M&A in Vietnam: the complete legal process from target search to post-closing

A successful M&A process in Vietnam does not start at the negotiating table — it starts with getting the legal sequence right from day one. In practice, most post-deal disputes and cost overruns trace back to steps that were skipped or rushed early on: a superficial legal review, a purchase agreement missing key protections, or a forgotten mandatory state approval that blocks closing altogether. This guide reconstructs the full Vietnamese M&A process in the eight steps used in international practice, each tied to the Vietnamese legal basis currently in force — from target search, NDA, due diligence, contract negotiation and approvals, through closing and post-deal work.

Table of contents

• 1. What M&A means here, and who this guide is for
• 2. The current legal framework for M&A in Vietnam
• 3. The 8-step M&A process, A–Z
• 4. Costs, timelines and statutory milestones
• 5. Six common mistakes that kill deals
• 6. Buyer's condensed checklist
• 7. Frequently asked questions
• 8. When to work with a lawyer

1. What M&A means here, and who this guide is for

"M&A" in Vietnamese practice covers three deal structures, each with fundamentally different legal consequences:

• Share deal: the buyer acquires shares (joint-stock company) or capital contributions (limited liability company) from existing shareholders/members. The target's legal personality continues uninterrupted — every asset, debt, contract, licence, and hidden liability travels with the company to the new owner. This is the most common structure.
• Asset deal: the buyer acquires specific assets only (factories, machinery, brands, land use rights). Each asset transfers under its own procedure; the target's debts and obligations generally stay behind unless the parties agree otherwise.
• Merger (consolidation and amalgamation): one or more companies merge into another (the surviving company continues; the merged companies terminate) or consolidate into a new company (all predecessors terminate), under Articles 200 and 201 of the Enterprise Law 2020. The surviving/consolidated company inherits all rights and obligations.

This guide serves buyers (domestic and foreign investors), sellers and business owners, and management teams involved in a transaction. Its scope is the comprehensive process — all eight steps of a deal. Two specialist angles are deliberately kept separate to avoid overlap: the approval track for foreign investors (article T-084, being finalised — cross-linked on publication) and the debt-recovery angle in restructuring contexts (T-237). Foreign-investor readers should pair section 3.6 below with T-084 for the complete filing picture.

2. The current legal framework for M&A in Vietnam

There is no single "M&A Law". A Vietnamese transaction sits under several statutes at once, and matching the right statute to each step is precisely why counsel is needed from the outset:

• Civil Code 2015 (91/2015/QH13): the foundation of every agreement in the deal — NDAs, LOIs, share purchase agreements. Article 117 sets the validity conditions for civil transactions; Articles 418–419 govern contractual penalties and damages — the buyer's two most important contractual shields.
• Enterprise Law 2020 (59/2020/QH14, as amended by Law 76/2025/QH15): capital-contribution transfers in LLCs (Articles 52–53, including the pre-emptive offer to remaining members), share transfers in JSCs (Article 127: free transferability, subject to the Article 120 restriction on founders' shares and the charter), consolidation, merger, division and split procedures (Articles 198–201), and the duty to register changes to enterprise registration (Article 31).
• Investment Law 2025 (143/2025/QH15, effective 1 March 2026): Article 21(3) sets the three cases where a foreign investor must register a capital contribution, share or capital-contribution purchase before any change of members/shareholders — the single most important approval gate for foreign buyers.
• Competition Law 2018 (23/2018/QH14) and Decree 35/2020/ND-CP: economic-concentration control — deals above the thresholds must be notified and cleared before closing.
• Tax law: the Corporate Income Tax Law 2025 (67/2025/QH15, effective 1 October 2025) and Decree 320/2025/ND-CP for corporate sellers; the Personal Income Tax Law 2025 (109/2025/QH15, effective 1 July 2026) for individual sellers. Transfer tax is a pricing component, not an afterthought.
• Labour Code 2019 (45/2019/QH14): Article 42 governs the successor employer's obligations on a transfer of business ownership — employment contracts continue.
• Securities Law 2019 (54/2019/QH14): an additional layer where the target is a public or listed company (public tender offers, disclosure).

