The payment of shares is one of the fundamental rights of shareholders, protected and regulated under Vietnamese law. So, how are the current regulations on share payment implemented? The following article by NPLaw clarifies key legal aspects from payment conditions and implementation procedures to related issues shareholders should be aware of.

I. Current situation of payment of shares

In 2025, many Vietnamese enterprises distributed high cash dividends, reflecting positive business results and shareholder-friendly policies. For instance, FPT Online finalized the right to receive a 100% cash dividend on May 26, 2025. Similarly, Saigon Transport and Parking Joint Stock Company and Northern Textile and Garment Fabric Joint Stock Company announced cash dividend payments at rates of 25% and 20%, respectively.

In summary, payment of shares practices in Vietnam are diverse across enterprises. Nevertheless, to protect shareholders’ rights and ensure market transparency, clearer legal provisions are required, especially regarding dividend payments in shares.

II. Legal regulations on payment of shares

1. What is payment of shares?

The term of payment of shares is not commonly used in Vietnamese corporate law. However, it can be understood as the payment of dividends to shareholders of a joint-stock company. It is a key financial activity that reflects profit distribution among shareholders. 

Dividend payment refers to the distribution of net profits to shareholders in cash or other assets, representing a lawful entitlement of shareholders.

2. Conditions for payment of shares

Under Article 135 of the Law on Enterprise 2020, as amended in 2022, payment of shares is classified into two categories:

- For preferred shares: Dividends on preferred shares are paid under specific conditions applicable to each type of preferred share, which must be detailed in the company’s charter or issuance terms.

- For ordinary shares: Dividends on ordinary shares are determined based on the company’s net profit and distributed from retained earnings after fulfilling financial obligations. To distribute dividends, a company must satisfy all the following conditions:

  • Fulfilling all tax obligations and other financial duties in accordance with the law;
  • Fully allocating statutory funds and offsetting any accumulated losses (if any), as required by law and the company’s charter;
  • Ensure that, after dividend payment, the company remains capable of meeting due debts and other financial obligations.

Dividends may be paid in cash, shares, or other assets, depending on the company’s charter. Cash payments must be made in Vietnamese dong and in compliance with lawful payment methods.

3. Methods of payment of shares

According to Clause 3, Article 135 of the Law on Enterprises 2020 (as amended in 2022), dividends may be distributed in cash, company shares, or other assets as provided in the company’s charter. Where dividends are paid in cash, payment must be made in Vietnamese dong through lawful methods prescribed by law.

III. Clarification on certain issues regarding payment of shares

1. How is payment of shares implemented?

Point o, Clause 2, Article 153 and Point b, Clause 2, Article 138 of the Law on Enterprise 2020 (as amended in 2022), the dividend rate for each type of share is proposed by the Board of Directors and approved by the General Meeting of Shareholders. The Board of Directors also determines the payment schedule and procedure. The process includes:

- Step 1: Board of directors meeting

  • The Board convenes to propose the rate, which is then submitted to the General Meeting of Shareholders for approval.

- Step 2: General meeting of shareholders

At the annual General Meeting of Shareholders, shareholders consider and approve the plan, including the rate for each type of share (Point e, Clause 3, Article 139 of the Law).

  • For cash or asset dividends: Approval requires consent from shareholders holding more than 50% of voting shares attending the meeting (subject to the charter).
  • For share dividends: Approval requires consent from shareholders representing at least 65% of votes (subject to the charter).

- Step 3: Preparation of the list of eligible shareholders

  • Under Clauses 4 and 5, Article 135 of the Law, the Board must prepare the list of shareholders entitled to dividends, determine dividend amounts for each share class, and specify the time and method of payment. It must be completed no later than 30 days before payment.

Note: If a shareholder transfers shares between the list-finalization date and the payment date, the transferor remains entitled to the dividend.

- Step 4: Notice of payment

The company must send a notice to shareholders via secure means at least 15 days before the payment date, to the address registered in the shareholder register. The notice must include:

  • Company name and head office address;
  • Shareholder information (individual or organization);
  • Number of shares and corresponding dividend amount;
  • Payment date and method;
  • Signatures of the Chairperson of the Board and the company’s legal representative.

- Step 5: Dividend distribution

  • Dividends must be fully paid to shareholders within six months from the conclusion of the annual General Meeting of Shareholders. Payment methods follow those indicated in the notice.

Hence, the dividend payment process must be conducted in strict compliance with the law to prevent disputes and ensure transparency in corporate financial activities.

2. The payment ratio for shares 

The payment ratio represents the percentage between the total dividends distributed to shareholders and the company’s net income. Such a ratio helps investors assess profit-sharing levels and reflects the company’s financial strategy and reinvestment capacity.

  • For preferred shares: The ratio follows specific conditions for each class.
  • For ordinary shares: The payment ratio (%) = Dividend per share / Earnings per share = Dividends / Net income.

3. Is the offering procedure required when paying dividends in shares?

When dividends are paid in shares, under Clause 6, Article 135 of the Law on Enterprise 2020, the company is not required to implement the share offering procedures stipulated in Articles 123–125 of the Law. However, it must register an increase in charter capital corresponding to the total par value of the shares issued for payment of dividends within 10 days after completion.

Such a payment distributes profits without altering ownership ratios, so no share offering procedure is required as in public or existing shareholder offerings.

4. Dividend payment process for non-executive shareholders

The share payment process for non-executive shareholders is identical to one for other shareholders (see Section III.1 above).

IV. Legal consulting services on payment of shares

The above article by NPLaw provides an overview of legal issues relating to payment of shares. Should readers require further clarification or legal assistance, please contact NPLaw using the following details: