A private placement of shares in Vietnam is how a joint stock company (JSC) that is not a public company issues new shares to investors it has chosen: no offer through the mass media, and fewer than 100 investors (not counting professional securities investors) or professional securities investors only (Article 125(1) of the Law on Enterprises). The money goes to the company and its charter capital rises. For a foreign investor this is the usual route when the target needs cash rather than a change of owners: you subscribe for new shares instead of buying existing ones from a shareholder.
Three rules shape every deal. Existing shareholders have a pre-emptive right to the new shares in proportion to their holdings, and the company must offer them first (Article 125(2)(b)). A foreign investor may have to register the subscription with the investment registration authority before becoming a shareholder (Article 21(3) of the Law on Investment). And the company must register the new charter capital within 10 days after the offering closes (Article 123(4)). This guide is written from the foreign investor's side of the table; for the general charter capital increase framework (approvals, quorum, payment deadlines) see increase charter capital in Vietnam.
Private placement of shares in Vietnam vs buying existing shares#
A JSC raises capital by offering shares to existing shareholders, by private placement or by public offering (Article 123(2)); public offerings, and any offering by a public company, follow securities law (Article 123(3)). An investor can also buy shares already in issue. The three routes compare as follows:
| Rights issue to existing shareholders (Article 124) | Private placement (Article 125) | Purchase of existing shares (Article 127) | |
|---|---|---|---|
| Who receives the money | The company | The company | The selling shareholder |
| Charter capital | Increases | Increases | Unchanged |
| Who may buy | All shareholders pro rata, or assignees of their rights | Shareholders first under their pre-emptive right, then investors named in the placement plan | Whoever the seller chooses |
| Corporate approval | General Meeting sets the class and number of shares to be offered; Board sets price and timing | Same, plus a placement plan | None, except founders' shares in the first 3 years (Article 120(3)) or a charter restriction |
| Article 126 price floor | Does not apply (Article 126(2)) | Applies to shares sold to outsiders, subject to exceptions | Does not apply; price is negotiated |
| Filings with the business registration office | Charter capital change | Charter capital change, plus foreign shareholder notification | Only a notification in some cases, such as a change of foreign shareholder or beneficial owner |
| Tax on the deal itself | None | None | Seller pays (0.1% for individuals; corporate income tax for companies) |
Many deals combine the two: the investor buys out a departing shareholder under a share purchase agreement and subscribes for new shares at the same time. The steps for the purchase leg are in foreign investor buying shares in Vietnam.
Two points that guides in circulation still get wrong. First, the "private placement notification" that a JSC once filed with the business registration office came from Article 123 of the Law on Enterprises 2014; the 2020 law dropped it and Decree 168/2025/ND-CP has no equivalent. Second, the one-year and three-year lock-ups on privately placed shares come from the Law on Securities and apply to public companies, not to a non-public JSC.
When can a non-public JSC make a private placement of shares in Vietnam?#
Article 125(1) sets two conditions: no offer through the mass media, and either fewer than 100 investors (professional securities investors are not counted) or professional securities investors only.
The Law on Enterprises does not define "professional securities investor". Our reading is that Article 11(1) of the Law on Securities applies: financial institutions, companies with paid-up charter capital above VND 100 billion, holders of a securities practising certificate, and individuals with a listed portfolio of at least VND 2 billion or taxable income of at least VND 1 billion in the latest year. Since 1 January 2025, Law 56/2024/QH15 has added point (e): a foreign individual or a foreign-incorporated organisation carrying out investment business in Vietnam. In our reading, a foreign investor therefore does not count towards the 100 cap. The text does not say whether existing shareholders exercising their pre-emptive right count towards the 100; a company with a wide shareholder base should count them.
The offering must also stay within the number of shares the General Meeting has authorised for offering (Article 112(3); Article 138(2)(b)). Because Article 123(1) defines an offering as an increase in the number of shares authorised for offering, in practice almost every private placement of shares in Vietnam needs a General Meeting resolution. The Board can sell on its own only shares already authorised by an earlier resolution and not yet sold (Article 153(2)(c)).
