How to reduce charter capital in Vietnam, and when the law lets you

A company can reduce charter capital in Vietnam only in the cases the Law on Enterprises lists: returning part of the capital to members or shareholders in proportion to their holdings once the company has operated for two years and can still pay its debts afterwards; the company buying back a member's stake or its own shares; capital that was never paid in full and on time; and, for a joint-stock company (JSC), redeeming redeemable preference shares (Articles 68(3), 87(3) and 112(5)). With a permitted ground in place, the company passes the resolution, makes the refund or buy-back, then files the change of charter capital with the provincial business registration office, including a commitment that it will still pay its debts and other property obligations after the reduction (Article 44(1) and (4) of Decree 168/2025/ND-CP). The office has 3 working days to process a valid file (Article 44(5)).

The filing deadline depends on the ground: 10 days once a limited liability company (LLC) with two or more members has finished paying out, or once a JSC has completed payment for a share buy-back; 30 days when a member or shareholder failed to pay in within the first 90 days. This guide reflects the law as of 14 October 2026 and covers LLCs and unlisted JSCs; public companies, which also follow securities law, are outside it. For a foreign-invested company there are three more questions: whether the Investment Registration Certificate (IRC) changes, what happens to the investment capital account, and how the money leaves Vietnam. For the reverse direction see our guide to increasing charter capital, and for the concepts the handbook entry on charter capital versus investment capital.

When can a company reduce charter capital in Vietnam?#

The handbook lists the grounds by company type. Four points decide whether a reduction plan works.

A refund must be pro rata. Article 68(3)(a) and Article 112(5)(a) allow a refund only in proportion to each member's contribution or each shareholder's holding. A capital reduction is therefore not a way for one member to cash out alone. That member can sell its stake (see transfer of capital contribution) or ask the company to buy it back where Article 51 (LLC) or Article 132 (JSC) gives that right. Shareholders may not withdraw capital paid for ordinary shares in any form unless the company or someone else buys the shares (Article 119(2)).

The two-year test now differs by company type. Law 76/2025/QH15 rewrote Article 112(5)(a): a JSC must have "operated for two years or more from the date of enterprise registration, not counting periods of registered business suspension" (Article 1(17), in force 1 July 2025). Articles 68 and 87 were not amended and still require an LLC to have operated "continuously" for two years. We found no text or official guidance on whether a suspension breaks the "continuous" period for an LLC. Because Law 76/2025 amended only Article 112, the JSC method (suspension periods simply excluded) cannot safely be assumed for LLCs; on a strict reading, a suspension breaks continuity and the two years run again from the date business resumes. An LLC that has suspended business should ask the registration office before making a refund.

Solvency is tested after payment. The wording is that the company can pay its debts and other property obligations "after the refund". The commitment in the file does not replace that test: members who receive a refund in breach must repay it and are jointly liable for the company's debts up to the amount not repaid (Article 70).

There is no "write off losses" ground. The list has no case for reducing charter capital merely to absorb accumulated losses without paying anyone. On our reading, a loss-making company may still refund capital if it meets the two-year test and remains solvent afterwards, but it cannot register a reduction just to tidy its balance sheet.

Who approves a capital reduction, and by what majority?#

In an LLC with two or more members, the Members' Council decides increases and reductions of charter capital (Article 55(2)(b)). That decision alone needs members holding at least 65% of the capital of members present (Article 59(3)(a)). Charter capital is stated in the charter, so a reduction also amends the charter, which (unless the charter says otherwise) must be voted at a meeting (Article 59(2)(a)) with at least 75% (Article 59(3)(b)). Applying 75% to the combined decision is our cautious reading, as for an increase. Meeting minutes are a required filing document (Article 68(5); Article 44(1)(c) of Decree 168).

In a single-member LLC, the owner decides. Article 76(1)(h) only mentions deciding an increase, but the owner may amend the charter (Article 76(1)(a) and (2)), and the filing list refers to the owner's decision "on changing charter capital" (Article 44(1)(b) of Decree 168).