3. The 8-step M&A process, A–Z

3.1. Step 1 — Strategy and target search

Every good deal starts with a clear answer to one question: why buy? Market-share expansion, technology acquisition, licences or distribution access, or removing a competitor — the strategic rationale drives target criteria and deal structure (share deal vs asset deal). Buyers typically source targets through three channels: relationships and advisers, M&A brokers and boutiques, and organised sale processes run by the seller.

At screening stage, counsel should apply two "exclusion filters" before the buyer spends on deep diligence:

1. Are the target's business lines restricted for foreign investors? Check market-access conditions for foreign investors. A 100% acquisition of a logistics or education company can hit an ownership cap on day one.
2. Preliminary legal health of the target — ongoing shareholder disputes, seized assets, or a pending dissolution/bankruptcy. Catching a deal-breaker here saves the cost of every later step.

Sellers, for their part, should get legally ready for M&A before going to market: clean books, complete licences, settled legacy debts. A "clean" company commands a higher price and negotiates faster.

3.2. Step 2 — The non-disclosure agreement (NDA)

Before the seller opens its files, the parties sign a non-disclosure agreement. This is not a formality: during diligence the buyer sees the target's most sensitive information — internal financials, customer lists, formulas, pricing strategy. If the deal collapses, the NDA is the only tool stopping the buyer (often a competitor, or a future one) from using that information.

A proper NDA needs, at minimum: a sufficiently broad definition of "confidential information" (covering oral disclosures and the very existence of the deal); duties of confidentiality and non-use beyond the diligence purpose; a survival period (typically 2–5 years after negotiations end); carve-outs (public information, compelled disclosure to authorities); remedies — contractual penalties and damages under Articles 418–419 of the Civil Code 2015; and trade-secret protection under IP law. Note: an NDA governed by Vietnamese law is directly recognised and enforced by Vietnamese courts — do not use a foreign template that Vietnamese counsel has not reviewed.

3.3. Step 3 — Letter of intent (LOI) and term sheet

The LOI (or term sheet) records the key commercial terms agreed in principle: what is being bought (what percentage, or which assets), the indicative price and price-adjustment mechanics, payment structure, indicative timetable, and conditions for proceeding. In substance the LOI is non-binding on the sale obligation itself — it is a roadmap for detailed negotiation, so the parties do not start from zero at every meeting.

But three LOI clauses bind from signature, which is why the LOI needs counsel to draft or review it: (1) exclusivity — the seller agrees not to negotiate with other buyers for a period (typically 60–90 days); (2) confidentiality — restating and extending the NDA; (3) costs and termination — who bears diligence costs if the deal dies. Many disputes arise because one side assumed the LOI "binds nothing" while the exclusivity clause had already locked them in.

3.4. Step 4 — Legal due diligence

This is the most labour-intensive step — and the one that creates the most protection value for the buyer. Legal due diligence is the comprehensive review of the target's legal standing, answering three questions: (1) does the company validly exist, and does the seller have the right to sell; (2) what hidden risks and liabilities exist (tax debts, disputes, licence breaches); (3) how do these findings affect price and contract structure.

Standard scope covers: corporate existence and formation records; ownership structure and shareholder/member registers; land use rights and attached assets; business licences and sectoral sub-licences; material contracts (customers, suppliers, credit, leases); tax obligations; labour and insurance; existing and threatened disputes; intellectual property; environmental and fire-safety compliance. Any workstream can hide a deal-breaker — land held on annual-rental tenure that cannot be transferred, or a sub-licence about to expire without meeting renewal conditions.

Findings go into a diligence report, classified by severity (critical/moderate/informational), each mapped to a contractual remedy: price reduction, pre-closing remediation by the seller, a representation-and-warranty, or a purchase-price retention. For methodology, see our guides to legal due diligence in M&A transactions, the share purchase checklist for Vietnamese companies, and tax due diligence in M&A transactions. A dedicated 120-item checklist for manufacturing targets (T-094, being finalised) will be cross-linked on publication.