Pre-emptive rights in Vietnam: why existing shareholders come first#
Every ordinary shareholder may buy new shares in proportion to its holding (Article 115(1)(c)). In a private placement this right is exercised under Article 124(2), except in a merger or consolidation (Article 125(2)(b)):
- The company sends each shareholder a written notice, to the address in the shareholder register, at least 15 days before the subscription deadline, with the number of shares the shareholder may buy, the price and the deadline, attached to a subscription form.
- A shareholder that does not return the form on time is treated as having declined.
- A shareholder may assign its pre-emptive right to someone else.
- Shares not taken up may be sold to others under the placement plan, on terms no more favourable than those offered to shareholders, unless the General Meeting approves otherwise (Article 125(2)(c)).
Can the General Meeting waive pre-emptive rights by majority vote? Placement plans often say "the General Meeting resolves that existing shareholders will not exercise their pre-emptive rights". In our reading that is not enough. The right belongs to each shareholder; Article 125(2)(c) only lets the General Meeting approve different terms for the shares left over. A shareholder that does not want to subscribe either lets the deadline pass or signs a written waiver. The law does not mention waivers, but a signed waiver is a clear act of the right-holder and shortens the timetable. Any shareholder that has not signed must still receive the notice on time.
For the investor this is the main closing risk. A shareholder (or group) holding at least 5% of ordinary shares, or a lower threshold set by the charter, has 90 days to ask a court or arbitral tribunal to annul a General Meeting resolution that breaches the law or the charter (Article 151; Article 115(2)). A resolution passed by 100% of voting shares stands even if the convening procedure was defective (Article 152(2)). Where every shareholder agrees, a unanimous resolution plus individual waivers is the safest structure, and it is worth making it a condition precedent in the share subscription agreement.
Whether holders of preference shares share in the pre-emptive right is not settled: Article 115 speaks of ordinary shareholders, while Article 124(1) says "all shareholders in proportion to their current holdings". Check the charter.
Steps and timeline for a private placement of shares in Vietnam#
The timetable below uses the statutory minimums where the charter is silent, with one new foreign investor. "Day N" is the date of the General Meeting resolution.
| Step | What happens | Timing | Basis |
|---|---|---|---|
| 1 | Due diligence; term sheet or framework agreement between investor and company; check of authorised shares, price floor and market access | Before the meeting is called | Articles 112, 126; Article 76(3) of Decree 96/2026 |
| 2 | Board proposes the offering, approves meeting papers, fixes the record list | List made no more than 10 days before invitations go out | Article 153(2)(b), (m); Article 141(1) |
| 3 | Invitations with the draft resolution and placement plan | At least 21 days before the meeting | Article 143(1) and (3) |
| 4 | General Meeting resolution; circulated to shareholders | Day N; within 15 days | Article 148 |
| 5 | Pre-emptive rights notice and subscription forms | At least 15 days before the subscription deadline | Article 124(2) |
| 6 | Company files the foreign investor's capital contribution registration with the investment registration authority, if required (in parallel with step 5) | 10 working days from a complete file | Article 76(3) and (4) of Decree 96/2026 |
| 7 | Board allocates the remaining shares; subscription agreement signed; price paid; investor entered in the shareholder register | Payment deadline set by the plan | Article 125(2); Article 124(4) |
| 8 | Charter capital registration, with the foreign shareholder notice and beneficial owner update | Within 10 days after the offering closes; 3 working days to process | Article 123(4); Articles 44, 51, 52 of Decree 168/2025 |
On these minimums, a private placement of shares in Vietnam takes roughly 7 to 9 weeks from the invitations to the new enterprise registration certificate; steps 1 and 6 are where deals slip. If the charter allows written resolutions on the class and number of shares and on charter amendments (by default these require a meeting, Article 147(2)), ballots need only go out 10 days before the return date (Article 149(2)), and the resolution passes with more than 50% of all voting shares (Article 148(4)).
