Vietnam operates under a civil law system, where codified statutes hold the highest legal authority. This system contrasts with common law systems, where judicial precedents carry more weight.

Structure of the Legal Framework

The Constitution forms the pinnacle of the legal hierarchy, outlining fundamental rights and principles. Vietnam’s Constitution was amended in 2025, the most significant change being the elimination of the District level as a formal level of local government. This restructures the country’s administrative system from three main tiers (Province/District/Commune) to two (Province/Central City and Commune/Ward/Township).

Beneath this lie codes and laws enacted by the National Assembly, addressing specific legal areas such as civil, criminal, administrative, corporate law, labour, land and real estate, etc. The government further implements and interprets these laws through decrees and regulations. In addition, ministries and local authorities issue circulars and decisions providing guidance within their respective jurisdictions.

Implications for Businesses

Navigating the complex and extensive Vietnamese legal framework, with its numerous laws and regulations, poses a challenge for businesses. While courts rely less on precedents than in common law systems, focusing instead on applying statutory law, businesses should prioritise understanding relevant statutes and regulations to ensure compliance. The Vietnamese government also plays a significant role in regulating business activities through various agencies and regulations.

Vietnam has recently undergone a significant reform of its state agency system and administrative boundaries, which lead to corresponding updates in the regulatory framework.

Foreign investors entering the Vietnamese market may be required to obtain approval from Vietnamese government authorities. This typically involves obtaining an investment registration certificate from a competent authority before establishing a subsidiary to implement the project. The level of authority granting approval depends on the project’s scale and type.

Various authorities may be involved in the approval process, including the People’s Committee, its affiliated departments (eg, the former Department of Planning and Investment, which has now been merged into the Department of Finance), relevant industrial park management boards, ministries, the Prime Minister or even the National Assembly.

Specific authorities may be required in certain cases. For example, public-private partnership (PPP) projects might involve establishing case-by-case appraisal councils to evaluate the FDI. The State Bank of Vietnam plays a crucial role in approving specific investment activities within the banking sector, such as establishing foreign-invested banks or foreign bank branches. In addition, the Ministry of Finance (MOF) is the regulator in charge of licensing foreign investment into companies operating in insurance, fund or securities activities.

Generally, approval authorities have the power to:

review and decide on FDI acceptance;

• monitor activities;
• approve changes;
• impose sanctions; and
• even terminate FDI projects.

Beyond initial approval, FDI enterprises may need additional sub-licences, permits or approvals, depending on their sector’s specific conditions. These requirements may not apply to domestic companies. For instance, an FDI company operating retail activities needs a trading licence and a licence for each new retail outlet, except in certain exempt cases.

Vietnam is accelerating its ambitious reform, aiming for upper-middle income status by 2030 and high-income status by 2045. A series of strategic transformation agendas, commonly known as the “four pillars” of reform, have been promoted by the Political Bureau through four resolutions passed between late 2024 and the first half of 2025. These reforms aim to promote science, technology and digital transformation, streamline the existing legal landscape, foster international integration, and recognise the private sector as the most important driving force of the economy.

According to the General Statistics Office, Ministry of Finance, as of 30 September 2025, total registered capital from new projects, project adjustments, share purchases, and capital contributions by foreign investors was approximately USD28.54 billion, marking a 15.2% increase compared to the same period in 2024. The most attractive sectors to foreign investors include manufacturing, real estate, and technology.

Manufacturing

The manufacturing sector continues to be a key focus of foreign investment in Vietnam. According to the Ministry of Finance, the processing and manufacturing industry attracted the largest amount of new FDI, reaching USD7.27 billion, or 58.7% of total newly registered capital. Notably, Vietnam’s new Law on the Digital Technology Industry, effective 1 January 2026, offers significant incentive policies to establish a Vietnamese semiconductor ecosystem. Accordingly, the manufacturing of semiconductor products and AI-related businesses is classified as a specifically prioritised investment sector these they fall under the incentive list. Businesses participating in the semiconductor supply chain will also benefit from targeted incentive schemes and financial support from local state budgets.

In March 2025, Lite-On Technology started construction of its USD690 million factory in Quang Ninh, producing computer components and optical devices. In April 2025, LEGO officially launched its USD1.3 billion factory in VSIP III Industrial Park, Binh Duong. Red Board Electronics Limited, through its subsidiary Red Board Vietnam, was also approved to invest USD110 million in a high-precision circuit board factory in Kim Bang I Industrial Park, which is expected to be completed by February 2027.

Investment in electric vehicle manufacturing is also growing, as Vietnam works toward its Net Zero 2050 goal and introduces supportive policies. In August 2025, LG Energy Solution announced its plan to build an EV battery and charging–swapping station plant in Phu Tho, while local e-motorbike startup Dat Bike raised USD22 million in new funding.

Technology

The technology sector remains hot for M&A activity and new foreign investment in Vietnam, particularly in Artificial Intelligence (AI) and emerging technologies. In late 2024, NVIDIA completed the acquisition of VinBrain, one of Vietnam’s leading AI startups specialising in healthcare technologies. In early 2025, Qualcomm announced the acquisition of MovianAI Artificial Intelligence (AI) Application and Research JSC (MovianAI), the former generative AI division of VinAI Application and Research JSC (VinAI) and a part of the Vingroup ecosystem. Tech giants such as Google, Alibaba, and Microsoft are considering investments worth several billion US dollars in Vietnam. The data centre sector has also seen significant developments. In late August 2025, IPTP Networks launched a USD200 million data centre project in Da Nang, scheduled to begin construction in March 2026. Recently, Ho Chi Minh City People’s Committee received a proposal for a USD2 billion hyperscale data centre project dedicated to AI development and data infrastructure. The proposed investment consortium includes G42, FPT Corporation, VinaCapital, and Viet Thai Investment Group.

The digital asset market has also become more dynamic, offering promising investment opportunities, as Vietnam has officially introduced a legal framework for digital assets and launched a pilot licensing programme for digital-asset trading exchanges under Government Resolution No 05/2025/NQ-CP dated 9 September 2025.

Recently, a major step in Vietnam’s efforts to build an AI governance framework is the introduction of the draft law on AI which aims to regulate the research, development, deployment, and use of AI systems. A key highlight of the draft is its risk-based classification system, which categorises AI systems into four levels of risk (unacceptable, high, medium, and low) and each is subject to corresponding regulatory measures.

Real Estate

Vietnam continues to revise its land law system to stimulate the real estate market. The government is currently seeking public feedback on the draft amendment to the Land Law 2024. Key proposed changes include restoring the Land Law 2013 provision that allows land users to choose between one-off or annual land rental payments, with the option to switch between the two, offering greater flexibility for investors. The draft also introduces a mechanism for land recovery, allowing the State to reclaim and lease or allocate land to investors once they have reached agreements covering at least 75% of the land area and 75% of land users within a project site.

Over the past year, the government has also worked actively to address legal obstacles in real estate projects. As of September 2025, Ho Chi Minh City has resolved issues for 47 private real estate projects, and the City People’s Committee has pledged to resolve 100% of projects under its jurisdiction and 50% of projects under central authorities within 2025.

Some major real estate developments and transactions were also seen in 2025. In June, CapitaLand began construction of its first low-rise residential project in Northern Vietnam, with a total investment of USD800 million, located within the Ocean Park 3 township. Malaysian real estate developers have shown significant interest in the Vietnamese market, with SkyWorld Development Berhad signing an MOU to acquire all of the charter capital of Vina An Thuan Phat; Gamuda Land continuing to expand its investment portfolio in both Northern and Southern Vietnam; and United Overseas Australia Ltd (UOA) completing its USD68 million acquisition of a commercial land plot in central Ho Chi Minh City to develop a commercial building project.