In a JSC, it depends on the ground:

• Refund to shareholders: the General Meeting of Shareholders decides (Article 112(5)(a)). A charter amendment needs more than 50% of the total votes of shareholders attending and voting at the meeting (Article 148(2), as amended by Article 7(5) of Law 03/2022/QH15); a resolution on "classes of shares and the total number of shares of each class" needs 65% (Article 148(1)(a)). Article 148 does not name capital refunds, and we found no official guidance. However, a refund is usually made by cancelling shares, which changes the total number of shares the charter must state (Article 24(2)(c)); that is exactly the matter of "classes of shares and the total number of shares of each class" in Article 148(1)(a). Pass a refund resolution with at least 65%, or any higher threshold the charter sets. These matters must be voted at a meeting unless the charter allows written consent (Article 147(2)(a) and (c)).
• Buy-back decided by the company: no more than 30% of ordinary shares sold in total; the Board of Directors may buy back up to 10% of the shares of each class sold within 12 months, and anything above that goes to the General Meeting (opening words and clause 1 of Article 133; Article 138(2)(g)).
• Buy-back at a shareholder's request: an obligation where the shareholder voted against a resolution on reorganising the company or changing shareholders' rights and obligations in the charter (Article 132(1)).
• Redeemable preference shares: redeemed on the request or conditions stated on the share certificate and in the charter (Article 118(1); Article 112(5)(d), added by Law 76/2025/QH15).

How an LLC can reduce charter capital in Vietnam: pro-rata refund, buy-back or unpaid capital#

Pro-rata refund. An LLC with two or more members checks the two-year test, prepares financial statements, holds the Members' Council meeting, pays each member pro rata, and within 10 days after the reduction has been paid out notifies the registration office (Article 68(4)). The Law speaks of a "notice" and of the office "updating" the information within 3 working days (Article 68(6)); Decree 168 treats it as a registration of changed details with a new Enterprise Registration Certificate (ERC) (Article 44). The notice states the amount reduced, the time and form of the reduction, and is signed by the legal representative (Article 68(4)(b) to (d)). For a single-member LLC refunding its owner (Article 87(3)(a)), Article 87 sets no period of its own, so the general rule of 10 days from the change applies (Article 30(2)); on when "the change" occurs, see the JSC section below.

Buy-back of a stake. A member who voted against a resolution amending charter provisions on members' or the Council's rights, on reorganisation, or on another matter the charter specifies, may ask in writing within 15 days for the company to buy its stake. The company must buy within 15 days of the request, at market price or a price set by the charter's formula unless they agree otherwise; it may pay only if it can still pay its debts afterwards, and if it cannot pay, the member may sell freely to anyone (Article 51). The company then reduces capital under Article 68(3)(b), again within 10 days and with the latest financial statements. The remaining members' percentages change, so the file includes the member list signed by members whose stakes changed (Article 44(2) of Decree 168; Form No. 12 also says the list on Form No. 6 is attached). If a member is bought out entirely and leaves, Article 45(7) of Decree 168 deals with exactly that case, a "change of members because the company buys back a member's stake under Article 51": the application, the member list signed by members whose stakes changed, and a copy or original of the buy-back contract. Put the buy-back in a written contract for that reason. Charter capital also falls, so the reduction documents under Article 44 (resolution, minutes, latest financial statements) are still needed; in our view both changes go in one filing.

Unpaid capital after 90 days. At the end of 90 days from the ERC (not counting time to transport or import contributed assets or transfer title), a member who paid nothing ceases to be a member by operation of law, a member who paid part has rights in proportion to what it paid, and the unpaid portion may be offered for sale by Members' Council resolution (Article 47(2) and (3)). The company must register charter capital and ownership ratios equal to what was paid within 30 days from the last day for payment (Article 47(4)); the 10-day rule in Article 68(4) expressly does not apply. The file for removing a non-paying member contains the application, the list of remaining members signed by those whose stakes changed, and the Members' Council resolution (Article 45(4) of Decree 168). In a single-member LLC, the owner registers the reduced capital within 30 days and is liable with all its assets for obligations and losses caused by failing to contribute in full and on time (Article 75(3) and (4)).

