(Updated October 2026)
Introduction: In Vietnam M&A, Transaction Structure Is the First Strategic Decision
For multinational corporations considering Vietnam M&A, one of the first questions to settle is the choice of transaction structure: a Share Deal or an Asset Deal.
The structure determines the liabilities the buyer inherits, the taxes on the transaction, the approvals and procedures required, and the treatment of employees and land. The choice therefore goes beyond procedure and tax. It affects deal feasibility and the risks the buyer takes on.
This article explains why Asset Deals are often discussed in the early stages of a Vietnam M&A transaction structure review. It then compares Asset Deals with Share Deals across taxation (VAT, corporate income tax, personal income tax, depreciation, and tax loss carryforwards), foreign investment and merger control procedures, labor, and land. The analysis is written for multinational buyers and reflects Vietnamese law as of October 2026.
In this article, the “selling company” is the company that sells its business in an Asset Deal, and the “selling shareholders” are the shareholders that sell their shares in a Share Deal.
Why Asset Deals Are Often Considered at the Outset of Vietnam M&A
In transactions involving privately held, owner-managed companies, buyers need to test internal controls, accounting practices, labor management, and licensing one by one in due diligence. Buyers are particularly cautious about legacy compliance risks, such as:
- Tax risks: back taxes arising from double bookkeeping, inconsistencies in VAT invoicing, or distorted revenue and cost recognition
- Labor risks: penalties and retroactive assessments arising from unpaid overtime, unpaid social insurance contributions, or procedural deficiencies in terminations
- Licensing risks: missing licenses required for the business, or breaches of license conditions
In a Share Deal, the buyer acquires the legal entity itself, so these latent liabilities come with the company. Representations, warranties, and indemnities can mitigate certain exposures, but their effectiveness is limited by caps, survival periods, and the practical ability to recover from the selling shareholders.
In an Asset Deal, the transfer agreement defines the assets and contracts the buyer takes over. Risk does not disappear, but the buyer can draw a contractual line around what it inherits. For this reason, Asset Deals receive more attention as compliance concerns grow. Employee transfers, however, follow procedures under the Labor Code, as discussed below.
Overview of Transaction Structure Options in Vietnam M&A
Key Differences Between Share Deals and Asset Deals
Share Deal
- The buyer acquires shares (or capital contributions in a limited liability company) and takes over the legal entity with its assets, contracts, licenses, and employees
- Historical liabilities, including undisclosed and contingent liabilities, transfer together with the company
- Under the new Investment Law (No. 143/2025/QH15, effective March 1, 2026), a foreign investor must register the capital contribution or share purchase with the investment registration authority before the change of shareholders is recorded, if any of the following applies (Article 21.3):
- The purchase increases foreign ownership in a company operating in a business line with market access conditions for foreign investors
- Foreign ownership exceeds 50% after the purchase, including any increase in a company already more than 50% foreign-owned
- The target holds land use rights on islands or in border, coastal, or other designated areas
- The review period for this registration is 10 working days from receipt of a complete dossier (Decree No. 96/2026/ND-CP, Article 76). The filing goes to the provincial Department of Finance where the target has its head office, or to the management board for companies in industrial parks and economic zones
Asset Deal
- The business is transferred through its individual components: assets, contracts, and employees
- The transfer agreement can limit the scope of assets and contracts the buyer takes over
- A foreign buyer without an existing Vietnamese entity to receive the business needs to set one up. As under the previous law, the new Investment Law requires an Investment Registration Certificate (IRC) for investment projects of foreign investors (Article 26.1), with a review period of 10 working days from receipt of a complete dossier (Decree No. 96/2026/ND-CP, Article 39.3). The new law also allows a foreign investor to incorporate the company before the IRC procedure (Article 19.2)
- Separate steps add to the workload: counterparty consents, new or amended licenses, employee transfers, and re-registration of real estate
A Procedure Common to Both: Merger Control Filing
Merger control under the Competition Law (No. 23/2018/QH14) covers not only share acquisitions but also acquisitions of assets sufficient to control another business (Article 29.4). According to the Ministry of Industry and Trade, Government Resolution No. 66.18/2026/NQ-CP raised the notification thresholds from July 1, 2026. The threshold for total assets or turnover in Vietnam rose from VND 3,000 billion to VND 6,000 billion, and the threshold for transaction value rose from VND 1,000 billion to VND 2,000 billion. The increase does not apply to transactions involving credit institutions, insurers, or securities companies. A transaction meeting a threshold must be notified before closing (Article 33.1).
Comparison of Tax Burdens
| Item | Share Deal | Asset Deal |
|---|---|---|
| VAT | Non-taxable (transfers of capital and shares) | 10% in principle; 8% for certain goods and services until December 31, 2026; transfers of land use rights are non-taxable |
| Tax on the gain | Depends on the type of selling shareholder (see below) | CIT on the selling company’s gain at the standard rate of 20% |
| Tax at the shareholder level | Not applicable (selling shareholders are taxed directly) | 5% personal income tax on dividends paid from after-tax profits to individual shareholders |
| Registration fee on land and buildings | No change of title to the company’s assets | 0.5% of the taxable value on re-registration (land leased with annual rent and similar cases are exempt) |
| Tax loss carryforwards | Remain with the target (up to 5 years) | Not available to the buyer |
In a Share Deal, the tax burden depends on the type of selling shareholder:
- An individual selling shares in a joint stock company: 0.1% of the transfer price (Personal Income Tax Law No. 109/2025/QH15, effective July 1, 2026)
- An individual selling capital contributions in a limited liability company: 20% of the gain, or 2% of the transfer price if the purchase cost cannot be determined (same law)
- A Vietnamese company: CIT of 20% on the gain
- A foreign company without a permanent establishment in Vietnam: 2% of the transfer price for capital contributions, and 0.1% for shares that qualify as securities (Decree No. 320/2025/ND-CP, Article 12.3). A Vietnamese buyer pays the tax on the seller’s behalf. If the buyer is also foreign, the target company pays it (same decree, Article 2.2)
The reduced CIT rates of 15% and 17% for small enterprises do not apply to gains on capital transfers or real estate transfers (Corporate Income Tax Law No. 67/2025/QH15, Article 18.3).
Compared with an Asset Deal, a Share Deal involves fewer procedures but carries historical risk with the company. An Asset Deal limits the scope of inherited risk but adds tax costs and procedures. The structuring decision starts from this trade-off.
Advantages of Asset Deals
Risk Segmentation and Practical Benefits
Greater Control Over Historical Tax and Labor Risks
The principal advantage of an Asset Deal is the ability to leave liabilities from prior years, such as back taxes and penalties, with the selling company.
By limiting the acquisition to the assets and contracts essential to ongoing operations, buyers reduce the likelihood of inheriting undisclosed liabilities. Where historical records are incomplete and due diligence cannot establish the full picture, this also makes it easier to explain the scope of inherited risk to an investment committee or senior management.
On labor, the transfer agreement should allocate past amounts owed to transferring employees, such as unpaid wages, and the buyer should review how this allocation interacts with the Labor Code procedures discussed below.
Ability to Establish a Clean Operating Framework from Day One
Where accounting or invoicing practices lack transparency, the post-acquisition challenge is to prevent improper accounting and invoicing from recurring.
An Asset Deal, implemented through a new subsidiary or an existing buyer-controlled entity, allows the business to run from Day One (the closing date) under the buyer’s standards, including:
- accounting policies and rules for revenue and cost recognition
- VAT invoicing and documentation procedures
- approval workflows and internal controls
In some transactions, starting with the buyer’s framework is more practical than remediating inherited practices during post-merger integration (PMI).
Depreciation Based on Acquisition Cost
In an Asset Deal, the buyer depreciates acquired fixed assets based on their acquisition cost, defined as the purchase price plus directly attributable costs (Ministry of Finance Circular No. 45/2013/TT-BTC, Article 4). If the acquisition cost exceeds the selling company’s book value, depreciation expense increases and the buyer’s CIT burden may decrease. In a Share Deal, the target’s existing book values carry over.
This benefit must be assessed on a net basis, together with VAT, registration fees, and the tax burden on the selling side discussed below.
Key Considerations and Drawbacks of Asset Deals
VAT, Tax Leakage, and Execution Risk
Tax Costs and Price Divergence
An Asset Deal changes both the buyer’s funding burden and the selling side’s net proceeds compared with a Share Deal, so the price expectations of buyer and seller tend to diverge.
From the buyer’s perspective:
- Asset transfers are subject to VAT at 10% in principle (Value-Added Tax Law No. 48/2024/QH15, Article 9.3, effective July 1, 2025). From July 1, 2025 to December 31, 2026, the rate is reduced to 8% for goods and services other than real estate business, finance, telecommunications, metal products, mining products, and certain other categories (National Assembly Resolution No. 204/2025/QH15). The rate from 2027 onward should be confirmed at the time of the transaction
- Transfers of land use rights are non-taxable. For transfers of buildings and other real estate, the land use fees or land rent paid to the State are deducted from the VAT base (VAT Law, Articles 5.7 and 7.1(h)). If that amount cannot be determined, the full transfer price becomes the VAT base (Decree No. 181/2025/ND-CP, Article 8.7)
- The buyer can credit VAT paid as input tax if it holds a VAT invoice and, for purchases of VND 5 million or more, evidence of non-cash payment such as a bank transfer (VAT Law, Article 14.2; Decree No. 181/2025/ND-CP, Article 26). A new entity with a new investment project in its investment phase may obtain a refund if uncredited input VAT reaches VND 300 million or more. If the registered charter capital has not been fully contributed, however, the VAT is carried forward instead of refunded (VAT Law, Article 15.2; Decree No. 181/2025/ND-CP, Article 30)
- VAT is therefore a funding cost for the buyer when it can be credited or refunded, and an increase in acquisition cost when it cannot
- Re-registration of land and buildings incurs a registration fee of 0.5% of the taxable value (Decree No. 10/2022/ND-CP, Article 8.1). Land leased from the State with annual rent payments, or leased from a holder of land use rights, is exempt (same decree, Article 10.7)
From the seller’s perspective:
- Gains on asset sales form part of the selling company’s taxable income at the standard CIT rate of 20% (CIT Law No. 67/2025/QH15, Article 10.1, effective October 1, 2025). The reduced rates for small enterprises do not apply to gains on real estate transfers (Article 18.3)
- Dividends paid from the selling company’s after-tax profits to individual shareholders are subject to 5% personal income tax (PIT Law No. 109/2025/QH15). Dividends received by Vietnamese corporate shareholders are exempt from CIT (CIT Law, Article 4.7)
The selling shareholders measure an Asset Deal against the tax they would pay in a Share Deal. The gap is particularly large when individuals hold shares in a joint stock company. In a Share Deal, they pay 0.1% of the transfer price. In an Asset Deal, the selling company pays 20% CIT and the individuals pay a further 5% on the dividend, so the gap in net proceeds widens as the gain grows. Where individuals hold capital contributions in a limited liability company, or where the shareholder is a Vietnamese company, the gain is taxed at 20% in a Share Deal as well, and the gap narrows accordingly. Bridging this gap through price becomes a central point in commercial negotiations.
Inability to Transfer Net Operating Losses (NOLs)
In a Share Deal, the legal entity does not change, so the target’s tax loss carryforwards (NOLs) remain available for up to 5 consecutive years from the year after the loss arose (CIT Law No. 67/2025/QH15, Article 16.1).
In an Asset Deal, the losses stay with the selling company and are not available to the buyer. This structural difference should be factored into the price from the outset. Where accounting irregularities make historical losses unreliable, their amount also needs verification in a Share Deal.
Execution Complexity: Contracts, Licenses, and Employees
An Asset Deal transfers the business component by component, which requires:
- counterparty consents or re-execution of commercial contracts
- new licenses and permits, or transfers of existing ones
- transfers of employees
On employees, Article 43.1 of the Labor Code (No. 45/2019/QH14) requires the employer to prepare a labor usage plan when a sale of the business, or a transfer of ownership or use rights of the enterprise’s assets, affects the jobs of many employees. The plan lists the employees to be retained, retrained, or terminated, among others. The employer must consult the employee representative organization and publish the plan within 15 days of its adoption (Article 44). The current and successor employers are both responsible for implementing the adopted plan (Article 43.2).