Renewable Energy

The renewable energy sector has been dynamic. On 15 April 2025, the Prime Minister issued Decision No 768/QD-TTg adopting the amended Power Development Plan 8 to increase renewable energy capacity targets, particularly for solar, wind, and hydropower, demonstrating a determination to prioritise renewable energy in Vietnam’s future power generation structure. 2025 also brought more positive news, with new Decree 57/2025/ND-CP regulating direct electricity trading mechanism and Decree 58/2025/ND-CP on self-generation, self-consumption rooftop solar power helping to address legal gaps under the new national plan on electricity.

Logistics

On 9 October 2025, the Prime Minister issued Decision No 2229/QD-TTg approving the strategy for developing logistics services for the 2025–35 period, with a long-term vision to 2050. The strategy sets forth a comprehensive road map to enhance the country’s strategic position in global supply and value chains. Notably, the plan targets the establishment of at least five modern logistics service centres meeting international standards by 2035, with expansion to a minimum of ten centres by 2050. The logistics sector is expected to continue seeing robust activity. In September 2025, A.P. Moller Capital announced its investment in ALS Cargo Terminal (ALSC), a leading air cargo handling operator at Noi Bai International Airport. The investment is partnered between A.P. Moller Capital (through its Emerging Markets Infrastructure Fund II) and VinaCapital (through its Logistics platform, LogiVest Ltd.). In the same month, two Japanese investors, including Kawanishi Warehouse Co., Ltd. and MOL Logistics Co., Ltd. have become strategic shareholders in Toan Phat Logistics Joint Stock Company to establish Mekong Logistics Hub, the first integrated cold-chain logistics centre in Vietnam.

International Financial Centres

On 27 June 2025, the National Assembly passed Resolution No 222/2025/QH15, establishing two International Financial Centres (IFCs) in Ho Chi Minh City and Da Nang City.

IFC membership will be open to financial and nonfinancial institutions, investment funds, fintech and digital asset providers, and consulting firms. Permitted services within the IFCs include banking, insurance, fund management, green finance, carbon credits, and digital assets. Members will benefit from a wide range of incentives, including taxation, foreign exchange, and preferential land policies. A sandbox scheme is introduced to create a controlled testing environment under certain legal immunity for fintech and innovative services. Notably, an IFC Arbitration Centre under the IFC will be established, with a milestone provision allowing parties to waive judicial review of arbitral awards granted by the IFC Arbitration Centre.

The two primary structures used for M&A transactions in Vietnam are the acquisition of shares and the sale and purchase of assets. Mergers and consolidations of companies are uncommon due to complex procedures and ambiguous valuation regulations. However, mergers and consolidations may be applied in the context of internal restructurings of large groups of companies. In practice, deals often combine different structures.

Acquisition of Shares

• Secondary shares: the investor acquires existing shares from shareholders.
• Primary shares: the investor injects capital into the target company by acquiring new shares.

Pros

• The investor inherits any existing assets and liabilities.
• The exit strategy through a share sale is straightforward.

Cons

• Due diligence is crucial to assess inherited risks.
• The investor assumes all existing liabilities.
• Additional requirements and approvals may apply to public company acquisitions, such as public tender offers.

Sale and Purchase of Assets

The investor acquires specific assets/businesses from the target company.

Pros

• The investor can target specific assets/businesses.
• Exposure to unwanted liabilities is reduced.

Cons

• The acquiror needs to establish a Vietnamese entity for the purchase.
• Restrictions apply to foreign ownership of certain assets (eg, land and real estate assets on land).
• Transferring an investment project may be subject to limitations specifically applied to such project.

Key Considerations for Foreign Investors

Shares

Share acquisition means inheriting all assets and liabilities. Thorough due diligence is vital. Primary shares provide capital injection, while secondary shares involve direct payments to shareholders. The payments may have to be channelled through a specialised indirect investment capital account or a direct investment capital account, as required by Vietnam’s foreign exchange control regulations. Share sales offer the most straightforward exit strategy.

Assets

Asset acquisition is preferable when specific business segments are targeted and restructuring is impractical. A Vietnamese entity must be established for the purchase. Restrictions apply to foreign ownership of certain assets and the transferral of investment projects.

Tax Implications

Please see 9. Tax regarding the tax implications of each structure.

Foreign investors considering M&A in Vietnam should be aware of the following typical regulatory requirements.

Companies Treated as “Foreign Investors”

A company must comply with investment conditions and processes applicable to “foreign investors” if:

• more than 50% of its charter capital is held by foreign investors (Direct FDI);
• over 50% of its charter capital is held by a Direct FDI; or
• more than 50% of its charter capital is held by foreign investors and a Direct FDI.

Foreign Ownership Limits

The Law on Investment sets the general principles on the maximum shareholding in a Vietnamese target company that can be held by foreign investors and deemed foreign investors, based on the target’s sector and business line. The specific limits may be specified in international trade agreements or specific laws and regulations.

Asset Transfer and Project Transfer

Before proceeding, the transferred project and the parties involved must meet specific requirements. For example, a real estate project requires approved planning, completed land clearance and a land-use right certificate. The assignee must be a licensed real estate trading company with sufficient financial resources and a commitment to continue the project.

Acquisition Approval

Foreign investors need “acquisition approval” from the provincial Department of Finance before acquiring shares in a Vietnamese company if:

• the acquisition increases the foreign ownership in the target company conducting a business activity that is subject to conditions applicable to foreign investors;
• the acquisition increases the foreign ownership to over 50%; or
• the target company has land-use rights in restricted areas or related to national defence.

The application includes an assessment of:

• foreign ownership restrictions;
• the conditions applicable to the target company’s business lines; and
• compliance with those conditions.

Merger Filing Clearance

If the transaction constitutes an economic concentration and exceeds certain thresholds, the parties must apply for merger filing clearance from the Vietnam Competition Commission. This can be done concurrently with the acquisition approval application. Details of the merger filing procedure are provided in 6. Antitrust/Competition.

Registration Requirements

Foreign investors should note specific registration requirements after completing the transaction, including:

• registering foreign shareholders/equity owners with the authority;
• recording changes to the Vietnamese target company’s corporate information;
• amending the investment registration certificate (if applicable) to reflect the buyer as the project investor; and
• registering the ownership of specific assets (eg, real properties, trade marks, intellectual property, automobiles).

Special Procedures

Specific procedures apply to M&A transactions involving State-owned companies or PPP project companies. For example, acquiring shares or assets from a State-owned company requires a compulsory bidding and competitive offer process to ensure fair value, and acquiring interests in a PPP company requires approval from the authority signing the PPP contract. Notably, from 1 July 2025, several requirements for the capital transfer in PPP project companies are now lifted, such as (i) minimum ratio of each member of a consortium; (ii) restricted equity transfer before completing construction or beginning the operation phase of the project; and (iii) assignee’s financial and management capacity for the implementation of the PPP contracts.

Investors in Vietnam have two primary company forms to choose from: Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs). Both offer limited liability to owners, meaning their liability is capped at their capital contribution. Ownership is also determined by the proportion of capital invested.

However, there are several key differences between the two forms, as follows.

Key Differences

Capital structure and flexibility

An LLC cannot issue shares, limiting flexibility in raising capital.

A JSC can issue various share classes, offering greater flexibility for attracting investment and tailoring ownership rights.

Equity transfer

In an LLC, owners have a statutory right of first offer for transferring their interests.

In a JSC, shares are generally freely transferable, with some restrictions on founding shareholders and limitations outlined in the company charter.

Listing on stock exchanges

Only JSCs can be listed on Vietnamese stock exchanges.

Corporate governance

JSCs feature multiple decision-making bodies with distinct responsibilities, fostering a more structured and transparent governance framework.

The structure of LLCs is simpler, enabling faster decision-making for business agility.

Public company status

A JSC can become a public company by meeting either of the two following criteria:

• at least 100 shareholders and VND30 billion minimum paid-up charter capital, with 10% of voting shares held by at least 100 non-major shareholders; or
• successful completion of an initial public offering (IPO).

