A joint venture in Vietnam is no longer a legal form of its own. It is an "economic organisation with foreign investment capital", one with a foreign investor among its members or shareholders; in practice an ordinary limited liability company (LLC) or joint stock company under the Law on Enterprises (Article 3(22) of the Law on Investment 143/2025/QH15; Article 72(1) of Decree 96/2026/ND-CP). The joint venture agreement between you and your Vietnamese partner is a private contract. It is not filed with the investment registration certificate (IRC) application and binds only its signatories (Article 401(2) of the Civil Code); the company itself runs on its charter.
That split drives most of the negotiation. Anything that must bind the company has to be written into the charter in a form the Law on Enterprises accepts; anything that only binds the partners can live in the joint venture agreement, under foreign law if you want. And some rules sit in the statute and cannot be bargained away.
Why a joint venture in Vietnam is no longer a separate legal form#
Older precedents and many templates still circulating were drafted for the Law on Foreign Investment of 1996. That law created a separate "joint venture enterprise" set up on the basis of a joint venture contract (Article 2(7) and (10)), listed it as one of three investment forms (Article 4), required the foreign side to contribute at least 30% of legal capital (Article 8), and made the board decide the appointment of the general director, charter amendments and borrowing unanimously (Article 14(1)).
None of this survives. Article 18 of the current Law on Investment lists four forms: establishing an economic organisation; contributing capital to or buying shares in one; carrying out a project; and a business cooperation contract (BCC). There is no minimum foreign stake and no statutory unanimity. If your partner hands you a JV contract with a "board of management" in an LLC and "legal capital", it predates the current framework and will not mesh with a charter drafted today.
Setting up a joint venture in Vietnam: new company or buy-in#
| New company | Buy-in to an existing Vietnamese company | |
|---|---|---|
| Investment procedure | IRC for the foreign investor's project (Article 26(1)(a) of the Law on Investment). Either IRC first, or company first with the IRC due within 12 months (Article 19(2); Article 72(4) of Decree 96/2026) | No IRC (Article 26(2)(c)). Prior registration of the acquisition where Article 21(3) applies; the authority answers within 10 working days (Article 76(4) of Decree 96/2026) |
| Is the JV agreement filed? | No. The IRC file requires a BCC contract only for BCC projects (Article 32(1) and Article 39(1) of Decree 96/2026) | The registration file includes a "document of agreement in principle" on the acquisition (Article 76(3)(c)); a short investment agreement usually serves |
| Main risk | The partner is late or unable to transfer its in-kind contribution, typically land | Legacy liabilities of the target; needs legal due diligence and a share purchase agreement |
| Detail | Setting up a foreign-owned company | Foreign investor buying shares, share purchase agreement |
Where the foreign side holds 50% or less, whether a new JV needs an IRC has no clear answer. On the IRC-first route the project is the foreign investor's, so an IRC is required (Article 26(1)(a)). On the company-first route the texts pull apart: Article 72(4) of Decree 96/2026 requires an IRC within 12 months with no ownership carve-out; but once formed, the project is the company's (Article 72(1), second paragraph), projects of a company with 50% or less foreign capital need no IRC under the Law itself (Article 26(2)(b)), and the Decree's rule on reorganised companies applies Article 72(4) only to companies above 50% (Article 60(6)(b)). The cautious course is to plan for an IRC and confirm with the registration authority (the Department of Finance or the zone management board) before choosing the company-first route.
If you want to cooperate without a company at all, the vehicle is a BCC; see business cooperation contract. A bidding consortium is something else again: it is a contractual grouping of contractors for one tender, and for international tenders a foreign contractor must form one with a Vietnamese contractor or use Vietnamese subcontractors unless the Government provides otherwise (Article 5(1)(i) of the Law on Bidding 22/2023/QH15, as amended by Law 90/2025/QH15).
LLC or joint stock company: the default vetoes in a Vietnam joint venture company#
A two-party Vietnam joint venture company is usually a multi-member LLC (2 to 50 members, Article 46 of the Law on Enterprises), because a joint stock company needs at least three shareholders (Article 111(1)(b)). The two forms come with very different default voting rules, and those defaults decide who holds a veto before the JV agreement adds anything.
