Corporate acquisition and merging in Vietnam
Except for the regulations of the Law on Enterprises No. 59/2020/QH14 on selling Private enterprises, there is no obvious legal regulation on trading enterprises for the models of Joint-stock company, Limited liability company, Partnership, Parent – child company or economic group. The corporate acquisition activities over these models are mainly implemented through the mechanism of trading shares, capital contributions and owners’ equity in order to reach the governing percentage over the organization and operation each enterprise.
The merging is specified in a number of more obvious regulations included in Law on Enterprise No. 59/2020/QH14. Although these regulations have not satisfied the expectations of investors, they have formed a significant legal corridor for the merging, division, separation and consolidation activities of enterprises.
In addition to regulations specified by the Law on Enterprise on trading share, capital contribution and owner’s capital, corporate acquisition activities are also regulated by the law on investment and specialized law for conditional businesses (in terms of business conditions, capital ownership ratio of foreign investors) and regulations specified in the Securities Law on purchase offering, offering and procedures for shares transferring. Moreover, in some cases, trading transactions shall also comply with the provisions of the Law on Competition to prevent monopoly and economic concentration.
We only generally and briefly consider for legal aspects of enterprise trading and merging activities in Vietnam within this article for clients as reference, BFSC Law Firm’s lawyers will give specific consultation when providing any legal services.