Public company status requires registration with the State Securities Commission of Vietnam (SSC).

Choosing the Right Form

JSCs are ideal for seeking third-party equity investments, implementing complex ownership structures, and listing on the stock exchange.

LLCs are suitable for smaller businesses with fewer owners, and for quick decision-making and operational agility.

Ultimately, the best choice depends on the investors’ specific investment goals, capital requirements and desired governance structure.

In Vietnam, there is no official definition of minority investors or minority shareholders, nor is there a set shareholding threshold to determine such classifications. However, the Law on Securities, which governs public companies, defines a major shareholder as one holding 5% or more of the voting shares. This implies that individuals holding less than this threshold are considered minority shareholders.

The Law on Enterprises applies to both public and private companies, and grants basic rights to all shareholders of JSCs. It allows shareholders or groups of shareholders owning 1% or more of the common shares to initiate lawsuits against the company’s directors to seek compensation for losses and damages caused by their negligence or breach of duties.

Regarding the right to access information, which is crucial for informed investment decisions, the applicable threshold is 5% or a lower threshold as outlined in the company’s charter. Shareholders or groups of shareholders meeting this threshold have the right to access mid-year and annual financial statements, working reports, special contracts and transactions, excluding documents related to business secrets of the company; and to convene the general meeting of shareholders under exceptional circumstances.

For the right to nominate candidates for the Board of Directors or Supervisory Board, a higher threshold of 10% or a lower threshold as specified in the charter applies.

In LLCs, each equity owner has equal rights, including the right to initiate lawsuits against the managerial personnel of the company. However, certain special rights – such as the right to convene the equity owners’ council and access to important company documents – are only granted to equity owners or groups of equity owners holding 10% or more of the charter capital or a lower threshold as set forth in the charter.

Given this situation, minority investors with holdings below the relevant thresholds for certain statutory rights should consider forming alliances to exercise these rights collectively or negotiating with other shareholders to lower these thresholds in the company charter. Minority investors may also seek to incorporate specific rights into the shareholder agreement, such as veto rights or reserved matters, to safeguard their investments.

Private companies in Vietnam are now required to disclose their ultimate beneficial owners (UBOs). UBOs are determined based on controlling interests and power. Specifically, a UBO is an individual who (i) directly or indirectly owns at least 25% of the charter capital or outstanding shares with voting power of a company; or (ii) has control or influence over any key decisions, including the appointment and dismissal of certain key managerial positions, amendment of the company charter, or reorganisation and dissolution of the company. A private JSC is further required to disclose the details of the corporate shareholder holding 25% or more of outstanding shares with voting power. Any change to UBO information must be then updated within 10 days of the relevant modification.

Public companies in Vietnam are subject to stringent disclosure requirements, similar to those in other jurisdictions. These regulations mandate the timely and comprehensive disclosure of material information to shareholders, ensuring transparency and accountability. Public or listed companies are obliged to publish their disclosure information on the online databases of the SSC and the relevant stock exchange.

Aside from the SSC’s databases, there is a comprehensive online enterprises national database, where all registered company information is publicly accessible. Any changes to a company’s registered information that require official approval are announced to the public through a formal process.

Private foreign-owned companies are mandated to submit their audited financial statements to relevant government agencies, including the Tax Department, the Statistics Department and the Department of Finance, within 90 days of the end of each fiscal year. FDI-related reporting obligations also apply to these companies, such as updating the investment national database with the status of investment projects. In the areas of employment and financing, businesses in Vietnam must adhere to various reporting requirements to avoid potential administrative penalties.

Vietnam’s capital markets comprise two key segments: debt and equity markets (stock market).

Debt Market

Companies incorporated and operating in Vietnam as LLCs or JSCs (including FDI enterprises) can issue bonds to raise capital, but only JSCs can issue convertible bonds or warrant-linked bonds. These bonds can be offered domestically or on international markets. In Vietnam, the domestic market accounts for a substantial portion of bond transactions.

Stock Market

The stock market in Vietnam is conceptually divided into two primary components, as follows.

• In the primary market, businesses issue securities to raise capital.
• In the secondary market, securities offered in the primary market are traded by different investors on the relevant stock exchange. The two largest stock exchanges in Vietnam are the Hanoi Stock Exchange (HNX) and the Ho Chi Minh City Stock Exchange (HOSE). These secondary markets facilitate the buying and selling of securities, providing liquidity for investors and enabling them to trade previously issued stocks and other financial instruments. In addition to HNX and HOSE, there are also other platforms known as UpCom (UpCom Market) and OTC (Over the Counter) for trading shares of unlisted public companies or securities not listed on a centralised exchange.

Despite the vibrancy of the capital market, bank financing still plays a dominant role in providing sufficient capital for investors in Vietnam. The financial system continues to rely heavily on credit capital for business operations and project development.

Vietnam’s capital markets are governed by a set of key legal documents, including the following.

• The Law on Enterprises 2020 (LOE), amended in June 2025, is an overarching law that establishes the legal framework for the establishment, operation and dissolution of enterprises in Vietnam. It also sets forth the legal framework for the private issuance of securities, such as bonds and shares, by non-public companies.
• The Law on Securities 2019 (LOS) (as amended) provides a comprehensive regulatory framework for the public issuance, trading and supervision of securities in Vietnam. It also establishes the regulatory framework for securities intermediaries, such as securities companies and securities investment funds.
• Decree No 153/2020/ND-CP related to bond offering (as amended from time to time) provides detailed regulations on the issuance of bonds in Vietnam, including the eligibility requirements for issuers, the registration process and the ongoing disclosure obligations.
• Decree No 155/2020/ND-CP (Decree 155) (as amended from time to time) provides detailed regulations on various aspects of the LOS, such as the registration process for securities offerings, the regulation of securities intermediaries and the penalties for securities violations. In September 2025, the government amended Decree 155 with the aim of attracting more foreign investment in the securities market as a big step for the upgrade from Frontier Market to Secondary Emerging Market. Notably, it permits companies to simultaneously register for both an Initial Public Offering (IPO) and a stock listing. This reform reduces the period between IPO approval and the commencement of trading from 90 days to just 30 days, thereby shortening the overall IPO process by approximately three to six months compared to previous procedures. Further, the amendments introduced stricter requirements for the public offering of securities, such as credit rating requirements.
• On 8 October 2025, FTSE Russell announced its reclassification of Vietnam’s stock market from a Frontier Market to a Secondary Emerging Market. Such recognition makes Vietnam more visible and attractive to international investors in the future. This change is scheduled to take effect in September 2026, with the final confirmatory review by FTSE Russell scheduled in March 2026.

In general, the LOE and Decree No 153 govern the private issuance of bonds and shares by non-public companies, while the LOS and Decree 155 regulate other scenarios, such as public offerings and the operation of securities intermediaries. Private placement of bonds by non-public joint stock companies will now be subject to an additional condition that the issuer’s total liabilities (including the value of bonds to be issued) must not exceed five times its equity capital, as reflected in the audited financial statements for the fiscal year immediately preceding the issuance year.

Apublic company is defined as a JSC that meets either of the following two conditions:

• it has a charter capital of at least VND30 billion, with 10% of the shares held by 100 or more non-major shareholders; or
• it has completed an IPO that has been registered with the SSC.

To proceed with a public offering of bonds or shares, businesses must meet stringent requirements under the law regarding their financial capacity and operational performance. For example, the issuer’s operations in the preceding year must have been profitable, with no accumulated losses and no overdue debt exceeding one year.

Additional conditions will be required for businesses that intend to be listed on a standard stock exchange, such as the Ho Chi Minh City Stock Exchange (HOSE) or the Hanoi Stock Exchange (HNX).