Unlike the JSC rule, Article 47 has no exception for unpaid capital resold within the period. If the Council offers the unpaid portion but finds no buyer within 30 days, our cautious approach is to register the reduction to the paid amount first, then register the new member when the sale closes under Article 45(1) of Decree 168, which expressly covers a sale of unpaid capital under Article 47(3)(c).

Illustration (assumed figures and dates). Company X, an LLC, receives its ERC on 5 June 2026 with charter capital of VND 2 billion: A commits VND 1.2 billion (60%), B VND 0.6 billion (30%) and C VND 0.2 billion (10%). The 90th day is 3 September 2026; A and B pay in full, C pays nothing and ceases to be a member. The company must register charter capital of VND 1.8 billion, A 66.67% and B 33.33%, by 3 October 2026. Filing on 20 October 2026 would be 17 days late, within the VND 10 to 20 million band of Article 44(2) of Decree 122/2021/ND-CP as amended. C remains liable, in proportion to its 10% commitment, for the company's financial obligations arising before the registration (Article 47(4)).

How a JSC can reduce charter capital in Vietnam: buy-back, refund or unpaid shares#

Share buy-back. At a shareholder's request, the shareholder writes within 10 days of the General Meeting resolution stating the number of shares, the intended price and the reason; the company must buy within 90 days of receiving the request, at market price or a price set under the charter formula; if they cannot agree on price, the parties may ask a valuation firm to value the shares, the company proposes at least three and the shareholder's choice is final (Article 132). For a buy-back the company decides, the price of ordinary shares may not exceed market price unless the company buys pro rata from every shareholder; in that case the decision is notified to all shareholders within 30 days and those willing to sell reply within 30 days of the notice (Article 133(2) and (3)).

Article 134 applies to both. The company may pay only if, immediately after paying for all the shares, it can still pay its debts (clause 1). Repurchased shares become unsold shares, and the company must register a reduction equal to their total par value within 10 days after completing payment (clause 2). Share certificates must be destroyed as soon as the shares are paid for (clause 3). A point often missed: if the total asset value in the accounts falls by more than 10% after payment, the company must notify all creditors within 15 days (clause 4). If payment breached clause 1, shareholders must repay, and if they cannot, all Board members are jointly liable up to the amount not recovered (Article 136).

Refund by General Meeting resolution (Article 112(5)(a)) and redemption of redeemable preference shares (Article 112(5)(d)) have no deadline of their own, so the 10 days from the change in Article 30(2) applies. The texts do not say whether "the change" is the resolution date or the payment date, and we found no official guidance. The deadlines the Law does spell out for the closest cases all run from completed payment (Article 68(4), Article 134(2)), so by analogy the date is when the refund has been paid; even so, the safe course is to schedule payment and filing close together.

Shares unpaid after 90 days. A subscriber who has not paid ceases to be a shareholder; unpaid shares become unsold shares that the Board may sell; and the company must register charter capital equal to the par value of shares fully paid within 30 days after the payment deadline, unless the unpaid shares have all been sold within that period (Article 113(3)). Where founding shareholders did not pay, the company also notifies the change in founding shareholder details within the same 30 days, filing a list that omits them (Article 50(2) and (3) of Decree 168). Board members and the legal representative are jointly liable for losses if this is not done (Article 113(4)).

Filing, deadlines and processing time#

The file goes to the business registration office of the province where the head office is located, and is received and processed on the national enterprise registration system (Article 31(1) of Decree 168). It contains:

1. The application for registration of changes to enterprise registration details: from 21 August 2026, the new Form No. 12 attached to Circular 121/2026/TT-BTC, which replaced the form of the same number under Circular 68/2025/TT-BTC (Article 1(1)(g)); files received earlier and not yet approved are processed under the old rules (Article 2).
2. The resolution or decision of the owner, the Members' Council or the General Meeting on changing charter capital. For a JSC buy-back within the Board's authority, Article 44(1)(b) mentions only a General Meeting resolution, and charter capital and the total number of shares are charter items (Article 24(2)(c)) that only the General Meeting may amend (Article 138(2)(dd)). We found no official guidance on whether the registry accepts a Board resolution instead. Because the filing is due 10 days after payment (Article 134(2)), the cautious course is a General Meeting resolution passed in advance that authorises the Board to register the reduction once payment is complete (mirroring Article 44(3) for increases in tranches), or asking the registry first.
3. Minutes of the Members' Council meeting, for an LLC with two or more members.
4. The commitment to pay all debts and other property obligations after the reduction (Article 44(4)). It is a line in Form No. 12, in the section on changing charter capital, to be completed "only when registering a reduction of charter capital"; it is not a separate document.
5. The financial statements closest to the date of the reduction decision, where an LLC with two or more members refunds capital or buys back a stake (Article 44(4); Article 68(5)). An audit is not required by the text.
6. The member list, where the stakes or percentages of members of a multi-member LLC change (Article 44(2)); documents on changed members or founding shareholders, if any, including the buy-back contract when a member leaves (Article 45(4) and (7) and Article 50(3) of Decree 168).

Proof of contribution under Article 44(1)(d) applies only to increases. Foreign-language documents need a Vietnamese translation with the translator's signature certified (Article 10(2) of Decree 168; Article 19(1) of Decree 296/2026/ND-CP). From 23 July 2026, where a filing is made under authorisation to change the legal representative, the owner, LLC members, founding shareholder information or foreign-investor shareholders of an unlisted JSC, the principal and the authorised agent must complete electronic authentication; without an electronic identity account, the file includes a copy of the principal's identity document (Article 12(5), amended by Article 2 of Decree 296). On the wording, a reduction that changes none of these is outside that list. The registry may not ask for copies of certificates it can retrieve from national databases (Article 4(7), added by Article 1(2) of Decree 296). The fee is paid on filing and is not refunded if registration is refused (Article 34). Within 3 working days the office issues a new ERC, and the old one ceases to be valid (Article 44(5); Article 33(3)).

Case	Filing deadline	Basis
LLC (two or more members): pro-rata refund or stake buy-back	10 days after the reduction has been paid out	Article 68(4)
LLC (two or more members): unpaid capital	30 days from the last day for payment	Article 47(4)
Single-member LLC: refund to owner	10 days from the change (our reading)	Article 30(2)
Single-member LLC: unpaid capital	30 days from the last day for payment	Article 75(3)
JSC: share buy-back	10 days after completing payment	Article 134(2)
JSC: unpaid shares	30 days after the payment deadline, unless all resold	Article 113(3)(d)
JSC: refund or redemption of preference shares	10 days from the change (our reading)	Article 30(2)

These are filing windows only; the whole capital reduction also takes the time to convene meetings, pay out and, for a foreign-invested company, amend the IRC. After the new ERC, update the charter, the register of members or shareholders and the capital contribution certificates. If the reduction changes the beneficial owners or their percentages, notify within 10 days of the change (Article 52(1) of Decree 168; see beneficial owners).

Fines and personal liability#

If you reduce charter capital in Vietnam on a permitted ground and file on time, no fine applies. Administrative fines come from four situations:

• Late filing or no filing. Article 44 of Decree 122/2021/ND-CP, as amended by Article 2 of Decree 288/2026/ND-CP (in force on signature, 21 July 2026): 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 plus an order to register for not registering at all (clauses 1 to 5 and 7).
• Leaving unpaid capital on the register. Article 16(5) of the Law on Enterprises, as amended by Law 76/2025/QH15, prohibits "falsely declaring charter capital by failing to contribute the registered charter capital in full without registering an adjustment". Article 47 of Decree 122 fines "falsely declaring charter capital with a value" in five bands, from VND 20 to 30 million (under VND 10 billion) to VND 80 to 100 million (VND 100 billion or more), with an order to register the capital actually paid (clauses 1 to 6); Decree 288/2026 did not amend it. The wording does not say whether the "value" is the whole registered capital or only the unpaid part, and we found no guidance or published penalty decision showing the calculation. The remedy (reducing to the amount actually paid) suggests the "false" part is the unpaid part, but that is still a reading.
• Inaccurate filings. Untruthful or inaccurate content in a change filing is fined VND 30 to 70 million (Article 43, amended by Article 1 of Decree 288). In our view, a solvency commitment the company knows it cannot meet risks falling here.
• Registers not updated. Failing to record contributors' or shareholders' details in full in the register is fined VND 40 to 70 million (Article 52(2)(dd), added by Article 5 of Decree 288).

