Capital contribution and share purchase are preferred investment strategies for foreign investors, allowing them to leverage existing corporate resources and bypass the complexities of greenfield establishment. However, this form of investment is strictly regulated under Vietnamese law, with specific requirements regarding eligibility, ownership limits, and procedural compliance. 

To ensure a seamless and compliant investment process, Hung Phi Law Firm provides a comprehensive guide to Foreign capital contribution and share purchase procedures in Vietnam below. 

1. Overview of capital contribution & share purchase in Vietnam

Key insights: capital contribution & share purchase

Under Clause 1, Article 21 of the Vietnamese Law on Investment 2025, capital contribution and share purchase are recognized as lawful investment forms and fundamental rights of investors, which may be understood as follows:

– Capital contribution to an existing company is a form of investment that occurs when the company (already established and operating) admits new members/shareholders by issuing new shares or seeking additional capital contributions to increase its charter capital. 

– Share purchase is an investment method whereby an individual or organization acquires ownership interests from existing shareholders or members, thereby becoming a member or shareholder of the enterprise with corresponding rights and obligations proportionate to the acquired capital ratio.

>>SEE ALSO:

VIETNAM’S LEGAL FRAMEWORK ON INVESTMENT INCENTIVES

2. Conditions for foreign capital contribution & share purchase in Vietnam

Requirements for foreign capital contribution & share purchase

According to Clause 2, Article 21 of the Vietnamese Law on Investment 2025, foreign investors making investment by contributing capital, purchasing shares and purchasing stakes of business organizations must: 

– Satisfy market access conditions applied to foreign investors as prescribed in Article 8 of the Vietnamese Law on Investment 2025;

– Ensure national defense and security in accordance with this Law and relevant regulations; 

– Comply with regulations of the law on land and conditions for receipt of land use rights and conditions for use of land on islands, border communes, wards, and special zones, as well as coastal communes and wards.

Important note: Foreign investors in restricted sectors must satisfy the market access conditions under Clause 3, Article 8 of the Vietnamese Law on Investment 2025. These include requirements regarding foreign ownership limits, forms of investment, operational scope, and investor/partner qualifications. Additionally, in this case, investors must comply with all other conditions mandated by domestic legislation and international treaties to which Vietnam is a party.

>>SEE ALSO:

KEY HIGHLIGHTS OF THE VIETNAMESE LAW ON INVESTMENT 2025

3. Capital contribution and share purchase procedures for foreign investors in Vietnam 

Step-by-step guide to foreign capital contribution and share purchase procedures

The process for capital contribution and share purchase is outlined below:

3.1. Conduct Legal Due Diligence (LDD)

Reviewing the target company’s legal status, corporate documents, licenses, assets, tax compliance, labor matters, and potential disputes to identify legal risks.

3.2. Signing the capital contribution/ share purchase agreement

The parties negotiate and sign a capital contribution or share purchase agreement, which may be notarized or certified depending on the transaction structure. 

The Share Purchase Agreement (SPA) or Capital Contribution Agreement typically includes key provisions such as: party information, transaction value, payment methods, and representations and warranties. Additionally, it covers closing conditions, post-closing obligations, and dispute resolution mechanisms to ensure legal compliance and protect the interests of all parties.

3.3. Obtaining regulatory approval (if applicable)

For transactions subject to Clause 3 Article 21 of the Vietnamese Law on Investment 2025, foreign investors are required to complete the necessary procedures to register their capital contribution or share purchase prior to updating the company’s shareholder or member list. Pursuant to Clause 2, Article 66 of Decree 31/2021/ND-CP (as amended and supplemented by Clause 3, Article 124 of Decree 168/2025/ND-CP), this requires filing an application dossier with the investment registration authority where the target company is headquartered, consisting of: 

– The registration application for capital contribution/ share purchase, specifying: The business registration details of the target entity in which the foreign investor intends to invest; its registered business lines; a comprehensive list of owners, members, or founding shareholders, as well as a list of owners, members, or shareholders who are foreign investors (if any); the foreign ownership percentages in the charter capital both prior to and following the transaction; the actual transaction value as per capital contribution/ share purchase agreement; and details of any investment projects operated by the entity (if applicable).