Foreign investors are permitted to invest in bonds issued by Vietnamese companies. Those who intend to invest in equity instruments can engage in the Vietnamese stock market through one of the following methods:

• direct investment – foreign investors can trade stocks directly on the stock exchange; or
• indirect investment – foreign investors can entrust their capital to securities investment fund management companies or branches of foreign fund management companies in Vietnam.

For direct investment, foreign investors are required to register a securities trading code with the Vietnam Securities Depository and Clearing Corporation (VSDC) before initiating investment activities. This obligation does not apply to indirect investments, as the entrusting unit will handle matters related to transaction code registration. Regardless of investment method, FDIs must comply with the requirements on foreign ownership limitations.

Foreign investors structured as investment funds do not require any additional regulatory review beyond the standard requirements for foreign investors. The investment activities of investment funds are governed by the same rules and regulations that apply to other foreign investors.

The obligations of foreign investors operating in the Vietnamese stock market are outlined in Circular 51/2021/TT-BTC of the MOF (as amended). These obligations encompass a range of aspects, including:

• indirect investment – foreign investors can participate in the Vietnamese stock market through securities investment funds or branches of foreign fund management companies;
• securities depository account opening – foreign investors are required to open a securities depository account with the VSDC to facilitate their stock transactions;
• securities trading code registration – foreign investors must register a securities trading code with the VSDC to identify their transactions on the stock exchange; and
• reporting and information disclosure obligations – foreign investors are subject to various reporting and information disclosure requirements, including the submission of periodic reports and the disclosure of material events to the SSC and the relevant stock exchange.

These obligations ensure that foreign investors comply with Vietnamese securities regulations and maintain transparency in their investment activities.

Securities investment funds are governed by Circular 98/2020/TT-BTC of the MOF, including closed-end funds, open-end funds, exchange traded funds – ETFs, and real estate investment funds. Securities investment funds must be managed by a fund management company. On 12 September 2025, the MOF issued Decision No 3168/QD-BTC approving the scheme on investor restructuring and developing the securities investment fund industry, of which the main objectives are to raise (i) the number of securities investment funds to 500 by 2030, with an average annual growth rate of 25% in the subsequent years; and (ii) the total net asset value of securities investment funds to 5% of GDP by 2030, and to keep it increasing at a double-digit rate by 2035.

Vietnam’s merger control regime is overseen by the Vietnam Competition Commission (VCC), which falls under the Ministry of Industry and Trade.

A merger filing is mandatory if a transaction constitutes an economic concentration and meets one of the applicable filing thresholds, regardless of whether it is domestic or cross-border. Economic concentrations can take the form of mergers, consolidations, acquisitions of shares or assets, or joint ventures.

To determine whether an acquisition transaction constitutes an economic concentration, the Competition Law provides that the acquirer must acquire control over the target company or a business line of the target company. This can happen in the following ways:

• acquiring more than 50% of the charter capital or voting shares of the target;
• acquiring the right to own or use more than 50% of the assets of the entire business or one business line of the target; or
• having the right to make decisions regarding any of the following in respect of the target:
• the appointment or removal of a majority of or all the directors and other managerial personnel (either directly or indirectly);
• amendment of the charter; or
• important business activities of the target.

A merger filing is triggered if one of the following applicable filing thresholds is met. These thresholds are different for transactions involving companies in the banking, insurance and securities sectors:

• the total turnover in Vietnam of one of the transaction parties is VND3,000 billion (approximately USD113 million) or more;
• the total assets in Vietnam of one of the transaction parties is VND3,000 billion (approximately USD113 million) or more;
• the transaction value is VND1,000 billion (approximately USD38 million) or more (for onshore transactions only); or
• the total market share in any relevant market in Vietnam of the transaction parties is 20% or more.

The merger filing must be made before the consummation of the transaction and involves a two-step assessment:

• a preliminary assessment, which typically takes three to four months and involves a review of the transaction documents to determine whether the transaction raises any competition concerns; and
• an official assessment, which could take up to six months to complete and involves a more in-depth investigation of the transaction’s impact on the Vietnamese market.

If the competition authority has not issued a notice of the preliminary conclusion upon expiry of the 30-day time limit of the preliminary assessment, then the proposed transaction can be implemented without any further action.

Preliminary Assessment

The VCC conducts a preliminary assessment to determine whether a proposed economic concentration raises any competition concerns before proceeding with the official assessment. The key criteria for the preliminary assessment include the following.

• Verification of participating enterprises and their relationships – the VCC verifies the identities of the parties and the nature of their relationship with each other. This ensures that the transaction is accurately classified and that the relevant market is correctly defined.
• Determination of the form of economic concentration – the VCC categorises the transaction as a merger, consolidation, acquisition of shares or assets, or joint venture. This helps to identify which specific provisions of the Competition Law apply to the transaction.
• Identification of the relevant market – the VCC defines the relevant market for the transaction, which comprises products or services that are considered substitutable from the consumer’s perspective. This is a critical step in assessing the competitive impact of the transaction.
• Assessment of the combined market share – the VCC considers the combined market share of the parties to the economic concentration in the relevant market, which provides an indication of the potential for the transaction to reduce competition. A reportable economic concentration may proceed after the preliminary assessment if the combined market share in the relevant market of the parties to such economic concentration is:
• less than 20%;
• 20% or more in the relevant market but the total sum of market share squares in the relevant market post-merger will be less than 1,800; or
• 20% or more in the relevant market but the total sum of market share squares in the relevant market post-merger will be above 1,800 and the increase in their total market share squares in the relevant market both before and after the economic concentration is less than 100.
• Assessment of the degree of economic concentration – the VCC compares the degree of economic concentration in the relevant market before and after the transaction. This helps to determine whether the transaction will lead to an increase in market concentration.

Official Assessment

If the preliminary assessment raises competition concerns, the VCC conducts an official assessment, which involves a more in-depth investigation of the transaction’s impact on the Vietnamese market. The official assessment focuses on the following aspects.

• Restraint effect on competition – the VCC assesses whether the transaction is likely to raise barriers to entry or expansion, or to allow the merging parties to engage in anti-competitive practices.
• Positive effects of the economic concentration – the VCC also considers the potential positive effects of the transaction, such as economies of scale or increased innovation.
• Combined assessment of both restraint and positive effects – the VCC weighs the potential negative and positive effects of the transaction to determine whether it is likely to harm overall consumer welfare.
• Applicable conditions to the economic concentration – if the VCC finds that the transaction is likely to harm competition, it may impose conditions on the merging parties to mitigate the harm. These conditions could include requirements to divest assets, to grant access to essential facilities, or to engage in certain types of behaviour.

In summary, the Vietnamese merger control regime aims to protect competition and consumer welfare by ensuring that mergers and other economic concentrations do not lead to significant anti-competitive effects. The VCC’s two-step assessment process helps ensure that transactions are thoroughly reviewed before they are allowed to proceed.

In addition to the two-step assessment process, the VCC has the authority to issue economic concentration clearance with conditions attached. These conditions are designed to address any potential anti-competitive effects of the economic concentration and ensure that overall competition in the market is not harmed. The VCC may impose various conditions, including:

• division, separation or divestment – the VCC may require the parties to the concentration to divest or separate certain assets or business units to reduce their combined market share and enhance competition;
• price monitoring – the VCC may impose monitoring obligations on the parties to the concentration to ensure that they do not engage in anti-competitive pricing practices, such as price fixing or excessive markups;
• other measures for minimising restraint on competition – the VCC may impose other conditions to mitigate any potential anti-competitive effects of the economic concentration, such as requiring the transacting parties to provide access to essential facilities or to refrain from engaging in certain types of market conduct; and
• measures for enhancing positive impact – the VCC may also impose conditions to maximise the positive effects of the concentration, such as requiring the transacting parties to invest in innovation or to expand their operations in under-served markets.

The VCC has the authority to block economic concentrations that are deemed to have a significant restrictive impact on the domestic market. If a transaction is blocked, the VCC may order the parties to unwind the transaction and impose a fine of 1% to 5% of the total turnover of the violating parties.

