The regulations applicable to M&A activities in Vietnam are scattered among several laws. The Civil Code 2015 and the Law on Enterprises 2014 provide legal principles and regulations governing enterprises, the transfer of property in or ownerships over such enterprises, and any agreements, including M&A agreements.
For an acquisition performed by a foreign investor or a foreign-invested company in Vietnam, investment registration procedures under the Law on Investment 2014 must be carried out. If the acquisition target is a public company, the acquisition must be conducted through a public tender offer which is regulated under the Law on Securities 2006. In a case where the combined market power of the acquirer and the target company is substantial in any market (i.e. from 30% to 50% after M&A), the acquisition must be notified to competent authority (i.e. the Administrative Body for Competition) in line with the Law on Competition 2004.
There are a number of legal issues which an investor, especially a foreign acquirer, should be aware of:
Different licensing procedures applied to different types of stakes (foreign invested companies would differ from domestic ones, public companies would differ from private companies, buying State owned stakes would be differ from private ones…);
Different interpretation and implementation of local licensing authorities to the international treaties such as Commitments of Vietnam on joining World Trade Organization;
There are several conditional business sectors that are governed by sector-focused laws. An investor acquiring 5% shares of a Vietnamese credit institution must perform a procedure seeking the approval of the State Bank of Vietnam as specified under Decree 01/2014/ND-CP on share acquisition of foreign investors in credit institutions. A transfer of more than 10% of shares or a merger of an insurance company must have the approval of the Ministry of Finance, in line with Decree 73/2016/ND-CP guiding the implementation of the Law on Insurance Business 2000. A merger of a securities investment company must comply with the merging procedure under the Law on Securities 2006. A merger of a foreign-owned education institution must comply with the merging procedure set out under Decree 73/2012/ND-CP on foreign investment in education.
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