3.5. Step 5 — Negotiation and the SPA

The share purchase agreement (SPA) is the deal's central document. An international-standard SPA has six clause blocks that counsel will contest hardest:

1. Subject matter and price: precise description of the shares/contributions transferred, the price, and post-closing adjustment mechanics (net working capital, net debt at closing — figures at signing and at closing always differ).
2. Conditions precedent: what must happen before the buyer must pay — satisfactory completion of diligence, receipt of state approvals, no material adverse change (MAC). This is the buyer's safety valve.
3. Representations and warranties: the seller's statements on the target's legal, financial, tax and labour position at signing and at closing. Every false representation is a damages claim.
4. Indemnification: the seller compensates the buyer for breached warranties or diligence-flagged risks — with caps, baskets/de minimis thresholds, and survival periods.
5. Non-compete and non-solicitation: stopping the seller from setting up a competing business or poaching key staff for 2–3 years post-deal.
6. Governing law and dispute resolution: for cross-border deals, arbitration (e.g. VIAC, SIAC) instead of courts usually makes cross-border enforcement easier.

For a transaction-level work aid on the purchase itself, see our share purchase checklist for Vietnamese companies. On form: LLC capital-contribution transfers must follow the pre-emptive offer procedure to remaining members under Article 53 of the Enterprise Law 2020 — breaching it exposes the transfer to challenge by those members.

3.6. Step 6 — Approvals and clearances

Between signing and closing lies the "approval gap" — where many Vietnamese deals stall. Three approval groups need review:

1. Economic-concentration clearance (Competition Law 2018). Mergers, consolidations, acquisitions and joint ventures constituting an economic concentration (Article 29) must be notified to the National Competition Commission before implementation where the Article 13, Decree 35/2020/ND-CP thresholds are met (combined assets, combined turnover, transaction value or combined market share). Process: 30-day preliminary review (Article 34); then, if required, a 90-day full review, extendable by up to 60 days (Article 35). Closing a notifiable deal without notification risks fines and remedial measures — including divestiture orders. See our competition review in M&A transactions guide.

2. Foreign-investor approval (Investment Law 2025). Under Article 21(3) of the Investment Law 2025 (143/2025/QH15), a foreign investor must register a capital contribution, share or capital-contribution purchase with the investment registration authority before any change of members/shareholders in three cases: (a) the purchase increases foreign ownership in a business operating in market-access conditional sectors; (b) it results in foreign investors holding more than 50% of charter capital; (c) the company holds land use rights on islands, in border, coastal or defence/security-sensitive areas. Processing time: 10 working days (Article 76(4), Decree 96/2026/ND-CP, detailing the Investment Law 2025). This is the specialist subject of article T-084 (being finalised) — this guide covers only the process frame; for the approval mechanics, see our M&A approval for foreign investors guide, and two-way cross-links will be added at section 3.6 when T-084 goes live.

3. Internal and sectoral approvals. Buyer/seller JSCs may need general-meeting resolutions; LLCs need members'-council decisions — per the charter and the Enterprise Law. Targets in regulated sectors (banking, insurance, securities, telecoms, energy) need sectoral regulator approvals, reviewed case by case.

3.7. Step 7 — Closing and payment

Closing is when ownership formally transfers: the parties sign closing minutes, the buyer pays (less retentions), and seals, books, bank accounts and management control are handed over. Where conditions precedent are complex, signing-to-closing can stretch over months — during which the SPA typically imposes an "ordinary course" covenant on the target: no major asset sales, no new borrowing, no key personnel changes without buyer consent.

On payment, market practice combines: the bulk paid at closing, a holdback/retention (typically 5–15%) in escrow for 12–24 months securing the seller's indemnity obligations, or a post-closing price adjustment against audited closing accounts. For foreign buyer/seller pairs, cross-border payment must comply with the State Bank's foreign-exchange rules — the direct-investment capital account and outbound remittance procedures should be prepared in advance, so funds are not trapped after closing.