The larger exposure is usually civil: members who receive an unlawful refund must repay and are jointly liable for debts (Article 70); a shareholder who withdraws capital unlawfully is jointly liable with related persons up to the value withdrawn (Article 119(2)); Board members are jointly liable when unlawful buy-back payments cannot be recovered (Article 136).

Reduce charter capital in Vietnam as a foreign-invested company: IRC, account and repatriation#

A foreign-invested company follows everything above and then answers three questions (see what an FDI company is).

Does the IRC need amending? The charter capital of a company set up by a foreign investor need not equal the project's investment capital (Article 72(5) of Decree 96/2026/ND-CP). The IRC records investment capital "comprising the investor's contributed capital and mobilised capital" and the contribution schedule (Article 37(6) and (8)(a)). If the reduction makes the investor's contribution or the schedule on the IRC inaccurate, a main content item has changed and the IRC must be amended (Article 33(2) of the Law on Investment); for a project outside the investment-policy approval track, the file follows Article 52(1) and the investment authority amends the IRC within 7 working days (Article 56(2) of Decree 96). If the project keeps the same total investment and only shifts its funding mix, the IRC may not change. The texts do not say whether the IRC or the ERC comes first; see the IRC amendment procedure.

Does foreign ownership cross 50%? When the capital reduction comes from the company buying out a Vietnamese partner, the foreign investor's percentage rises without the foreign investor buying anything. Article 21(3) of the Law on Investment and Article 76 of Decree 96 tie the registration procedure to a foreign investor that "contributes capital, buys shares or buys a stake", carried out "before the change of members or shareholders". In a buy-back, the foreign investor buys nothing and no new member joins, so on the wording this passive increase is not caught; we found no Ministry of Finance or investment authority guidance confirming that. If the company is in a sector with conditional market access, foreign ownership after the buy-back must still stay within the cap (Article 8(3)(a) of the Law on Investment), so in that case ask the investment authority first. The consequences outside that procedure are clearer. Once foreign investors hold more than 50% of charter capital, the company must meet the conditions and procedures for foreign investors when it invests further (Article 20(1) of the Law on Investment) and must open an investment capital account (Article 7(6) of Circular 38/2026/TT-NHNN). Conversely, a company under Article 6(1)(b) whose foreign ownership falls to 50% or less after a change of charter capital must close its investment capital account and move to an indirect investment account, and a company under Article 6(1)(a) with no foreign investor left must close it too, unless the account is still being used for foreign loans or other lawful payment obligations (Article 7(5)). An unlisted JSC that buys back a foreign shareholder's shares must also notify the change of foreign-investor shareholders within 10 days of the change (Article 31(3) of the Law on Enterprises; Article 51(1) of Decree 168).

How does the money leave Vietnam? Once its financial obligations to the State are met, a foreign investor may transfer its investment capital abroad (Article 11(1) of the Law on Investment). Money returned on a capital reduction must go through the investment capital account unless that account has already been closed under Article 7(5) (Article 11(1) of Circular 38), paid out in foreign currency (Article 8(2)(e)) or by buying foreign currency from the dong account (Article 9(2)(dd)); do not remit it directly from the company's ordinary current account. The bank must check documents against the actual transaction (Article 14(3)), and the company must give the bank its amended certificates (Article 15(3)); in our view, have the new ERC in hand before asking the bank to repatriate capital. Returning capital is not the same as repatriating profit, which has its own procedure (profit repatriation); for account rules see the direct investment capital account.