| Default rule | Multi-member LLC | Joint stock company |
|---|---|---|
| Quorum, first call | Members holding at least 65% of charter capital; the charter sets the exact figure (Article 58(1)) | More than 50% of voting shares (Article 145(1)) |
| Ordinary resolutions | At least 65% of the capital of members present, unless the charter sets a different ratio (Article 59(3)(a)) | More than 50% of votes of shareholders attending and voting (Article 148(2)) |
| Special-majority matters | At least 75%: charter amendments, reorganisation, dissolution, sale of assets worth 50% or more (Article 59(3)(b)) | At least 65%: share classes, business lines, management structure, investments or sales of 35% or more of assets, reorganisation, dissolution, other matters the charter adds (Article 148(1)); other charter amendments need only more than 50% (Article 148(2)) |
| Sale to a third party | Must first be offered to the other members for 30 days (Article 52(1)) | Free, except founder restrictions and charter restrictions noted on the share certificate (Article 111(1)(d), Article 127(1)) |
Applied to a two-party deal where both sides attend and vote:
| Your stake | LLC: what you can pass alone | Joint stock company: what you can pass alone |
|---|---|---|
| 51% or 60% | Nothing (below 65%) | Ordinary resolutions, including most charter amendments; not Article 148(1) matters |
| 70% | Ordinary resolutions; not charter changes (below 75%) | All shareholders' meeting resolutions (board seats still go by cumulative voting unless the charter says otherwise, Article 148(3)) |
| 75% or more | Everything | Everything |
So in an LLC, a Vietnamese partner with 40% holds a default veto over almost every decision. If you are the majority and need to run the business, you will want lower ratios: Article 59(3) lets the charter set "a different ratio" and states no floor, so in our reading a lower ratio is allowed, but confirm with the business registration office first. If you are the minority, you want the defaults kept, and in a joint stock company you should move charter amendments into the 65% group via Article 148(1)(e).
The trap is attendance. In an LLC the second call needs only 50% of charter capital and the third call has no quorum at all (Article 58(2)(a) and (b)), and resolutions are counted on the capital of members present (Article 59(3)). A 60% holder who calls a second meeting the minority does not attend holds 100% of the votes cast. Joint stock companies work the same way (Article 145(2) and (3)). The safer protection is a charter that raises the quorum for the second and third calls on reserved matters, which Article 58(2) expressly allows ("unless the charter provides otherwise"). Setting the threshold for reserved matters as a share of total charter capital rather than capital present is, in our reading, also possible, but there is no guidance on it.
Foreign ownership limits in Vietnam and the 50% threshold#
Sector caps. Foreign investors get the same market access as Vietnamese investors except in the sectors listed in Appendix I of Decree 96/2026 (Article 17(1) to (3)). Conditions can be an ownership cap, a required form of investment, a limited scope, or requirements on the investor or the partner (Article 8(3) of the Law on Investment). Examples: container handling (other than at airports) only through a joint venture with foreign capital up to 50%; advertising only through a joint venture or BCC with a Vietnamese partner licensed for advertising. How to check a given sector is covered in market access conditions.
Two rules on foreign ownership limits in Vietnam are often missed. A company in several restricted sectors must meet the conditions of all of them (Article 17(6)), and where treaties set different caps for different sectors the lowest cap applies to the whole company (Article 17(10)(d)): adding one minor business line capped at 49% caps the entire JV at 49%. The cap is also aggregate across all foreign investors in the company (Article 17(10)(a)).
The 50% threshold. Where foreign investors hold more than 50% of charter capital, the JV itself follows the procedures for foreign investors when it buys into another company or carries out another project (Article 20(1) of the Law on Investment), is subject to market access conditions also when it sets up another company or signs a BCC (Article 16(1)(b) of Decree 96/2026), and its projects need an IRC (Article 26(1)(b)). At 50% or less it follows the domestic procedures (Article 20(2)). See what is an FDI company.
| Foreign side 49% | Foreign side 51% | |
|---|---|---|
| JV sets up a subsidiary or buys shares elsewhere | Domestic procedure | Foreign-investor procedure and market access conditions |
| New project of the JV | IRC not mandatory | IRC required |
| Foreign side buys a further 2% | Prior registration, because foreign ownership goes above 50% (Article 21(3)(b)) | Prior registration, because foreign ownership rises when already above 50% (Article 21(3)(b)) |
| Investment dispute between the JV and the Vietnamese partner (on the wording of Article 13) | Vietnamese arbitration or courts (Article 13(2)) | Foreign or international arbitration also available (Article 13(3)) |
This is why a Vietnamese partner may ask for 51%, and a foreign investor may trade it for vetoes in the charter. Note that a JV formed by a foreign investor must open a foreign investment capital account (formerly the direct investment capital account, DICA) even if the foreign side holds only 30% (Article 6(1)(a) of Circular 38/2026/TT-NHNN); see direct investment capital account.
Choosing a Vietnamese JV partner: what to check before signing#
Your Vietnamese JV partner usually brings something you cannot buy easily: land, a licence, a distribution network or relationships. Each of those needs checking before it is priced into your stake.