3.8. Step 8 — Post-closing work

Signed and paid does not mean finished. Four post-closing workstreams decide whether the deal truly lands:

1. Enterprise registration updates: within 10 days of the change, the company must register changes to its enterprise registration (members/shareholders, charter capital, legal representative) under Article 31 of the Enterprise Law 2020. Where the buyer is a foreign investor subject to investment registration, the investment and enterprise procedures must be sequenced correctly.
2. Labour: under Article 42 of the Labour Code 2019, the successor employer must continue performing employment contracts; where not all employees are retained, a labour-utilisation plan is required. A change of ownership is not, by itself, grounds for mass termination.
3. Tax: declare and pay transfer taxes per the framework in section 4; review whether the target's tax incentives remain available after the change of control.
4. Post-merger integration: merging governance, finance, people and culture — the first 100 days decide the deal's real value. An integration roadmap (governance structure, reporting lines, retention of key personnel, systems migration) should therefore be drafted alongside the SPA, so it can start running on day one after closing.

4. Costs, timelines and statutory milestones

The table below collects statutory timelines (not commercial estimates) and state/related costs the buyer should budget:

On overall timing: a simple domestic share deal can close in 2–3 months; a foreign-involved deal requiring investment approval and competition review typically runs 4–8 months. Legal, diligence and advisory fees depend on each deal's scale and complexity — FLAT quotes per matter; contact hotline 0988424851 for a consultation and fee proposal.

5. Six common mistakes that kill deals

1. Cursory diligence, reliance on the seller's word. Pattern: reviewing only audited financials with no independent legal review. Consequence: discovering after closing that the land is non-transferable annual-rental tenure, that tax arrears exist, or that key contracts contain change-of-control termination clauses. Prevention: full legal diligence before price lock, with every finding translated into SPA protection.

2. Forgetting the concentration filing. Many buyers assume "a small target means no competition issue" — but notification thresholds measure the parties' combined assets/turnover, not the target alone. Consequence: fines and possible remedial orders after money has changed hands. Prevention: threshold assessment at screening (step 3.1).

3. Skipping foreign-investor registration where required. Pattern: signing and paying, then discovering the deal falls under one of the three Article 21(3) Investment Law 2025 cases. Consequence: the member/shareholder change cannot be registered — money paid, title not transferred. Prevention: determine the registration duty before signing the SPA, and make clearance a condition precedent.

4. Copy-pasting a foreign SPA template. Pattern: using an unadapted English/US-law template. Consequence: penalty, indemnity or governing-law clauses may be unenforceable in Vietnam or conflict with mandatory Enterprise Law rules. Prevention: the SPA must be drafted/reviewed by Vietnamese counsel and anchored to specific statutory provisions.

5. Ignoring post-deal labour duties. Pattern: mass layoffs after closing on "change of ownership" grounds. Consequence: collective labour disputes, reinstatement orders and compensation. Prevention: build the labour-utilisation plan under Article 42 of the Labour Code 2019 during negotiations.

6. Leaving transfer tax out of the price. Pattern: negotiating a "gross" price without modelling the seller's tax — especially a foreign corporate seller facing 2% on transfer price even at a loss. Consequence: last-minute price demands or collapse over the "net" figure. Prevention: put tax analysis into diligence and tax-allocation mechanics (gross-up or price adjustment) into the SPA.

6. Buyer's condensed checklist

• [ ] Define the strategic rationale and target criteria before searching.
• [ ] Apply the exclusion filters: sector restrictions for foreign investors, internal disputes, seized assets.
• [ ] Sign a proper NDA before accessing the target's sensitive information.
• [ ] Sign an LOI with all three binding clauses: exclusivity, confidentiality, costs.
• [ ] Run full legal due diligence and classify findings by risk level.
• [ ] Assess concentration-notification thresholds and foreign-investor registration duties early.
• [ ] Negotiate the SPA with all six protective clause blocks, reviewed by Vietnamese counsel.
• [ ] Secure every approval (competition, investment, sectoral, internal) before closing.
• [ ] Prepare payment mechanics, escrow and foreign-exchange compliance.
• [ ] Post-closing: enterprise registration within 10 days, labour handling, tax filing, integration.