Companies that violate the merger control regime may also face other administrative sanctions, such as:

• fines of 1% to 5% of total turnover for failing to file a notifiable transaction;
• fines of 0.5% to 1% of total turnover for failing to comply with waiting periods or standstill obligations;
• fines of 1% to 3% of total turnover for implementing a merger despite being blocked by the authority; or
• fines of 1% to 3% of total turnover for failing to comply with conditions imposed by the VCC.

If a company disagrees with a decision by the VCC, it may file a complaint with the Chairman of the VCC; if the complaint is not resolved to its satisfaction, it may file a lawsuit with the competent courts.

• The Law on Investment 2020 (as amended in 2025) defines four types of FDI:
• the establishment of a new economic organisation;
• a capital contribution or acquisition of shares/equity in a target organisation;
• the implementation of an investment project; and
• a business co-operation contract.

All types of FDI must undergo a foreign investment review regime, and investors will receive an approval or certificate as an “entry ticket” to make their investment in Vietnam. National security review is a step in the foreign investment review regime, and this review is applicable to FDI that involves land use.

Investment Licence

Generally, investors investing in Vietnam must undergo an investment review regime to obtain one of the following documents (the “Investment Licence”).

Investment policy approval

All types of FDI may be subject to this review regime if the investment project is included in the list of projects that require approval from the National Assembly, the Prime Minister or the Provincial People’s Committee. The investor must submit the application documents to obtain the investment policy to the following authorities:

• the Ministry of Finance (MOF) if the investment policy approval is issued by the National Assembly or the Prime Minister;
• the Department of Finance (DOF) if the investment policy approval is issued by the Provincial People’s Committee for projects located outside of industrial parks, export processing zones, hi-tech parks or economic zones; or
• the Board Management of the relevant industrial parks, export processing zones, hi-tech parks or economic zones if the investment policy approval is issued by the Provincial People’s Committee for projects located within these areas.

To obtain the approval from the National Assembly, the application must be submitted no later than 60 days prior to the opening date of a National Assembly session. While the approval process takes at least 43 days for approval from the Prime Minister, and 26 days for approval from the Provincial People’s Committee. In practice, the timeline for review and issuance of investment policy approval is typically longer than the statutory timeline.

Investment registration certificate – Special Process

Certain types of FDI projects are eligible for a simplified investment review regime to obtain an investment registration certificate (IRC), bypassing the standard investment policy approval regime. Eligibility applies to investments carried out in industrial parks, export processing zones, high-tech parks, centralised digital technology zones, free trade zones, or functional areas within economic zones. Eligible investment projects include:

• investment in the construction of innovation centres and R&D centres;
• investment in the semiconductor industry, including design and manufacturing of integrated circuits, printed electronics, chips and semiconductor materials;
• investment in prioritised high-tech sectors and products encouraged by the Prime Minister;
• investment in strategic technology infrastructure, including large-scale data centres, cloud computing infrastructure, 5G mobile networks, and other digital infrastructure as determined by the Prime Minister; and
• investment in strategic technology sectors and the production of strategic technology products, as determined by the Prime Minister.

The investor will submit the application documents to obtain the IRC to the Board Management of the relevant industrial parks, export processing zones, hi-tech parks or economic zones. Obtaining an IRC takes 15 days, but the actual processing time is often longer than the statutory timeline. 

Investment registration certificate – Common Process

Types of FDI other than capital contribution or the acquisition of shares/equity in a target organisation must undergo this review regime to obtain an IRC if the investment is not subject to investment policy approval. The investor will submit the application documents to obtain the IRC to the following authorities:

• the DOF, if the investment is to take place outside industrial parks, export processing zones, hi-tech parks or economic zones; or
• the Board Management of the relevant industrial parks, export processing zones, hi-tech parks or economic zones, if the investment is to be carried out within these areas.

Obtaining an IRC takes 10 days, but the actual processing time is often longer than the statutory timeline.

M&A Approval

A two-step approval process is required if the proposed acquisition involves any of the following scenarios:

• one of the target’s authorised business lines is subject to market access conditions, and the acquisition would increase foreign ownership of the target beyond the permitted level;
• the acquisition would result in foreign ownership exceeding 50% of the target’s charter capital; or
• the target company possesses land located in certain border, coastal or national security areas.

The two-step approval process involves the following.

• Registration and approval – the acquisition must be registered with the relevant licensing authority, which will issue an approval notice within 15 days for the first two cases above. For the third case, the approval will be issued within 17 days.
• Change-of-ownership registration – upon approval, the change of ownership must be registered with the relevant authority, which should take three working days.

If the target company is a foreign-invested company, it may have an investment registration certificate associated with its investment project. The change of ownership may require an amendment to the investment registration certificate to reflect the new ownership structure.

Vietnam’s foreign investment review regime considers several key criteria.

Foreign Restrictions

Foreign investment in Vietnam is governed by both international treaties (such as Vietnam’s WTO commitments, the EU-Vietnam Free Trade Agreement and the CPTPP) and domestic regulations. These restrictions typically take the form of:

• foreign ownership limitations – certain industries have restrictions on the percentage of ownership allowed by foreign investors;
• presence limitations – in some cases, foreign investors may be required to partner with a local company or invest through a specific type of entity (eg, joint venture); and
• sub-licence requirements – additional approvals or licences may be needed for specific activities within an investment, such as opening additional outlets.

Planning and Incentives

Guided by socio-economic needs, the Vietnamese government periodically updates lists of:

• conditional business lines – these require specific criteria (eg, licensing) to be met before operation can commence;
• banned sectors – certain industries are entirely closed to foreign investment; and
• investment incentives – specific businesses and locations may be offered benefits to attract investment.

The Law on Investment 2020 currently identifies 234 conditional business lines and 10 banned sectors.

National Security

Investments involving land use often undergo a national security review to ensure they do not pose any threats to Vietnam’s defence or security. This review is a crucial factor in determining project approval.

Investor Commitments and Conditions

The Investment Licence details the investor’s commitments to the authorities, typically including:

• capital contribution – the total investment amount and schedule for injecting funds;
• project objectives – the intended purpose and outcome of the investment; and
• an implementation timeline – the planned timeframe for completing the project.

These commitments are binding, and the investor must adhere to all terms and conditions stated in the Licence. If specific conditions precede project initiation, the investor must fulfil them first.

Investment Incentives

While applying for the licence, investors can also request access to investment incentives. However, these benefits are only available for new or expanded projects, excluding FDI through capital contribution or share acquisition.

Potential incentives include:

• tax breaks – preferential tax rates or temporary corporate income tax holidays;
• import duty exemptions – eliminating or reducing import taxes on equipment and materials;
• land fee and tax relief – lower rates or complete exemption from land-use fees and taxes; and
• increased tax deductions – eligibility for additional deductions on specific expenses.

To qualify for these incentives, the investment must meet at least one of the following criteria:

• location – it must be situated in disadvantaged areas, industrial parks, export processing zones, hi-tech parks or special economic zones;
• industry – it must be focused on prioritised areas like hi-tech activities, greenfield projects, education, healthcare or pharmaceuticals; and
• other factors – large investment capital, contribution to social issues or innovative start-ups.

The final decision on granting incentives rests with the authorities after reviewing the investment proposal. If approved, the chosen incentives will be officially listed on the Investment Licence.

Reasons for Rejection During Review of a Project

The authorities have the right to reject an investment proposal if there is evidence it could pose a threat to national security, cultural heritage or the environment. If they have doubts about the investor’s ability to fulfil their commitments (eg, lack of sufficient funds), they may also request additional documentation or even reject the application.

Grounds for Termination After Investment

Once an investment is approved, the authorities have the power to terminate it under various circumstances, such as:

• irreversible harm to national security, cultural treasures or the environment;
• unresolved violations of environmental or labour safety regulations;
• persistent non-compliance with the Investment Licence, despite the imposition of fines;
• failure to rectify conditions imposed by a court or arbitration ruling;
• an unregistered change in project location beyond the permitted timeframe;
• land-use violations, including revoked permits or unauthorised use;
• unfulfilled guarantees for project completion;
• the investment is based on fraudulent transactions; or
• termination is ordered by a court or arbitration ruling.

Consequences of Non-Compliance

Investors must strictly adhere to the terms of their Investment Licence and all applicable regulations. Any violations can result in administrative sanctions against the investor and/or the investment itself. These sanctions may include:

• fines;
• the suspension of operations; or
• the revocation of the Investment Licence and forced termination of the investment.

Unauthorised Investments

Investments undertaken without an Investment Licence are subject to administrative sanctions and a mandatory application for the necessary licence. If the investment fails the review process, the authorities will require its immediate termination.

Market Access Conditions

Vietnamese law divides market access for foreign investors into three categories.

• Restricted sectors – these industries are closed to foreign investment due to national security concerns, state monopolies or international treaties. Examples include investigation and security services and news media.
• Conditional sectors – these sectors have limitations on foreign ownership or require specific approvals for investment. Examples include banking, insurance and advertising. Details on these conditions can be found in treaties like Vietnam’s WTO commitments, AFAS, EVFTA, and the CPTPP. A notable change in market access conditions in 2025 is the part opening of market access to foreign investors in the sectors of manufacturing of weapons, explosives, military materials, and equipment.
• Unrestricted sectors – in most other industries, foreign investors enjoy equal treatment with domestic investors and can freely invest through the Law on Investment. However, authorities may still review financial capacity and operations before approval.

Bank Accounts

Foreign investment activities in Vietnam require specific accounts based on the investment form and size:

• a Direct Investment Capital Account (DICA) is used for direct investments like establishing subsidiaries; and
• an Indirect Investment Account (IIA) is used for indirect investments like portfolio investments.

The new Circular No 03/2025/TT-NHNN, effective from 16 June 2025, revises the shareholding threshold from 51% to 50% for distinguishing direct investment from indirect investment to align with the current Law on Investment.

These accounts are crucial for various transactions, such as capital contributions, foreign currency exchange and profit repatriation.

Foreign Exchange

Vietnamese law regulates foreign currency use through the Foreign Exchange Ordinance 2005 (as amended). Activities include:

• capital transactions – FDI, borrowing and debt repayment;
• current transactions – payments and remittances related to trade or short-term loans; and
• other activities – defined by law and the State Bank of Vietnam.

Capital transactions may face limitations, such as requiring Vietnamese Dong for transfers between residents and non-residents. Generally, payments and contracts within Vietnam must use the local currency, with exceptions allowed by the State Bank. Violations can result in sanctions and invalidated transactions.

Sector-Specific Regimes

Investment limitations and requirements vary across sectors. The key sectors attracting foreign investment include the following.

Real estate business

Vietnam establishes distinct regulations for domestic companies and FIEs, resulting in different treatments in terms of access to land and the scope of the real estate business activities that each type of entity can perform.

Under Vietnam’s Land Law 2024 and Investment Law 2020, the following companies are “foreign-invested entities” (FIEs).

• Direct ownership: a company in which foreign investors hold more than 50% of its charter capital, being a “majority foreign-own company”.
• Indirect ownership: a company in which a majority foreign-owned company holds more than 50% of its charter capital.
• Combined ownership: a company in which foreign investors and a majority foreign-owned company hold more than 50% of its charter capital.

Comparison of permitted real estate business activities between domestic organisations and FIEs

Domestic entities and non-FIEs’ real estate business activities include the following:

1. purchase or lease-purchase of residential or construction projects for sale, lease, or lease-purchase;
2. lease of residential or construction projects for subleasing;
3. investment in housing or construction projects for sale, lease, or lease-purchase;
4. acquisition of all or part of a real estate project;
5. investment in technical infrastructure development for transfer or lease of land with infrastructure;
6. acquisition of land-use rights with technical infrastructure within real estate projects for transfer or lease; and
7. lease of land-use rights with technical infrastructure within real estate projects for subleasing.

FIEs real estate activities include b), c), d), and e) only from the above list.

Goods trading

Government Decree 09/2018 mandates a trading licence for foreign investors involved in buying and selling goods. This includes activities such as retailing, wholesaling specific products and e-commerce.

Obtaining this licence can be a lengthy and complex process. Retail facilities also require a separate outlet establishment licence.

The government is proposing amendments to Decree 09/2018 to streamline the administrative procedures and reflect Vietnam’s commitments in FTAs such as the removals of economic need test (ENT) requirements.

The tax information set out below is for general reference purposes only. Investors need to seek advice on taxes in Vietnam from qualified tax advisers.

Both domestic and foreign-owned (FDI) Vietnamese companies are subject to the following two main taxes.

• Corporate Income Tax (CIT) – a standard 20% tax on the taxable profit of a company, calculated as total revenue minus deductible expenses and other assessable income. Under the new Law on Corporate Income Tax No 67/2025/QH15, adopted on 14 June 2025, new preferential CIT rates have been introduced for small and medium-sized enterprises (SMEs): a 17% rate for companies with annual revenue between VND3 billion and VND50 billion, and a 15% rate for those with revenue below VND3 billion. The tiered tax regime is intended to support reinvestment and business expansion of such entities. Additionally, as mentioned earlier, certain investment activities may qualify for tax breaks such as preferential rates or holidays.
• Value-Added Tax (VAT) – a tax on the value added to goods and services at each stage of production and consumption. The standard rate is 10% (currently temporarily reduced to 8% until 31 December 2026), calculated as the VAT charged to customers minus the VAT paid on purchases. There are also 0% and 5% rates for specific cases such as exports and essential goods.

Additional Tax Options

Certain businesses may benefit from registering as an Export Processing Enterprise (EPE) to enjoy:

• VAT exemption on goods and services used for production and exports; and
• special tax incentives on import and export activities.

Other Specialised Taxes

Beyond the main two, there are also specific taxes for certain activities or goods, such as:

• special sales tax, which is applicable to certain luxury and non-essential goods;
• natural resources tax, which is levied on the extraction or exploitation of natural resources; and
• environmental protection tax, which is paid by businesses that pollute the environment.

Remitting Profits for Foreign Investors

Foreign investors in Vietnam can remit their profits abroad, but the following should be borne in mind.

• Dividends – no tax is withheld if dividends are paid to another company (including foreign shareholders). However, individual shareholders will be subject to a 5% withholding tax.
• Timing – profits can be remitted annually after taxes are finalised, and the tax authorities must be notified at least seven working days before the transfer.

Foreign Contractor Withholding Tax

This tax applies to income earned in Vietnam by foreign entities and individuals, such as interest, royalties, service fees, leases and rentals, insurance premiums, transportation fees, and income from securities transfer, digital or e-commerce transactions and goods supplied or services rendered in Vietnam.

The tax includes both VAT and CIT for businesses, or personal income tax for individuals. Rates vary depending on the type of income and the nature of the foreign contractor’s business.

Double Tax Agreements (DTAs)

Vietnam has signed DTAs with more than 80 countries, including major trading partners like Singapore, China, Japan and Australia. These agreements can help to reduce double taxation for foreign companies operating in Vietnam. However, it is important for foreign contractors to actively apply for tax relief under these agreements, as automatic application is not guaranteed.

To minimise their tax burden in Vietnam, foreign direct investors (FDIs) should pay close attention to several key aspects of the local tax system.

Tax Incentives and Procedures

Vietnam offers various tax incentives, such as preferential rates, holidays and reductions. Understanding the eligibility criteria and application procedures for these benefits is crucial for maximising tax savings.

Deductible Expenses

Only expenses incurred in generating revenue and supported by proper documentation (valid invoices, contracts, bank statements, etc) are tax-deductible. Be aware of non-deductible expenses like excessive employee benefits or foreign exchange losses.