The law does not define the "date the offering is completed" from which the 10 days run. Our reading: the date the last share in the round is fully paid and registered, or the closing date in the plan if the round is undersubscribed. Write that date into the plan.
The General Meeting resolution and the placement plan#
For a private placement of shares in Vietnam, Article 125(2)(a) says only that "the company decides the private placement plan"; it lists no contents and names no approving body. Because the plan is tied to the shares authorised for offering, the safe course is to put the plan in the General Meeting resolution and delegate execution to the Board. The list for public companies in Article 43(2)(a) of Decree 155/2020/ND-CP (as amended by Decree 245/2025/ND-CP) is a useful template: purpose and use of proceeds, number and class of shares, price or pricing principle, investor criteria and allocation. Add the pre-emptive rights mechanics, the payment deadline and what happens on default (the 90-day rule in Article 113(1) covers only shares subscribed at incorporation), the investor's foreign ownership before and after, and a delegation to the Board to register each tranche if the offering is split (Article 44(3) of Decree 168/2025).
Voting thresholds at a meeting, unless the charter says otherwise:
| Matter | Approval needed | Basis |
|---|---|---|
| Class of shares and total number of each class | 65% or more of votes of shareholders present and voting | Article 148(1)(a) |
| Charter amendment on capital; placement plan; different terms for outsiders; discount under Article 126(4) | More than 50% of votes of shareholders present and voting | Article 148(2) |
| Changes adverse to preference shareholders | 75% or more of the preference shares of that class | Article 148(6) |
The public company rule that interested shareholders may not vote on a placement (Decree 155/2020 as amended) does not apply to a non-public JSC. If the subscriber is already a shareholder holding over 10% of ordinary shares, a director or a related person of either, the text does not say whether the issue counts as a related-party transaction requiring approval under Article 167. The cautious course is to approve it under Article 167 with the interested shareholder abstaining; see related-party transactions in Vietnam.
Pricing a private placement of shares in Vietnam: the Article 126 floor#
The Board decides the timing, method and price of the sale (Article 126; Article 153(2)(d)). The price may not be below the market price at the time of sale or the most recent book value of the shares, except for shares sold for the first time to persons who are not founding shareholders, shares sold to all shareholders pro rata, shares sold to brokers or underwriters, and other cases and discounts set by the charter or a General Meeting resolution (Article 126(1) to (4)). For unlisted shares, market price means the price of the immediately preceding transaction, the price agreed between seller and buyer, or a valuer's price (Article 4(14)(b), as amended by Law 76/2025/QH15).
Worked example (hypothetical). JSC A has charter capital of VND 20 billion: 2,000,000 shares of VND 10,000 par, held 50% by X, 30% by Y and 20% by Z. Equity on the latest financial statements is VND 28 billion, so book value is VND 14,000 per share (our reading of "book value": equity divided by shares outstanding). The General Meeting approves a private placement of 500,000 shares at VND 20,000. X and Y sign waivers; Z takes its 100,000. The Board sells the remaining 400,000 to foreign investor F at VND 20,000 on payment terms no easier than those offered to Z. After closing, charter capital is VND 25 billion: X 40%, Y 24%, Z 20%, F 16%. The company receives VND 10 billion, of which VND 5 billion is share premium that does not count as charter capital (Article 112(1)).
If F negotiates a price below book value, the resolution should expressly approve the discount as an "other case" under Article 126(4). We would not rely on the "first sale to non-founders" exception, which the law does not explain.
