Vietnam’s intensive integration into the global economy has opened up numerous opportunities for foreign investors. Among these, the transfer of capital investment to foreign investors is one of the most common forms for foreign investors to participate in or restructure their investments in Vietnam. However, such transfer is a complex transaction subject to strict regulation under Vietnamese law. NPLaw is willing to analyze the current legal framework governing the investment capital transfer to foreign investors.

I. Current situation of the transfer of capital investment to foreign investors

At present, there are a lot of large transfer transactions on capital investment that have taken place in Vietnam across various sectors, ranging from technology and real estate to manufacturing. Accordingly, foreign investors are actively seeking opportunities to acquire stocks and expand market shares. However, alongside these benefits, potential legal risks, such as lack of transparency in information disclosure, inaccurate valuation of capital, prolonged approval processes, or even rejection due to failure to meet investment conditions also arise significantly. 

II. Understanding of the transfer of capital investment to foreign investors 

1. The importance of the capital investment transfer to foreign investors

The transfer of capital investment to foreign investors plays a particularly important role for Vietnam’s economy collectively and the growth of domestic enterprises individually.

First, it enables local enterprises to access substantial sources of foreign capital, thereby resolving financial challenges. Additionally, foreign investors often bring advanced management expertise, cutting-edge technologies, and international networks that enhance competitiveness and facilitate market expansion for Vietnamese enterprises.

Conversely, foreign investors are allowed to acquire the investment capital to directly participate in local companies representing a highly anticipated strategic step, allowing them to seize investment opportunities, strengthen their presence in Vietnam’s market, and foster economic cooperation and development between nations.

Thus, in short, the capital investment transfer is not merely a financial transaction but also a connection for technology transfer, efficiency enhancement on investment, and a vital component in long-term development strategies of enterprises. 

2. Main considerations in the capital investment transfer to foreign investors

To ensure a smooth and lawful capital transfer to foreign investors, the following important conditions must be observed:

  • Identifying the legal form of investment capital (capital contribution, stocks).
  • Determining the type of enterprise and business line involved.
  • Complying with market access conditions applicable to foreign investors.
  • Conducting legal due diligence on the enterprise and contracts to assess risks and develop solutions.
  • Completing the approval procedures required by competent authorities, implementing the transfer procedures, and fulfilling financial obligations in accordance with the law.

Adhering to these considerations minimizes legal risks and ensures lawful and successful investment activities.

III. Legal provisions governing the transfer of capital investment to foreign investors

1. Key regulations

When transferring capital investment to foreign investors, the following legal provisions should be carefully observed:

  • Conditions, forms, and procedures for capital contribution, share purchase, and acquisition of equity by foreign investors (Articles 24, 25, and 26 of the Law on Investment 2020, further detailed in Chapter IV of Decree No. 31/2021/ND-CP on investment project implementation).
  • Registration for changes in enterprise registration details after the transfer (Article 31 of the Law on Enterprise 2020, detailed in Chapter V of Decree No. 168/2025/ND-CP on dossiers, order, and procedures for registration or notification of enterprise registration changes).
  • Fulfillment of financial obligations as prescribed by law.

Understanding these regulations is essential to ensure that capital transfer transactions are lawful and effective.

2. Legal risks associated with the capital investment transfer to foreign investors

The capital investment transfer to foreign investors may expose parties to several legal risks if it isn’t carefully executed, as follows:  

  • The transaction being rendered invalid or ineligible for approval (e.g., failure to meet conditions in restricted business lines, or lack of approval from the competent authorities).
  • Contractual disputes arising from ambiguous or conflicting terms.
  • Issues related to financial obligations, including taxation and the remittance of funds abroad.

To mitigate these risks, investors should thoroughly understand legal regulations and consider seeking professional legal counsel for legal support. 

3. Conditions for foreign investors to acquire capital investment

Under Article 9 of the Law on Investment 2020, foreign investors are generally subject to the same market access conditions as domestic investors, except in the following cases:

  • Sectors without opening to market access yet.
  • Sectors with conditional market access.