Loss Carry-Forward

Tax losses can be carried forward for five years after the loss-making year, but only if the business activities, ownership structure and accounting system remain unchanged. It is essential to maintain proper record-keeping and report losses in annual tax returns. Group loss sharing or consolidated tax relief are not available in Vietnam.

VAT Deductions

Vietnam uses a credit method for VAT, allowing FDIs to deduct input VAT paid on purchases from the output VAT charged on sales. However, certain purchases are ineligible for deduction, such as personal expenses and specific goods. Proper VAT invoices and record-keeping are necessary for claiming input VAT.

Tax Declaration and Reporting

FDIs must register for tax codes, open bank accounts and declare and pay taxes regularly (monthly, quarterly and annually). They must also submit financial statements, audits and other documents to the relevant authorities. Accounting books and records must be kept in Vietnamese and comply with Vietnamese standards.

Administrative Fines for Tax Violations

Fines for tax violations vary depending on the severity, ranging from late payment penalties to fraud charges. Serious violations can even lead to criminal prosecution or licence revocation.

Capital Gains Tax for Foreign Direct Investors

When FDI companies sell or dispose of their assets in Vietnam, they may be subject to capital gains tax, which is part of the CIT and applies equally to both foreign and domestic investors who hold similar investments.

Calculating Capital Gains

The capital gains tax amount is typically calculated as the difference between the total sale price and the original purchase price of the assets.

Pursuant to the 2025 CIT Law, capital gains derived by foreign investors will be taxed based on a flat tax rate of the sale proceeds. The flat tax rate will be set out in the guiding decree.

Tax Rates for Shares in Public Companies

For capital gains from selling shares in public companies, the tax treatment differs for foreign and domestic investors:

• foreign companies – 0.1% CIT rate on the total sales proceeds, similar to individual investors; and
• domestic companies – 20% CIT rate on the calculated capital gains.

Please note that this information provides a general overview of capital gains tax for FDI in Vietnam. Specific circumstances and regulations may apply, so it is recommended to consult with a tax professional for accurate advice on each individual situation.

Vietnam has implemented various anti-avoidance rules to address tax evasion by foreign direct investors (FDIs).

Transfer Pricing

• Arm’s length principle – transactions between the FDI and its related parties (eg, subsidiaries, parent company) must be at arm’s length, reflecting fair market prices.
• Transfer pricing methods – specific methods like comparable uncontrolled transaction (CUP), resale price and cost-plus are used to determine arm’s length pricing.
• Documentation requirements – FDIs must maintain detailed documentation supporting their chosen transfer pricing method. Non-compliance can lead to adjustments and penalties.

Anti-Hybrid Rules

• Hybrid mismatch arrangements (HMAs) – Vietnam has implemented specific rules to address situations where different jurisdictions treat the same entity or transaction differently, potentially creating opportunities for double non-taxation or double taxation.
• Neutralisation measures – the authorities can apply various measures to prevent tax avoidance through HMAs, including denial of deductions, adjustments to taxable income or an exit tax.

Other Relevant Regimes

• Controlled foreign corporation (CFC) rules – Vietnam’s CFC rules aim to prevent FDIs from shifting profits to low-tax jurisdictions through controlled foreign subsidiaries.
• Thin capitalisation rules – these rules limit the amount of debt that an FDI can use to finance its operations in Vietnam, preventing excessive debt-to-equity ratios that could be used to reduce taxable income.
• General anti-avoidance rule (GAAR) – Vietnam has a GAAR that empowers the authorities to challenge transactions designed solely for tax avoidance purposes, even if they comply with specific anti-avoidance rules.

Global minimum tax

Vietnam has adopted Decree No 236/2025/ND-CP detailing Resolution No 107/2023/QH15 on the implementation of a global minimum tax on multinational enterprises (MNEs), aligning with the Global Anti-Base Erosion Model Rules (Pillar Two). This decree applies to constituent entities of MNEs located in Vietnam if the MNE’s consolidated revenue is at least EUR750 million in at least two of the four most recent fiscal years or in all fiscal years since incorporation (if the MNEs have operated for less than four years). These entities are subject to additional CIT under two mechanisms, as follows.

• Qualified domestic minimum top-up tax: if the effective tax rate on the MNE’s profits in Vietnam falls below 15%, the Vietnamese constituent entity must pay a top-up tax to reach the 15% minimum. Conversely, if the top-up tax rate exceeds 15% minimum due to the effective tax rate being lower than zero, only a 15% top-up tax rate will apply. This ensures that MNEs pay a fair and consistent share of tax in Vietnam, regardless of internal profit shifting strategies.
• Income inclusion rule: if a Vietnamese parent company has subsidiaries in countries with an effective tax rate below 15%, it must pay additional CIT to Vietnam to cover the difference. On the other hand, where the effective tax rate is below zero and the top-up tax rate exceeds 15%, a 15% cap will apply. This applies unless the subsidiaries have already paid the required top-up tax in their respective countries. This rule prevents MNEs from shifting profits to low-tax jurisdictions to avoid paying their fair share of taxes.

The tax landscape is constantly evolving, so it is crucial for FDIs to stay updated and seek professional advice to navigate these complexities.

The main law governing employment and labour matters in Vietnam is the Labour Code No 45/2019/QH14 (effective 1 January 2021), which outlines the rights and obligations of both Vietnamese and foreign employees and employers in the following areas:

• employment contracts, establishing the terms and conditions of work;
• work and rest breaks, ensuring proper breaks and time off for employees;
• employment termination, defining the grounds and procedures for ending employment;
• workplace dialogue, enabling communication and collaboration between employers and employees;
• collective bargaining, allowing employees to negotiate with employers for better terms and conditions (optional, not mandatory);
• labour discipline and responsibility, addressing misconduct and performance issues;
• labour dispute settlement, providing mechanisms for resolving disagreements between employers and employees; and
• other employment-related matters, covering various aspects of the employment relationship.

Besides the Labour Code, other important regulations for foreign investors include:

• Decree No 152/2020/ND-CP (as amended), providing specific rules for managing and recruiting foreign workers in Vietnam;
• Decree No 219/2025/ND-CP, regulating the issuance, re-issuance, extension and withdrawal of work permits for foreign workers in Vietnam;
• Law on Social Insurance No 41/2024/QH15, defining social insurance benefits, employee/employer rights and responsibilities, and related policies;
• Law on Medical Insurance No 25/2008/QH12 (as amended), outlining medical insurance benefits, payment obligations, coverage scope and other related matters;
• Law on Occupational Safety and Hygiene No 84/2015/QH13, setting the primary rules and restrictions to ensure workplace safety and health;
• Law No 47/2014/QH13 on Entry, Exit, Transit and Residence of Foreigners in Vietnam (as amended), governing the issuance of visas and temporary residence cards, and immigration procedures for foreign nationals; and
• Law on Trade Union No 50/2024/QH15 (as amended), defining the right to establish, participate in and operate trade unions, member rights and obligations, and other trade union management matters.

Collective Bargaining and Trade Unions

While not mandatory, the Labour Code encourages voluntary, co-operative collective bargaining. If one party (employer or employees via their representatives) proposes it, the other must respond, or risk violating the principle of goodwill. Successful negotiations lead to a collective labour agreement. Similarly, employees have the right to establish grassroot-level trade unions, but it is not obligatory.

The Labour Code primarily recognises cash wages as the standard form of employee compensation. These wages can be paid periodically (monthly, bi-weekly) or based on productivity. Importantly, they cannot fall below the regional minimum wage, which varies depending on the location, as follows:

• Region I (major cities): VND4,960,000/month (approximately USD188) or VND23,800/hour (approximately USD0.9);
• Region II: VND4,410,000/month (approximately USD167) or VND21,200/hour (approximately USD0.8);
• Region III: VND3,860,000/month (approximately USD146) or VND18,600/hour (approximately USD0.7); and
• Region IV: VND3,450,000/month (approximately USD131) or VND16,600/hour (approximately USD0.6).