– Copies of legal documents of the individuals/organizations making the capital contribution or share purchase, and of the target business organization that has foreign investors contribute capital, purchase share/stake.

– A Memorandum of Understanding (MOU) on capital contribution or the purchase of shares/stakes between the foreign investor and the target business organization, or between the foreign investor and its existing shareholders or members.

– A copy of the Land Use Right Certificate of the target business organization receiving the foreign capital contribution or share/stake purchase (for cases specified in Point b, Clause 4, Article 65 of Decree 31/2021/ND-CP). 

Processing time: For cases specified in Points (a) and (b), Clause 2, Article 26 of the Vietnamese Law on Investment 2025, the investment registration authority shall, within 15 days of receiving a valid dossier pursuant to Clause 2, Article 66 of Decree 31/2021/ND-CP, evaluate the transaction’s compliance with the conditions set forth in the Vietnamese Law on Investment and Clause 4, Article 65 of Decree 31/2021/ND-CP and send a notice to foreign investors, except for cases under Clause 4 of Article 66 of Decree 31/2021/ND-CP. The authority shall issue a formal notice of the results to both the foreign investor and the target entity.

3.4. Enterprise registration amendment

When contributing capital or purchasing shares/stake, investors must satisfy the legal conditions and subsequently follow the procedures for changing members or shareholders. This process culminates in updating the charter capital and ownership information on the Enterprise Registration Certificate.

>>SEE ALSO:

REPRESENTATIVE OFFICE (RO) ESTABLISHMENT PROCEDURE FOR FOREIGN TRADERS IN VIETNAM

4. Hung Phi Law Firm – Specialized legal services for foreign capital contribution and share purchase

Professional legal counsel for foreign capital contribution and share purchase

Hung Phi Law Firm is a trusted full-service legal practice with a core specialization in foreign investment. Our attorneys leverage deep local insights and extensive practical experience to deliver strategic legal solutions throughout the investment process in Vietnam.

We provide high-quality legal support for capital contributions and share purchases, ensuring transaction security and risk mitigation. Our team delivers comprehensive, result-oriented advice tailored to meet each client’s specific objectives.

With extensive experience advising foreign investors across diverse industries, Hung Phi Law Firm has successfully assisted numerous clients in structuring and completing compliant capital contribution and share purchase transactions in Vietnam.

Our legal services for foreign capital contributions and share purchases typically cover the following:

• Preliminary legal assessment and transaction structuring;
• Legal Due Diligence on target companies;
• Drafting and negotiation of capital contribution; share/stake transfer agreements;
• Representation before investment and enterprise registration authorities;
• Post-closing legal and regulatory compliance.

We are committed to protecting our clients’ interests and ensuring that the target company can continue operating smoothly after the transaction.

>>SEE ALSO:

Vietnam’s Reliable Law Firm for Foreign Businesses

5. Frequently asked questions

5.1. In which cases shall a foreign investor follow the procedures for registering capital contributions or the purchase of shares/stakes?

According to Clause 3 Article 21 of the Vietnamese Law on Investment 2025, a foreign investor shall follow procedures for registration of capital contribution or purchase of shares or stakes of a business organization prior to change of members or shareholders in one of the following cases:

– The capital contribution or purchase of shares or stakes increases the ownership ratio by foreign investors in a business organization conducting business in the restricted business lines;

– The capital contribution or purchase of shares or stakes results in a foreign investor or business organization specified in Points a, b and c Clause 1 Article 23 of this Law holding over 50% of the charter capital of the business organization in the following cases: The holding of charter capital by the foreign investor is increased from less than or equal to 50% to over 50%; the holding of charter capital by the foreign investor is increased while such foreign investor is holding over 50% of the charter capital of the business organization.

– The foreign investor that contributes capital, purchases shares or stakes of a business organization has a certificate of rights to use land on an island or in a border or coastal commune; in a coastal commune; in another area that affects national defense and security.

5.3. How should I prepare for a legal consultation?