- Land. A foreign company or individual is not itself a land user under the Land Law; the JV, as an economic organisation with foreign investment capital, is (Article 4 of the Land Law). The JV can lease land from the State or receive land use rights contributed by the partner, and the land often comes in as the partner's contribution. Whether that particular plot can be contributed depends on its origin and payment regime; see land use rights as capital contribution. The transfer is always governed by Vietnamese law, whatever law the JV agreement chooses (Article 683(4) of the Civil Code).
- Valuation. On formation, non-cash contributions are valued by the founding members unanimously or by a valuation firm whose figure is approved by more than half of them. If the value turns out to be inflated, all founding members are jointly liable to make up the shortfall (Article 36(2) of the Law on Enterprises). You share the risk of your partner's overvalued land.
- Licences. A sector licence held by the partner does not transfer to the JV. Where market access requires a licensed Vietnamese partner, check the licence covers what the JV will do.
- State ownership. A wholly state-owned partner, or a state capital representative, must also follow the rules on state capital when contributing capital or transferring its stake (Article 75(3) of Decree 96/2026). Expect extra approvals and valuation rules on entry and exit.
- Authority and group. Who signs for the partner, and which affiliates will trade with the JV. Related-party contracts are decided without the related member's vote (see below), so the partner's group structure matters.
A broader legal due diligence is standard when the JV is formed by buying into the partner's existing company.
The joint venture agreement and the charter: which one prevails#
Vietnamese law does not rank them; they bind different people. The charter binds the company and every member, including future ones; the joint venture agreement binds only the signatories. In our reading, a resolution passed in line with the charter but in breach of the JV agreement is still valid, because members can only seek annulment of resolutions that breach the law or the charter (Article 49(2)(d) and Article 151 of the Law on Enterprises); your remedy is a claim against your partner. The general analysis is in our handbook on the shareholders agreement and the company charter.
The practical rule: anything that must bind the company goes into the charter. Article 24(2) of the Law on Enterprises already has slots for it: management structure (point e); the number and powers of each legal representative (point g); how decisions are passed and the principles for resolving internal disputes (point h); the resolutions against which a dissenting member may require the company to buy back its stake (point k; Article 51(1)(c)), a right that depends on voting against a resolution and so cannot replace a deadlock buy-sell between the partners; profit distribution principles (point l); and dissolution (point m).
Keep in the joint venture agreement what does not need to bind the company or should stay private: valuation formulas, parent guarantees, offtake commitments, non-compete, penalties. Enterprise registration documents must be in Vietnamese and for bilingual documents the Vietnamese text is the one used for registration (Article 10(1) and (3) of Decree 168/2025/ND-CP); a bilingual charter should say the Vietnamese text prevails. The JV agreement should oblige the parties to vote to amend the charter if a conflict is found, and say that between the parties the agreement prevails.
Negotiating a joint venture in Vietnam clause by clause#
Conditions precedent#
The joint venture agreement is usually signed before the company exists. Make contribution obligations conditional on the IRC, the enterprise registration certificate, confirmation of market access, merger clearance where needed, sector licences and clean land documents, with a long-stop date and an agreed split of sunk costs. Leases signed before incorporation pass to the company once registered unless agreed otherwise (Article 18(1) and (2) of the Law on Enterprises).
Capital, in-kind contributions and funding#
Members must contribute in full and in the promised form within 90 days of the enterprise registration certificate, excluding time for shipping, import and title transfer (Article 47(2); Article 113(1) for joint stock companies). Charter capital need not equal the project's investment capital; the balance is contributed or raised on the IRC schedule (Article 72(5) of Decree 96/2026). Build two timetables: charter capital within 90 days, and later funding through capital increases or member loans.
The statute already sets the default consequences of non-payment in an LLC: a member that contributes nothing ceases to be a member, a member that pays in part has rights only for what it paid, and the unpaid portion is offered for sale by decision of the members' council (Article 47(3)); the company must register the reduced capital within 30 days (Article 47(4)). If one partner contributes nothing, the company is left with one member, and failing to convert within six consecutive months is a ground for dissolution (Article 207(1)(c)). On a capital increase, a member that does not subscribe is diluted: its share is offered to the others unless the members agree otherwise (Article 68(2)). Switching the promised asset, for example from land to cash, needs approval of more than half of the other members (Article 47(2)), which in a two-party JV means your partner. Cash contributions must be transferred into the capital account (Article 4(4) of Circular 38/2026/TT-NHNN).
