Capital transfer is an increasingly popular investment strategy for foreign investors seeking rapid market entry in Vietnam. Through capital or share acquisition, investors can leverage an existing company’s assets, workforce, and market position without establishing a new entity.

However, this process is not merely a commercial transaction; the parties must strictly comply with Vietnamese laws and implementing regulations. In this case, seeking specialized legal counsel is essential for foreign investors to ensure a secure, smooth transaction. 

Hung Phi Law Firm provides professional legal services for foreign investors’ capital transfer in Vietnam, supporting clients from initial assessment to post-closing compliance.

1. Overview of Foreign Investors’ Capital Transfer in Vietnam

General outline of foreign investors’ capital transfer activities

1.1. Legal Conditions for Foreign Capital Transfer

According to Clause 2, Article 24 of the 2020 Vietnamese Law on investment, foreign investors making investment by purchasing shares and purchasing stakes of business organizations must:

a) Satisfy market access conditions applied to foreign investors as prescribed in Article 9 of the 2020 Vietnamese Law on investment;

b) Ensure national defense and security in accordance with this Law;

c) Comply with regulations of the law on land and conditions for receipt of land use rights and conditions for use of land on islands or border or coastal communes. 

Important note: Foreign investors in restricted sectors must satisfy the market access conditions under Clause 3, Article 9 of the 2020 Vietnamese Law on Investment. 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.

1.2. Capital Transfer Procedure for Foreign Investors

• Legal Due Diligence (LDD): Review of the target company’s legal status, corporate documents, licenses, assets, tax compliance, labor matters, and potential disputes to identify legal risks.
• Execution of Capital Transfer Agreement: The parties negotiate and sign a capital or share transfer agreement, which may be notarized or certified depending on the transaction structure.
• Regulatory Approval (if applicable): For transactions subject to M&A approval, foreign investors must obtain approval from the competent investment authority prior to the ownership change.
• Enterprise Registration Amendment: Update of shareholder or member information on the Enterprise Registration Certificate.
• Tax Declaration and Payment: Fulfillment of tax obligations, including personal income tax or corporate income tax arising from the transfer.

2. Why legal counsel is essential for foreign capital transfer?

Why legal counsel is essential for foreign capital transfer?

Foreign capital transfer transactions involve multiple regulatory layers and practical risks. Professional legal support plays a critical role in ensuring transaction validity and protecting investor interests.

2.1. Ensuring legal compliance

– The lawyer advises on foreign investors’ rights and obligations, highlighting market access (for conditional business sectors), national defense and security, and land use rights; provides details of the required FDI capital account that must be opened at a Vietnamese bank to process share acquisition payments.

– The lawyer assists in drafting precise legal documents, with specific clauses outlining the parties’ rights, obligations, and penalties for breach, thereby ensuring an efficient transaction and minimizing the risk of disputes.

– The lawyer guides clients through the procedures for capital transfer, preventing deficiencies that could affect the transaction’s validity.

2.2. Protecting clients’ right and legitimate interests

– The lawyer conducts Legal Due Diligence (LDD) on the target company, identifying legal issues such as missing business licenses, non-compliant projects, and unresolved disputes, and proposing appropriate solutions to avoid future liability.

– The lawyer works closely with financial experts (such as auditors and valuation specialists) to negotiate a fair purchase price, helping the client avoid overpaying.

2.3. Saving time, cost, and effort

The lawyer liaises with competent authorities on behalf of the clients, promptly handling obstacles to keep the process on track, thereby saving the client time and cost.

2.4. Advising on related rights and obligations

The lawyer advises on tax declaration and payment procedures, ensuring tax and financial adherence; providing guidance on subsequent filings such as M&A approval, adjustment of the Investment Registration Certificate (IRC), and changes to contents of the Enterprise Registration Certificate.

2.5. Ensuring compliance within a dynamic legal landscape

The lawyer actively tracks crucial legal updates, providing timely revision of all documents to safeguard the transaction in the context of economic integration.

3. Legal counsel for foreign investors’ capital transfer at Hung Phi Law Firm

Legal Services for Foreign Capital Transfer at Hung Phi Law Firm

Hung Phi Law Firm is a trusted law firm in Vietnam with strong expertise in foreign investment and M&A transactions. We provide end-to-end legal services for foreign investors’ capital transfer, including:

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

Our lawyers combine solid legal expertise with a deep understanding of Vietnam’s business environment, enabling us to identify potential risks early and propose effective, commercially viable solutions.

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

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4. Why clients choose Hung Phi Law Firm

Why clients choose Hung Phi Law Firm

4.1. Experienced and Skilled Lawyers

The lawyers at Hung Phi Law Firm are equipped with expertise, a broad knowledge base and an in-depth comprehension of law on investment. With long-standing experience in advising on complex, cross-border capital transfer transactions, they will handle your legal requests in a professional manner.

4.2. Reasonable, transparent costs

When using our services, clients will be informed of the service fees publicly, transparently, and reasonably for each case or matter. We accommodate your financial needs with flexible payment terms to ensure clients feel secure and comfortable with our service. 

Hung Phi Law Firm guarantees that no further costs will arise after the fee has been mutually agreed upon in the service contract.

4.3. Commitment to client information confidentiality

All client information is guaranteed to be fully confidential by Hung Phi Law Firm. Hung Phi Law Firm will not disclose any information to any third party without the client’s explicit consent. 

4.4. Professional and attentive service

At Hung Phi Law Firm, we are fully devoted to our work and wholeheartedly dedicated to our clients. We consistently strive to ensure our clients feel confident, satisfied, and secure, confident that their legal issues are handled with the highest level of professionalism and efficiency. 

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The above are the information regarding PROFESSIONAL SERVICES FOR FOREIGN CAPITAL TRANSFER that Hung Phi Law Firm sends to our Clients. Should you have any questions concerning this matter, or require legal advice for your specific case or incident, please do not hesitate to contact the lawyers of Hung Phi Law Firm today for our timely support and consultation.

Contact Information:

Hung Phi Law Firm

Phone: (+84) 962 75 28 38

Email: luathungphi@gmail.com

Website: hungphi.vn

Sincerely,