In an Asset Deal that affects the jobs of many employees, the buyer therefore cannot decide alone which employees to take over, and the structure must be designed around this procedure.
Land and Factory Sites
In transactions involving factories, the treatment of land can decide whether the deal is feasible. This section covers land leased from the State with annual rent payments and land subleased from an industrial park developer. For such land, an Asset Deal transfers the buildings on the land together with the lessee’s position under the lease.
Under the Land Law (No. 31/2024/QH15), a company leasing land from the State with annual rent payments may sell its assets attached to the land, and the buyer may then lease the land (Article 34.1(c); Article 41.2(d) for foreign-invested companies). The conditions are that the assets were lawfully built and registered and that construction was completed in line with the approved plan (Article 46). The same treatment applies to land in industrial parks subleased with annual rent payments (Article 202.5).
If these conditions are not met, or if the sublease agreement requires the developer’s consent and the developer withholds it, the lessee’s position cannot be transferred, and an Asset Deal that moves the factory as a whole becomes infeasible. Transferability of the lease position should be confirmed early in due diligence.
When Does an Asset Deal Make Sense?
Syntax Partners’ Practical Decision Framework
Ultimately, the structuring decision comes down to one question:
Do the benefits of an Asset Deal (limiting exposure to historical risks, a clean operating framework from Day One, and higher depreciation) justify the additional tax costs and execution burden?
An Asset Deal tends to make sense when all 3 of the following conditions hold:
- Due diligence identifies material tax, labor, or licensing risks that representations, warranties, and indemnities cannot adequately cover
- Land lease positions, key contracts, and material licenses can be transferred in an Asset Deal
- The buyer’s additional costs and the reduction in the selling shareholders’ net proceeds can be absorbed through price adjustment
Syntax Partners recommends working through this question in 4 steps:
- Risk identification: Identify whether material risk exists in tax (VAT, revenue and cost recognition), labor, or licensing.
- Early feasibility assessment: Confirm whether land lease positions, key contracts, and material licenses are transferable in an Asset Deal, and identify the procedures required for employee transfers.
- Net economic analysis: Calculate the buyer’s additional costs in an Asset Deal (including whether and when VAT can be credited or refunded, and registration fees) together with the price adjustment needed to offset the reduction in the selling shareholders’ net proceeds. Factor in the higher depreciation and the loss of tax loss carryforwards, and weigh the result against the value of limiting historical risk.
- Post-acquisition integration fit: Assess which structure better supports effective control and sustainable growth after closing.
For foreign buyers, the timetable should also reflect whether each of the following is required: investment registration in a Share Deal, entity set-up and an IRC in an Asset Deal, and a merger control filing.
Conclusion: In Vietnam M&A, Structure Is the Strategic Foundation
The Vietnam M&A transaction structure determines the risks the buyer inherits, the tax burden, and the procedures required. Compared with an Asset Deal, a Share Deal involves fewer procedures but carries historical risk with the company. An Asset Deal limits the scope of inherited risk but adds VAT and other tax costs, Labor Code procedures, and conditions for transferring land lease positions. The choice shapes the price, the timetable, and the post-closing organization, so structure belongs at the start of a transaction rather than at the end as a legal or tax formality.
Syntax Partners is a Japan-based M&A advisory firm. As a financial advisor focused solely on advisory work, we act for only one side in any transaction: the seller or the buyer. On the sell side, we act as an advisor that maximizes the interests of sellers and owners, and we approach buyers in Japan and overseas. On the buy side, we support clients from researching and listing targets based on their strategy, through direct approaches to owners and parent companies, to negotiation and deal execution.
For multinational corporations evaluating a Vietnam M&A transaction structure and seeking to balance inherited risk against tax and execution burdens, we would welcome a discussion.
This article is for informational purposes only and does not constitute legal or tax advice. It reflects Vietnamese law as of October 2026. Please obtain advice from qualified local professionals before making any decision.