Governance and minority rights you cannot contract out of#
The joint venture agreement usually allocates the chair, the general director and the chief accountant. Three points are fixed by law:
- An LLC or joint stock company may have several legal representatives. If the charter does not divide their powers, each can bind the company alone, and at least one must reside in Vietnam (Article 12(2) and (3)). See legal representative.
- In a joint stock company the board decides by majority of directors present, with the chair's casting vote on a tie; the charter may only set a higher ratio (Article 157(12)).
- Reserved matters bind the company only when expressed as voting thresholds in the charter. List them concretely: annual budget, borrowing above a limit, appointing the general director, related-party contracts, change of business lines, investments in other companies, new capital.
Some member rights come directly from the statute and the charter can only extend them: the right to require the company to buy back the stake after voting against a charter amendment affecting members' rights or a reorganisation (Article 51(1)); the right of first refusal when another member sells (Article 52(1), which has no "unless the charter provides otherwise" wording, so in our reading it cannot be waived in advance); the rights of members holding 10% to call a meeting, inspect the books and ask the court to annul a resolution within 90 days (Article 49(2)); and the right to sue managers (Article 49(1)(g)).
Contracts between the JV and its own shareholders#
In an LLC, a contract between the company and a member or its related persons must be approved by the members' council, and the interested member does not vote (Article 67(1) and (2)); a contract signed without that approval can be declared void by a court (Article 67(3)). If the JV buys equipment or services from your parent company, your partner decides alone, even with 30%. Fix the core supply, offtake and licence agreements, with pricing, in the joint venture agreement together with a commitment to vote for them. See related-party transactions and transfer pricing.
Foreign investors often license technology and brand rather than contribute them, keeping ownership in the group and earning royalties. That route has its own registration and tax rules: technology transfer contract, foreign contractor tax. Non-compete undertakings between the partners need limits on scope, territory and time; see non-compete agreement.
Profits and repatriation#
Profits can be distributed only after taxes and financial obligations are met and the company can still pay debts falling due (Article 69). In an LLC, members share profits in proportion to their capital (Article 49(1)(c)); in our reading the charter cannot allocate them differently. A preferred return needs a joint stock company with dividend preference shares (Article 117). Foreign investors may remit profits and capital abroad once financial obligations are met (Article 11 of the Law on Investment); see profit repatriation. A minimum dividend policy in the JV agreement helps when the operating partner prefers to reinvest.
Transfers, deadlock and options#
Lock-up, tag-along, drag-along, put and call options and deadlock buy-sell mechanisms are analysed in the shareholders agreement handbook. Points specific to a JV with a foreign party:
- A foreign buyer must register in advance where the deal takes foreign ownership above 50%, raises it when already above 50%, or raises it in a conditional sector (Article 21(3) of the Law on Investment). A call option from 49% to 51% cannot close on exercise; make registration a condition and give the option a long enough window. No option can take you above a sector cap.
- A change of control at your parent level is not a transfer of the JV stake. If your partner wants protection, it will ask for a change-of-control clause.
- There is no statutory ground to dissolve a company for deadlock (Article 207(1) of the Law on Enterprises). A fixed term in the charter is a backstop: expiry without extension is a dissolution ground (Article 207(1)(a)), though a company cannot be dissolved while a dispute is pending before a court or arbitral tribunal (Article 207(2)).
Governing law and dispute resolution#
A JV agreement with a foreign party is a relationship with a foreign element (Article 663(2)(a) of the Civil Code). The parties may choose the governing law (Article 683(1)), and contracts with a foreign investor may adopt foreign law or international investment practice if that does not contravene Vietnamese law (Article 4(6) of the Law on Investment). Three limits apply:
- The organisation of the company and its relations with members follow the law of its nationality, which is Vietnamese law (Article 676(2) of the Civil Code). English law can govern the partners' obligations to each other, not the charter, voting or the members' register.
- Transfers of land use rights follow the law where the land is (Article 683(4)).
- Foreign law is not applied where its consequences contravene the fundamental principles of Vietnamese law (Article 670(1)(a)).
Disputes between investors where at least one is a foreign investor can go to Vietnamese courts, Vietnamese arbitration, foreign or international arbitration, or an ad hoc tribunal (Article 13(3) of the Law on Investment). Arbitration needs an arbitration agreement and a dispute within Article 2 of the Law on Commercial Arbitration. The parties choose the language where the dispute has a foreign element or a party is a foreign-invested enterprise (Article 10(2)), and for foreign-element disputes the tribunal applies the law the parties chose (Article 14(2)). A foreign award must be recognised by a Vietnamese court before it can be enforced in Vietnam (Article 424 of the Civil Procedure Code), and the application must be filed within three years of the award taking effect (Article 451(1)). The JV's assets are in Vietnam, so factor recognition time into your strategy. See commercial arbitration.