Issuing new shares to a foreign investor: investment registration#
A foreign investor buying privately placed shares must complete the share purchase procedure under the investment law (Article 125(3)). Subscribing for newly issued shares is a form of capital contribution (Article 74(1)(a) of Decree 96/2026/ND-CP), so:
- Conditions. The investor must meet market access conditions, national defence and security requirements and land rules (Article 21(2) of the Law on Investment; Article 75(4) of Decree 96/2026). Companies running projects in industrial parks, export processing zones, high-tech parks and economic zones are carved out of the defence and land condition (Article 75(4)(b)).
- Prior registration is required if the subscription (a) increases foreign ownership in a company in a sector with market access conditions for foreign investors; (b) takes foreign ownership from 50% or less to above 50%, or increases it when it is already above 50%; or (c) is in a company holding land use rights certificates on an island, in a border or coastal commune or ward, or in another area affecting national defence and security (Article 21(3)). Outside these cases registration is optional (Article 76(2)).
- The file is lodged by the company with the investment registration authority where it has its head office. It includes a registration form showing ownership before and after and the expected transaction value, legal documents of the investor and the company, and a written agreement in principle between the investor and the company (Article 76(3)). Sign a framework agreement at the term sheet stage so the filing can go in as soon as the General Meeting has voted.
- Timing. The authority answers within 10 working days for cases (a) and (b); case (c) adds consultation with the provincial military command and police (Article 76(4) and (5)).
In the example, F reaches 16%, so case (b) does not apply; but if A operates in a restricted sector, F's subscription raises foreign ownership from 0% to 16% and falls under case (a).
When does F become a shareholder? Article 76(6) of Decree 96/2026 says a foreign investor that had to register acquires shareholder rights when the change of shareholder is completed at the business registration office; Article 124(4) of the Law on Enterprises says on full payment and entry in the register. Fix one date in the share subscription agreement for dividends and voting. If foreign ownership goes above 50%, the company itself must follow the foreign investor rules for its own investments (Article 20(1) of the Law on Investment; see what is an FDI company).
Paying the subscription price: which bank account?#
Any payment by a foreign investor for shares must go through an account under foreign exchange rules, unless paid in assets or other non-cash form (Article 35(5) of the Law on Enterprises). Which account depends on the company after closing:
- Foreign-owned above 50%, or set up by a foreign investor. The company receives capital through its investment capital account (DICA) (Article 6(1) and Article 4(4) of Circular 38/2026/TT-NHNN). The DICA can receive both the contribution and the share premium from a share issue (Article 8(1)(a) and (i)). If the placement takes foreign ownership above 50%, the company must open one (Article 7(6)).
- Foreign-owned 50% or less, in a company not set up by a foreign investor, as in the example: the foreign investor transacts through its own indirect investment account (last paragraph of Article 7(5)(b)).
Article 4(5) lets money reach the DICA before the company registers its capital increase, but says nothing about the notice confirming that the investor meets the conditions, which Article 4(1) lists among the contribution documents. Where registration is required, the safe order is approval first, money second. The account mechanics are in direct investment capital account in Vietnam.
Are privately placed shares locked up?#
For a non-public JSC, no statutory lock-up follows a private placement of shares in Vietnam. Shares are freely transferable except founders' ordinary shares in the first three years and restrictions in the charter (Article 127(1)); shares a founder buys after incorporation are outside the three-year restriction (Article 120(4)(a)). The three-year (strategic investor) and one-year (professional securities investor) lock-ups are in Article 31(1)(c) of the Law on Securities and apply to public companies, securities companies and fund managers.
If the parties want a lock-up, or the investor wants tag-along, drag-along and anti-dilution protection, there are two layers. To bind the company and third parties, put the restriction in the charter and state it on the share certificate (Article 127(1)), which may be a paper certificate, a book entry or electronic data (Article 121(1)). Between the parties, use the share subscription agreement or a shareholders' agreement; without the charter and certificate, the company has little basis to refuse to register a transferee.