Is capital returned to an individual taxed?#

This section covers resident individuals under Decree 253/2026/ND-CP (in force 1 July 2026). Investment income includes "the increase in value of contributed capital received on dissolution, conversion, division, separation, merger or consolidation of an enterprise, or on withdrawal of capital" (Article 9(3)(a)), taxed at 5% (Article 52(1)). On a pro-rata refund, receiving back no more than what was contributed involves no "increase", so no tax arises; anything above it is taxed at 5%. Tax authorities have answered this way when applying identical wording in Circular 111/2013/TT-BTC: the Hanoi Tax Department treated the part of a refund above the original contribution as investment income (Official Letter 56317/CT-TTHT, 18 August 2017), and the Lao Cai provincial tax office told an LLC refunding 45% of contributed capital that only the increase is taxable income (published on the Government Portal, 20 November 2025). Decree 253 keeps the same definition, so that treatment still holds.

Previously deferred tax also falls due on withdrawal in two groups: profit credited to capital that was not taxed when credited (Article 52(5)); and capital contributed in the form of a stake, securities or real estate on which no tax was paid at contribution (Article 53(6), Article 54(4), Article 57(5)(d)), where the receiving company files and pays on the individual's behalf (Article 56(3); Article 57(5)(d)). When a JSC buys back an individual's shares, the shareholder is transferring shares to the company. Decree 253 classifies "transfers of shares by individuals in joint-stock companies" as securities transfers, listed or not (Article 10(2)), taxed at 0.1% of the price per transaction (Article 54(1)). The General Department of Taxation treated a company's buy-back of employees' shares as a securities transfer taxed at 0.1% (Official Letter 2269/TCT-TNCN, 16 July 2013); at the time that applied only to public companies, while shares in non-public companies were taxed as a capital transfer at 20% (Official Letter 4123/TCT-TNCN, 16 November 2011). Article 10(2) now covers shares in every JSC, so 0.1% applies to unlisted companies too.

For an LLC buying back an individual member's stake, we found no text or official letter on the point. Decree 253 distinguishes "withdrawal" from "transfer" (Article 53(6), Article 54(4)) but does not say which one a company buy-back is. As a withdrawal, the tax is 5% of the amount received above the contributed value; as a transfer of a stake (Article 10(1)), 20% of the price less the purchase price and reasonable costs, or 2% of the price if the purchase price cannot be established (Article 53(1)). Both tax only a gain: if the buy-back price does not exceed the capital contributed and the contribution is documented, neither treatment produces tax. Where there is a gain, ask the tax office before paying. Corporate members and non-resident investors follow other rules not covered here; see capital transfer tax.

Checklist to reduce charter capital in Vietnam#

1. Identify the ground: pro-rata refund, buy-back, unpaid capital or redeemable preference shares; if only one investor wants out, consider a transfer first.
2. For a refund, count two years (a JSC excludes suspension periods; an LLC that has suspended should ask the registry) and model cash flow to show solvency after payment.
3. Check loan agreements, guarantees and the charter for restrictions on reductions or different voting thresholds.
4. Approve at the right level: Members' Council (75% if the charter is amended), owner, General Meeting (65% advised for a refund), or Board within its 10% limit (with a General Meeting resolution on the change of charter capital if the registry asks).
5. Pay out the refund or buy-back price (a foreign-invested company pays through the investment capital account), then diarise the 10- or 30-day deadline as soon as payment completes or the 90-day contribution period ends.
6. File Form No. 12 (which carries the solvency commitment), the resolution, minutes, latest financial statements and member list (multi-member LLC), and member-change documents if any.
7. JSC buy-back: destroy the certificates and check the 10% asset-drop test for the 15-day creditor notice.
8. Foreign-invested company: check the IRC, the 50% threshold and the investment capital account before you repatriate capital.
9. After the new ERC: update the charter, registers, capital contribution certificates and beneficial ownership information.

Our service on amending the IRC and the ERC covers choosing the right ground for the reduction, drafting the resolutions and filing, deciding whether the IRC must also change, and following the file to a new certificate.