Share Repurchase by a Company in Vietnam: Conditions and Procedures (Articles 132–133)

Can a joint-stock company “buy back” shares it has already sold to shareholders? The answer is yes — but only through two tightly regulated mechanisms, with hard numerical thresholds and deadlines where a single wrong figure can invalidate the entire repurchase resolution. This article systematizes the conditions and procedures for share repurchase under Articles 132 and 133 of the Enterprise Law 59/2020/QH14 (as amended by Law 76/2025/QH15, effective 1 July 2025), with a side-by-side comparison of the two mechanisms.

1. Two repurchase mechanisms at a glance

2. Mechanism 1: Repurchase at a shareholder’s request (Article 132)

This is the “safety valve” protecting minority shareholders. When the General Meeting of Shareholders passes a resolution on company reorganization (merger, consolidation, division, split, conversion) or changes to shareholder rights and obligations set out in the Charter, a shareholder who dissented from that resolution may require the company to repurchase their shares.

Three-step procedure

Step 1 — Written request (within 10 days): the shareholder sends a written request to the company within 10 days of the GMS resolution date. The request must state: the shareholder’s name and address; the quantity of each share class; the proposed selling price; and the reasons for the repurchase request.

Step 2 — Company executes (within 90 days): from receipt of a valid request, the company must complete the repurchase within 90 days. The price follows the market price at the time of repurchase or the pricing principles stated in the company Charter.

Step 3 — Price disagreement: if the parties cannot agree on price, the company nominates at least three valuation organizations for the shareholder to choose from, and the valuer’s price governs. Valuation costs are borne by the company unless otherwise agreed.

Note: this right arises only if the shareholder dissented (voted against) a resolution in the two categories above. Shareholders who voted in favor or were absent have no repurchase right under this mechanism.

3. Mechanism 2: Repurchase by company decision (Article 133)

Conversely, the company may proactively repurchase issued shares — typically to reduce charter capital, stabilize the share price, or build treasury shares for an ESOP program. This mechanism carries more constraints:

• 30% cap: total repurchased shares may not exceed 30% of total ordinary shares sold;
• Authority: the Board of Directors decides repurchases within 10% of each sold share class per 12 months; beyond that threshold the General Meeting of Shareholders must decide;
• Price: for ordinary shares, the repurchase price may not exceed the market price at the time of repurchase;
• 30-day notice: the repurchase decision must be securely notified to all shareholders within 30 days of adoption, stating the quantity, share class, expected price, method, and offering period;
• 30-day offering window: shareholders wishing to sell submit offers within 30 days of receiving the notice. If total offers exceed the planned quantity, purchases are allocated pro rata, unless the Charter or the decision provides otherwise.

4. Creditor protection: the 10% asset threshold (Clause 4, Article 133)

Share repurchase shrinks company assets, directly affecting the ability to pay creditors. Hence Clause 4 of Article 133 installs a “safety brake”: if after repurchase the company’s total book assets fall by more than 10%, the company must notify all creditors within 15 days of completing the repurchase.

Notified creditors may demand payment or security. Missing this notification duty is among the most-litigated defects of repurchase resolutions in practice.

5. Charter-capital reduction registration after repurchase

Repurchased shares under either mechanism, if the company does not keep them as treasury shares, reduce charter capital — and the reduction must be registered. Legal basis: Article 134 of the Enterprise Law, Article 30 of the Enterprise Law, and Decree 168/2025/ND-CP (effective 1 July 2025, as amended by Decree 296/2026/ND-CP effective 23 July 2026): the company registers the charter-capital change within 10 days of completing the repurchase.

Distinguish this from partial return of contributed capital to shareholders (Point a, Clause 5, Article 111): available only where the company has operated continuously for at least 2 years and remains able to pay all debts after the return — an entirely different mechanism from share repurchase.

6. Common mistakes

• Missing the 10-day window: the shareholder’s request arrives on day 11 — the Article 132 right is lost;
• Board overreach: the Board decides a repurchase exceeding 10%/12 months without GMS approval;
• Above-market pricing: buying ordinary shares above market price — a breach of Article 133;
• Forgotten creditor notice: assets fall more than 10% with no 15-day notice;
• Late capital-reduction filing: more than 10 days pass without registering the charter-capital change.

7. Tax and accounting notes

Beyond corporate procedures, share repurchase triggers tax and accounting consequences that boards often discover too late. For the selling shareholder, the spread between the repurchase price and the original contribution/acquisition cost is generally taxable — as capital-transfer income for corporate shareholders or securities-transfer income for individuals — with the company typically bearing withholding and declaration duties. For the company, repurchased shares held as treasury shares are recorded as a reduction of owners’ equity, not as an asset; they carry no voting or dividend rights while held. If the shares are later re-issued (e.g., for an ESOP), the difference between re-issue price and repurchase cost is accounted for in share premium, never in profit. Engage tax counsel before fixing the repurchase price — a price set without tax modeling can surprise both sides at settlement.

8. Sample timeline for a company-initiated repurchase

To make the deadlines concrete, here is a sample timeline for a repurchase decided by the Board within its 10% authority:

• Day 0: Board adopts the repurchase decision (quantity, price range, method, timetable);
• Day 1–30: the decision is securely notified to all shareholders (deadline: day 30);
• Day 31–60: shareholders submit sale offers (30-day window from receipt);
• Day 61–75: the company allocates purchases (pro rata if oversubscribed) and signs transfer contracts;
• Day 76–90: payment, share transfer registration, and update of the shareholder register;
• Within 15 days of completion: creditor notification if book assets fell more than 10%;
• Within 10 days of completion: charter-capital reduction registration (if the shares are cancelled rather than held as treasury shares).

Build buffer days into each phase — a single late notice can give dissenting shareholders grounds to challenge the entire round.

Conclusion

Share repurchase is a lawful and useful tool, but one tailored with hard numbers: 10 days to request, 90 days to execute (shareholder mechanism); a 30% cap, 10% Board authority, 30-day notice/offer windows, 15-day creditor notice when assets fall more than 10%, and 10 days to register the capital reduction. Companies should build a detailed timeline for each repurchase round and have counsel review all resolutions and notices before issuance.

This article provides general legal information as of 14 October 2026 based on Enterprise Law 59/2020/QH14 (as amended by Law 76/2025/QH15) and Decree 168/2025/ND-CP (as amended by Decree 296/2026/ND-CP). Treasury-share accounting and tax obligations require in-depth advice on the actual file.

This article has been reviewed by the QA Council — FLAW AI Legal Council.