The arbitration clause in the JV agreement does not automatically cover internal corporate disputes. The charter must state principles for resolving internal disputes (Article 24(2)(h)), so put a matching arbitration clause there. One point for LLCs: annulment of a shareholders' meeting resolution can go to a court or arbitration (Article 151), but for a members' council resolution Article 49(2)(d) refers only to the court, and such a request falls within court jurisdiction (Article 31(1) of the Civil Procedure Code). An arbitration clause in the charter does not replace that right.
Exit routes#
- Sell to the partner or a third party, through the statutory right of first refusal in an LLC, with prior registration if the buyer is a foreign investor caught by Article 21(3). Tax: capital transfer tax.
- Require the company to buy back the stake in the cases of Article 51 or the charter; payment is allowed only if the company can still pay its debts, and if it cannot pay, the member may sell freely to anyone (Article 51(3) and (4)).
- A capital reduction returns capital pro rata to all members and only after two years of continuous operation (Article 68(3)(a)), so it cannot be used for one partner to leave alone; see reducing charter capital.
- Dissolution by resolution or on expiry of the term (Article 207(1)), only once all debts are paid and no dispute is pending before a court or arbitral tribunal (Article 207(2)). A partner that contributed land does not automatically get it back.
Does a joint venture in Vietnam need merger control clearance?#
It can. Two or more enterprises contributing part of their assets, rights and obligations to form a new enterprise is a joint venture and a form of economic concentration (Article 29(5) of the Competition Law). A joint venture created by buying into an existing company may instead be an acquisition if the buyer gains control, which can happen below 50% where the buyer can appoint most managers, amend the charter or decide key business matters (Article 29(4); Article 2(1) of Decree 35/2020/ND-CP). Broad reserved matters in the JV agreement are part of that assessment.
The parties must notify the National Competition Commission before implementation if any one of four thresholds is met (Article 33(1)). From 1 July 2026 to 28 February 2027, Government Resolution 66.18/2026/NQ-CP raises three of them: total assets, or total sales or purchases, in Vietnam of the enterprise or its affiliated group of VND 6,000 billion; transaction value of VND 2,000 billion; combined market share stays at 20% (the base figures in Article 13(1) of Decree 35/2020 are VND 3,000, 3,000 and 1,000 billion). Assets and turnover are measured at group level, so a small JV of a large group can still trigger a filing. Decree 35/2020 has no special rule for valuing a JV transaction; our reading is to use the total committed contributions and to check with the Commission when close to the line. Process and penalties: economic concentration.
Joint venture agreement: a clause outline#
We do not publish a fill-in template, because what matters is the charter that goes with it and the actual stakes. This outline shows which clauses must also appear in the charter:
| # | Clause group | Main content | Also in the charter |
|---|---|---|---|
| 1 | Parties, purpose | Signing entities, business lines, location, company type | Business lines, name, head office |
| 2 | Conditions precedent | IRC, registration, market access, merger clearance, land, licences, long-stop date | No |
| 3 | Capital | Charter capital, investment capital, in-kind assets, valuation, 90-day schedule | Charter capital, each member's stake |
| 4 | Further funding | Capital increases, member loans, guarantees, default | Partly |
| 5 | Governance | Seats, chair, general director, legal representatives, quorum, thresholds, reserved matters | Yes |
| 6 | Deadlock | Escalation, buy-sell between the partners | No; the charter only lists resolutions that trigger a dissenting member's buy-back right (Article 24(2)(k)) |
| 7 | Core contracts | Supply, offtake, licences, management fees | Approval of related-party contracts |
| 8 | Profits | Dividend policy | Profit distribution principles |
| 9 | Transfers | Lock-up, ROFR, tag, drag, options, change of control | Transfer restrictions |
| 10 | Non-compete, confidentiality | Scope, duration | No |
| 11 | Default | Penalties, damages, call option on defaulter's stake | No |
| 12 | Termination | Termination events, term, liquidation | Term, dissolution cases |
| 13 | Law and disputes | Governing law, arbitration, language | Internal dispute resolution |
| 14 | Precedence | Agreement prevails between parties; duty to amend the charter | No |
Two mistakes we see in translated templates: large fixed penalties that ignore the 8% cap that may apply between traders (see penalty for breach of contract), and reserved matters that exist only in the joint venture agreement while the charter keeps the default thresholds.
LexData structures joint ventures, drafts the JV agreement with a bilingual charter and handles the investment filings through our company formation and commercial contracts services, with legal due diligence where the JV is formed by buying into a Vietnamese company.