Filings after a private placement of shares in Vietnam#
Charter capital increase registration (Article 44(1) of Decree 168/2025/ND-CP): the application, the General Meeting resolution on the capital change, proof that the new shares have been paid (a copy of the shareholder register or a bank confirmation of the transfer into the company's account, Article 3(12)), and the investment authority's approval where registration was required. For tranches, use Article 44(3). Processing takes 3 working days (Article 44(5)). Foreign-language documents need a Vietnamese translation with a certified translator's signature from 23 July 2026 (Article 10(2) of Decree 168/2025; Article 19(1) of Decree 296/2026/ND-CP).
Foreign shareholder notification (Article 31(1) of the Law on Enterprises as amended by Law 76/2025/QH15; Article 51 of Decree 168/2025): point (c) of Article 51(1), as amended by Article 10 of Decree 296/2026/ND-CP, expressly lists "proof of capital contribution where a foreign investor shareholder buys privately placed shares". The law gives 10 days (Article 31(3)) and, separately, 3 working days (Article 176(3)); file on the shorter timetable and combine it with the capital filing (Article 4(6) of Decree 168/2025). A beneficial owner change is notified within 10 days (Article 52(1)); see what is a beneficial owner. From 11 September 2026, a public document carrying an Apostille from a Convention state that applies the Convention with Vietnam is exempt from consular legalisation (Articles 25 and 34 of Decree 293/2026/ND-CP).
Late filing of the capital change: a warning for 1 to 10 days late; VND 10 to 20 million for 11 to 30 days; VND 30 to 40 million for 31 to 90 days; VND 50 to 60 million for 91 days or more; VND 30 to 70 million and an order to file if never filed (Article 44 of Decree 122/2021/ND-CP as amended by Decree 288/2026/ND-CP, in force from 21 July 2026). Failing to record a shareholder fully in the register carries VND 40 to 70 million (Article 52(2)(dd)). These are fines for organisations; an individual pays half (Article 4(2) of Decree 122/2021).
In our reading, issuing new shares to a foreign investor is not itself a taxable event for the investor or the company: the Law on Corporate Income Tax 67/2025/QH15 does not list subscription money among taxable income, and both par value and share premium go to equity. Tax arises later, on dividends and on exit; see capital transfer tax in Vietnam.
Common mistakes in a private placement#
- Relying on a majority resolution to "disapply" pre-emptive rights in Vietnam instead of collecting individual waivers or letting the 15-day period run.
- Selling leftover shares to the investor on better terms (lower price, deferred payment) without separate General Meeting approval.
- Pricing below book value with no charter provision or resolution approving the discount; directors who voted for it may be jointly liable (Article 153(4)).
- Wiring the subscription price before the investment authority has approved, or into an ordinary current account when a DICA is required.
- Registering the planned increase rather than the amount actually paid (Article 44(1)(d) of Decree 168/2025).
- Missing the 10-day deadline while waiting for translations and Apostilles; prepare the investor's documents before the payment date.
- Crossing the public company threshold by accident (below).
Private placements by public companies#
A public company follows Article 31(1) of the Law on Securities as amended by Law 56/2024/QH15: only strategic investors and professional securities investors may subscribe; shares are locked up for at least three years and one year respectively; placements must be at least six months apart; and foreign ownership limits apply. The State Securities Commission can suspend or cancel an offering (Articles 31a and 31b), and interested persons may not vote on it (Decree 245/2025/ND-CP).
A placement can turn a private JSC into a public one. Under Article 32(1)(a) of the Law on Securities, a JSC is public once it has paid-up charter capital of VND 30 billion or more, owner's equity of VND 30 billion or more (this element in force from 1 January 2026), and at least 10% of voting shares held by at least 100 investors who are not major shareholders. It must then register with the State Securities Commission within 90 days (Article 32(2)).
LexData acts for foreign investors and Vietnamese companies on every stage of a private placement of shares in Vietnam, from the placement plan and waivers to investment registration and the charter capital filing, through its capital contribution and share purchase service. Where the investor wants the target checked first, see legal due diligence.
