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Acquiring a stake in a Vietnamese company shortens the time to market entry: customers, staff and licenses are already in place. But the procedure for a foreign investor to contribute capital or buy shares involves several consecutive steps, and getting the order wrong means the bank refuses the transfer or the amendment file is returned. This article sets out the process in the order it happens in practice, together with the accounting preparation required, based on the FDI accounting experience of ACCA Consulting Vietnam.
1. When to acquire capital or shares rather than set up a new company
Contributing capital or buying shares makes sense when the target company already holds value that is hard to recreate quickly: customer contracts, a team, premises and sector licenses. For Vietnamese business owners, it is also a way to raise capital or sell down part of their stake. If you are unsure whether to acquire or start from scratch, read comparing 5 forms of investment in Vietnam.
The biggest difference from setting up a new company: the investor inherits the entire accounting and tax history. Due diligence must therefore always come before signing the contract.
2. The 6-step process for a foreign investor to acquire capital or shares
- 1Review the target company
Check the books, tax returns, invoices, insurance, receivables and payables, and major contracts.
- 2Check market access conditions
Determine whether the business line has a foreign ownership cap or other specific conditions.
- 3Register the capital contribution / share purchase (if required)
In some cases, approval from the investment registration authority is needed before members or shareholders change.
- 4Open the account and transfer funds
Pay through the investment capital account in line with foreign exchange regulations, with the correct transfer description.
- 5Update the enterprise information
Register the change of members, shareholders or capital with the Business Registration Office under the Department of Finance.
- 6File tax and update the books
Handle the seller's capital transfer tax obligations, record the capital and update the shareholder register.
Step 3 depends on the business line, the post-transaction ownership ratio and other factors under current regulations. Do not assume that “buying less than 50% needs no registration”; check each case.
3. Milestones to track
- Weeks 1–4
Financial and tax due diligence; agree on price and conditions precedent.
- After signing the agreement
File the capital contribution / share purchase registration if required.
- After approval
Transfer funds through the investment capital account and keep all bank documents.
- After payment
Register the change to the enterprise registration details; the business registration authority processes a valid file within 3 working days.
- Next tax filing period
Declare capital transfer tax and update the books and shareholder information.
If, instead of buying an existing stake, the investor contributes new capital to increase charter capital, the contribution deadline under the regulations must be checked. For a newly established FDI company, capital must be fully contributed within 90 days of the issue date of the Enterprise Registration Certificate (ERC – Giấy chứng nhận đăng ký doanh nghiệp).
4. Impact on ownership structure and the books
- Foreign investor40%
- Vietnamese founders45%
- Other Vietnamese shareholders15%
Illustrative example, not a recommended ratio; actual ownership limits depend on the business line.
View as table
| Foreign investor | 40% |
| Vietnamese founders | 45% |
| Other Vietnamese shareholders | 15% |
After the transaction, the company may become a foreign-invested enterprise. The requirement to have annual financial statements audited by an independent audit firm should then be considered from the financial year in which the change occurs. The accountant also needs to update the register of members/shareholders, track contributed capital by owner and prepare for related-party transactions.
| Due diligence finding | Consequence if ignored | How to handle before signing |
|---|---|---|
| Invoices ≥ VND 5 million paid in cash | Input VAT may not be deductible | Quantify the tax at risk and cover it in warranty clauses |
| Late filing of returns in prior periods | Penalties under Decree 125/2020/ND-CP and its amendments | Require the seller to remedy before closing |
| Salaries without full insurance contributions | Back-payment of the employer's 21.5% and employee's 10.5% | Estimate the liability and deduct it from the price |
| Late tax payments | Late-payment interest of 0.03%/day on the overdue tax | Reconcile obligations on the tax portal |
| Missing documents | Expenses cannot be substantiated in a tax inspection | Request supplementary documents or hold back part of the payment |
5. Common mistakes that delay the transaction
- Transferring funds before the capital contribution registration is approved (where required), forcing the bank to return the money or leaving the transaction on hold.
- A transfer description that doesn't match the transfer agreement, making it hard to prove the source of capital and to repatriate profits later.
- Forgetting to declare the seller's capital transfer tax, especially when the seller is an individual or a foreign organization.
- Not updating the books after the change of ownership, leading to errors in the financial statements and audit file.
FAQ
Does a foreign investor buying shares need an IRC?
Usually, contributing capital to or buying shares in an existing company does not follow the Investment Registration Certificate (IRC) route used for a new company, but prior registration of the capital contribution may be required depending on the business line and ownership ratio. Check your specific case.
Which account should the share purchase payment go through?
The funds must pass through the appropriate investment capital account under foreign exchange regulations. Work with the bank before transferring to confirm the right account type and transfer description.
Does the seller have to pay tax?
Tax may arise on income from the capital transfer, depending on whether the seller is an individual or an organization. The filing obligation should be identified when the contract is drawn up to avoid late-payment interest.
Review before you buy, run smoothly after
ACCA Consulting Vietnam provides accounting services in Ho Chi Minh City for foreign-invested companies, from pre-transaction review to monthly bookkeeping and tax. Call or Zalo +84 938 847 699.
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