These minimum wages are subject to periodic adjustments by the government based on factors such as the cost of living and economic conditions. Currently, the government is proposing an average 7.25% increase to existing minimum wages, starting from 1 January 2026.

Other Forms of Compensation

While the Labour Code focuses on cash wages, Vietnam allows for other forms of employee compensation governed by different laws. These include:

• Employee Stock Ownership Plans (ESOPs), offering employees ownership shares in the company; and
• equity compensation, providing employees with stock options or shares as part of their compensation package.

In practice, these benefits are often treated as supplementary benefits rather than core salary components and are typically at the employer’s discretion.

Pensions

Pension benefits are not part of employer-paid compensation. Instead, employees and employers are obliged to make respective contributions to the State-run pension scheme calculated based on the employees’ salary, which then provides the employees with pension benefits upon retirement.

Compensation in Acquisitions and Investments

The Labour Code does not have separate regulations on employee compensation in the context of acquisitions, changes of control or other investment transactions. In such situations, existing compensation arrangements typically remain in effect, unless otherwise agreed upon during the deal negotiations.

Impact on Employees in Acquisitions and Investments

When an acquisition, change of control or similar investment transaction significantly affects many employees (eg, potential redundancies), the employer has the following obligations under the Labour Code.

• Prepare a labour usage plan outlining the employer’s proposed changes to employment arrangements, including potential redundancies, transfers or changes in working conditions.
• Consult with employees or trade unions – employers must discuss the plan with the relevant trade union or, in its absence, directly with the affected employees. This consultation allows for feedback and potential adjustments to the plan.
• Inform employees and authorities – the approved plan must be communicated to employees and, in some cases, to the provincial People’s Committee.

However, this procedure only applies to specific types of transactions as defined by the Labour Code, including:

• restructuring or technology changes that significantly impact the business operations and employee roles;
• economic reasons, in situations where the employer faces financial difficulties or needs to downsize due to market conditions; and
• where division, merger, sale or asset transfer lead to changes in ownership or control of the company or its assets.

Labour Usage Plan and Consultation

The labour usage plan is intended to address the potential impact on employees during these transactions. Employees have the right to express their opinions during the consultation process, either themselves or through their trade union. While this consultation does not directly affect the completion of the M&A transaction, it can influence the timeline if no agreement is reached with employees.

Possible Outcomes of the Labour Usage Plan

The consultation may not necessarily change the pre-determined employer-employee settlements, but it can influence the benefits and allowances offered to employees as part of the plan’s implementation.

Three possible scenarios can arise:

• redundancy, where employees may be laid off, and the employer must pay them retrenchment allowances;
• employees may be transferred to work for the new owner of the company, with their years of service recognised for future benefits calculations; or
• the employment relationship between the employee and the original employer remains unchanged.

Understanding Vietnam’s IP protection regime is crucial for FDIs to effectively safeguard their valuable assets. The main regulations governing IP protection are the Law on Intellectual Property No 50/2005/QH11 (as amended) (IP Law) and its guiding documents.

IP Categories and Protection Mechanisms

The IP Law categorises intellectual property rights into three main types:

• copyright and related rights, which are protected automatically upon creation, without requiring formal registration, although a registration option is available and recommended;
• industrial property rights (IPRs), including patents, trade marks, industrial designs and utility models, which require registration with the competent authority for protection; and
• rights to plant varieties, which also require registration for protection.

General Registration Process for IPRs

While copyright protection is automatic, establishing other IPRs usually involves a five-step process:

• the submission of a registration application, providing detailed information about the IP being protected;
• a formality examination, where the authority checks the application for completeness and compliance with formal requirements;
• publication of the application, making it publicly available and allowing for potential opposition from third parties;
• a substantive examination, where the authority assesses the application’s legal merit and compliance with relevant IP laws; and
• the granting or refusing of protection – based on the examination, the authority issues a certificate of protection or rejects the application.

Choosing the Right Category and Protection Conditions

FDIs should carefully consider which IP category their asset belongs to, as the protection regime and limitations differ for each. In addition, understanding specific protection conditions and limitations for each IP type is crucial for the successful registration and effective enforcement of rights.

The IP Law outlines various measures to safeguard intellectual property rights, aligning with international IP treaties like the Berne Convention and TRIPS Agreement. These measures can be broadly categorised as:

• self-protection, where owners can take proactive steps to prevent infringement, such as using trade marks and copyright notices;
• civil remedies, whereby owners can file lawsuits seeking compensation for damages caused by infringement;
• administrative sanctions – the relevant authority can impose warnings, fines, confiscation of infringing goods and even business suspension on infringers; and
• criminal prosecution – in severe cases, criminal charges may be filed against deliberate infringers.

Administrative sanctions are the most common form of dispute resolution for IP issues in Vietnam. However, these can only be applied to registered intellectual property. Notably, certain subject matters are excluded from IP protection, including:

• daily news, which is considered to be mere information rather than creative work;
• legal documents, which are protected by other laws rather than copyright;
• processes, systems and methods, which are not considered original inventions;
• scientific discoveries and mathematical methods, which are not patentable; and
• plant varieties, animal breeds and medical treatments, which are protected by dedicated laws.

Furthermore, the IP Law allows for the compulsory licensing of inventions under specific circumstances, such as:

• public needs – to ensure access to essential medicines, technology for national defence, etc;
• anti-competitive practices – if the patent holder abuses their monopoly power; and
• international obligations – to meet the needs of developing countries under trade agreements.

Importantly, compulsory licences are granted on non-exclusive terms with royalty payments and must be confined to the permitted scope, period and territory.

The IP Law does not explicitly address AI-generated works. The law emphasises intellectual labour originating from humans. This currently excludes AI as a legal author or inventor. While there is no outright denial of protection, AI-generated works currently face challenges in obtaining IP rights due to the lack of specific provisions and the human-centric focus of the law.

From 1 January 2025, Vietnam launched two specialised IP courts under the amended Law on the Organisation of the People’s Courts, marking a major step forward in IP dispute resolution. The Hanoi IP Court will handle first-instance cases from 20 northern provinces, while the Ho Chi Minh City IP Court will cover the others. This is expected to improve consistency in rulings, and foster greater confidence among rights holders and investors in the IP regime.

Vietnam has also released a draft law amending the IP Law for public consultation with an aim to establish a comprehensive legal framework for the valuation, financing, and mortgaging of IP assets.

Vietnam’s data protection landscape has been upgraded with the issuance of the Law on Personal Data Protection No 91/2025/QH15 (“PDP Law”), which will take effect from 1 January 2026, replacing Decree No 13/2023/ND-CP (“Decree 13”) as the nation’s primary and comprehensive legal framework for personal data. The PDP Law reflects the principles of Decree 13 and further introduces enhanced safeguards for specific categories of personal data and contexts requiring special protection. These categories include the following.

• Vulnerable data subjects, including children, individuals with limited or lost civil act capacity, and those with impaired cognition or behavioural control.
• Business-related activities, including recruitment, employee management and usage; insurance operations; financial, banking, and credit information services; advertising services; social media and online communication platforms; public audio/video recording; and emerging technologies such as big data, artificial intelligence, blockchain, virtual environments, and cloud computing.
• Sensitive personal data, including location data and biometric data.

The PDP Law also outlines the following principles for administrative sanctions applicable to violations of personal data protection by organisation. For violations committed by individuals, the applicable sanctions will be half of those imposed on organisations for the same violations:

• a maximum fine of 10 times the revenue generated from the illegal trading of personal data;
• a maximum fine of 5% of the previous year’s revenue for organisations violating cross-border data transfer regulations; and
• a maximum fine of VND3 billion (USD113,200) for other violations in the personal data protection sector.