The law does not require notarization of share/capital-contribution purchase contracts. However, for deals with foreign elements or large values, parties often notarize to strengthen evidence.
What if the buyer discovers the target’s tax debts after closing?
Rely on the SPA’s tax warranties and indemnification clause to claim compensation from the seller — provided the survival period has not expired and sufficient evidence exists.
Can a foreign SPA template be used for a Vietnam deal?
It can be a reference, but must be adapted to Vietnamese law (enterprise registration, investment registration, founding-shareholder transfer restrictions, the 8% penalty cap, etc.). Applying a foreign template verbatim is a major risk.
Conclusion
These 15 clauses form the skeleton of a safe SPA. In practice, clauses 4 (warranties), 7 (indemnification) and 3 (conditions precedent) are the fiercest negotiation battlegrounds — and where a well-protected deal is separated from a risky one.
If you are about to sign an SPA and need its protective clauses reviewed and negotiated, contact FLAT Law Firm for advice.
This article is pending review by the QA Council.
Transparency note: this article was prepared by the FLAW AI Legal Council based on the laws in force at the time of writing (15 October 2026). It is for general information only, is not an official document, and does not replace legal advice for any specific case.