The market access conditions applicable to foreign investors in restricted sectors include:

  • The ownership ratio of charter capital by foreign investors in economic organizations;
  • Forms of investment;
  • Scope of investment activities;
  • Capacity of the investor and participating partners;
  • Other conditions under laws, National Assembly resolutions, Standing Committee of the National Assembly resolutions and ordinances, Government decrees, and international treaties to which Vietnam is a member.

Accordingly, foreign investors must satisfy these conditions when investing in Vietnam in general, and specifically when acquiring shares or equity in local companies.

IV. Questions on the transfer of capital investment to foreign investors

1. Could unclear terms in a capital transfer agreement affect the approval process?

Commonly, competent authorities shall assess the legality and compliance of the transaction with investment and corporate laws. 

However, ambiguous terms in a capital transfer agreement may negatively impact the review and approval process by competent authorities, leading to requests for explanation, supplementation of documents, or rejection. It prolongs the process and delays the transaction.

Thus, drafting clear and transparent agreements is critical to ensuring the smooth approval process.

2. Is consent from other stakeholders required when transferring capital investment to foreign investors?

It depends on the type of enterprise and the provisions of the company charter:

  • Limited Liability Companies: A member of a multi-member limited liability company may transfer all or part of their capital contribution to another party. However, other members of the company have pre-emptive rights to purchase them within 30 days. Only if the remaining members decline or do not purchase the full portion, the capital contribution may be transferred to non-members under the same conditions (Article 52 of the Law on Enterprise 2020).
  • Joint Stock Companies: Common shareholders are generally free to transfer their shares, except where restrictions apply under the law or the company charter (Article 127 of the Law on Enterprise 2020).

Thus, obtaining consent from relevant stakeholders, particularly other members or shareholders, remains crucial to protecting their rights and avoiding internal disputes.

3. Does the capital investment transfer affect the original investment registration certificate?

Pursuant to Clauses 2 and 6, Article 40 of the Law on Investment 2020, the Investment Registration Certificate (“IRC”) includes information on Investors, investment capital of the project (including the investor’s contributed capital and mobilized capital). 

Further, Clause 2, Article 41 stipulates: Investors shall implement procedures for amendment to the investment project in the Investment Registration Certificate if such an adjustment results in changes to the contents of the Certificate.

Therefore, the capital transfer that alters investor identity or project capital requires amendments. 

4. What taxes apply to capital investment transfer transactions?

Capital investment transfer transactions with foreign investors may take tax obligations for both the transferor and transferee, including:

  • Corporate income tax on the capital transfer transaction (Clause 2, Article 3 of the Law on Corporate Income Tax 2008, amended in 2013, 2015; and Point a, Clause 2, Article 3 of the Law on Corporate Income Tax 2025, effective October 1, 2025).
  • Personal income tax on the capital transfer (Clause 4, Article 3 of the Law on Personal Income Tax 2007).

Enterprises and investors should proactively calculate applicable taxes to avoid tax liabilities or late-payment sanctions.

5. In what cases may the capital investment transfer to foreign investors be rejected?

Authorities may refuse to approve or register capital transfers to foreign investors in the following cases:

  • Failure to meet market access conditions in restricted sectors.
  • Breach of ownership limits, investment forms, scope of activities, investor capacity, or partner conditions.
  • Failure to comply with other statutory conditions set forth in laws, National Assembly resolutions, Standing Committee resolutions and ordinances, Government decrees, or international treaties to which Vietnam is a member. 

V. Should legal counsel be engaged for the capital investment transfer to foreign investors? 

The capital investment transfer to foreign investors involves numerous complex procedures and regulations. With an experienced team of lawyers and legal specialists, NPLaw offers reliable and professional legal services to ensure maximum protection of clients’ lawful rights and interests.

For legal support, you may contact NPLaw for consultation and assistance.