7. Frequently asked questions

What are the standard legal steps in a Vietnamese M&A transaction? Eight standard steps: (1) strategy and target search; (2) NDA; (3) LOI/term sheet; (4) full legal due diligence; (5) negotiation and signing of the share purchase agreement (SPA); (6) required approvals (competition, foreign-investor approval, internal approvals); (7) closing and payment; (8) post-closing work (enterprise registration updates, labour, tax, integration). See section 3 for step-by-step detail.

Does a foreign investor need approval to buy shares in a Vietnamese company? Yes, in three cases under Article 21(3) of the Investment Law 2025 (143/2025/QH15): (1) increased foreign ownership in a market-access conditional business; (2) foreign investors ending up with more than 50% of charter capital; (3) a company holding land use rights in islands, border, coastal or defence/security-sensitive areas. File with the provincial investment registration authority; 10 working days' processing. Next step: confirm the local receiving office before filing, and watch for the dedicated T-084 deep dive on publication.

Must an M&A deal be notified as an economic concentration? Possibly. The Competition Law 2018 requires pre-implementation notification to the National Competition Commission above the Decree 35/2020/ND-CP thresholds (assets, turnover, transaction value or combined market share). Preliminary review: 30 days; full review: a further 90 days (extendable by up to 60 days). Basis: Articles 29–35, Competition Law 2018. Next step: run the threshold test at target-screening stage.

What tax applies to a capital transfer in an M&A deal? Current framework: a Vietnamese enterprise seller pays CIT at 20% on transfer income under Law 67/2025/QH15 (effective 1 October 2025); a foreign enterprise seller of contributions/shares in an unlisted company pays 2% on the transfer price under Decree 320/2025/ND-CP — due even on a loss-making deal; individuals pay 0.1% on the sale price for securities transfers. Individual contribution transfers fall under the PIT Law 109/2025/QH15 (effective 1 July 2026), whose guidance is still being completed — check the rules in force at the transaction date.

How long after signing the SPA does closing happen, and what follows? The signing-to-closing gap turns on conditions precedent; state approvals can take 1–4 months. After closing: update enterprise registration within 10 days (Article 31, Enterprise Law 2020); the successor employer continues employment contracts (Article 42, Labour Code 2019); declare and pay transfer taxes; execute post-merger integration.

8. When to work with a lawyer

Bring M&A counsel in at screening — not when the SPA is being negotiated — if any of these apply: (1) a foreign element on either side; (2) the target operates in conditional or regulated sectors; (3) the deal may touch concentration-notification thresholds; (4) complex ownership (multiple shareholders, preference shares, shareholders' agreements); (5) diligence uncovers legal risks you do not know how to convert into contract terms. Early counsel always costs less than repairing a badly signed deal.

For advice on the M&A process tailored to your transaction — from diligence and SPA drafting to approvals and post-closing — contact FLAT — hotline 0988424851.

References

• Civil Code 2015 (No. 91/2015/QH13), passed 24/11/2015.
• Enterprise Law 2020 (No. 59/2020/QH14), as amended by Law No. 76/2025/QH15 (effective 01/07/2025).
• Investment Law 2025 (No. 143/2025/QH15), passed 11/12/2025, effective 01/03/2026.
• Decree 96/2026/ND-CP detailing the Investment Law 2025 (Article 76(4): 10-working-day processing time for foreign-investor capital-contribution/share-purchase registration).
• Competition Law 2018 (No. 23/2018/QH14); Decree 35/2020/ND-CP dated 24/03/2020.
• Corporate Income Tax Law 2025 (No. 67/2025/QH15), effective 01/10/2025; Decree 320/2025/ND-CP dated 15/12/2025; Circular 20/2026/TT-BTC dated 12/03/2026.
• Personal Income Tax Law 2025 (No. 109/2025/QH15), effective 01/07/2026.
• Labour Code 2019 (No. 45/2019/QH14).
• Securities Law 2019 (No. 54/2019/QH14).

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