A share purchase agreement in Vietnam is a contract under which a shareholder sells shares in a Vietnamese joint stock company to a buyer for a price. Vietnamese law asks for very little: the transfer is made by contract, the transfer documents are signed by both parties or their authorised representatives, and the buyer becomes a shareholder only when its details are entered in the company's register of shareholders (Article 127(2) and (6) of the Law on Enterprises). No notarisation is required. Almost everything an international buyer expects in an SPA (price mechanics, conditions precedent, warranties, indemnities, escrow) is a matter of contract under the Civil Code, and several of those concepts have no direct equivalent in Vietnamese law.
This article reflects the law in force as of 14 October 2026 and covers unlisted joint stock companies that are not public companies. It is about the contract. The registration steps, transfer restrictions, the founders' three-year rule and the register of shareholders are covered in share transfer in a joint stock company, and the investment registration a foreign buyer may need is in foreign investor buying shares in Vietnam.
What governs a share purchase agreement in Vietnam?#
Three layers apply at once. The Law on Enterprises decides whether the shares can be sold, who must approve and when the buyer becomes a shareholder; the parties cannot contract out of it. The Civil Code supplies the contract framework: validity, conditional transactions, damages, penalties, termination and limitation periods; under it, an SPA is a contract for the sale of property (Article 430). The Law on Commerce may govern remedies if the deal counts as a commercial activity, which matters for penalty clauses (see below).
Form. Form is a condition of validity only where a law says so (Articles 117(2) and 119 of the Civil Code), and notarisation is mandatory only for transactions that a law, or a Government decree under a law, designates (Article 3(1) of the Law on Notarisation 46/2024/QH15). We have found no such rule for a share purchase agreement in Vietnam; the Ministry of Justice publishes the list of transactions requiring notarisation (Article 3(2)), so check it before signing. Electronic contracts count as written (Article 119(1)). What deserves more attention than notarisation:
- Signing authority of a corporate seller. A joint stock company selling assets worth 35% or more of its total assets in its latest financial statements needs its own general meeting of shareholders, unless its charter sets another threshold (Article 138(2)(d) of the Law on Enterprises); for a multi-member limited liability company the threshold is 50%, or a lower one set by the charter, and the members' council decides (Article 55(2)(d)). Make the seller's resolution a condition precedent.
- Language. The SPA can be in English only, but documents filed with the business registration office need a Vietnamese translation, which since 23 July 2026 must have the translator's signature certified (Article 10(2) of Decree 168/2025/ND-CP, as amended by Article 19(1) of Decree 296/2026/ND-CP). Where a document is bilingual, the registration office works from the Vietnamese text (Article 10(3)). An "English prevails" clause binds only the parties.
Long-form and short-form. The notification of a change in foreign shareholders must attach the share transfer contract or documents proving completion of the transfer (Article 51(1)(c) of Decree 168, as amended by Article 10 of Decree 296/2026/ND-CP). Parties often sign a short transfer instrument for the register and the filing alongside the long-form SPA. Keep the two consistent on shares and price: for an individual seller the taxable price is the contract price, the actual transfer price or the book value (Article 54(2)(b) of Decree 253/2026/ND-CP), and for a corporate seller it is the total actual value received under the contract (Article 13(2)(a) of Decree 320/2025/ND-CP). A short form showing a lower price than the SPA invites questions from the tax authority. Subscribing for newly issued shares is a different transaction (Article 125 of the Law on Enterprises); see private placement of shares in Vietnam.
Before signing: deposits, confidentiality and the "principle agreement"#
Deposits. If the buyer pays a "deposit" under a share purchase agreement in Vietnam and the Vietnamese text calls it a deposit in the Civil Code sense, Article 328 applies by default: a buyer who refuses to conclude or perform the contract forfeits it, and a seller who refuses must return it plus an equal amount, unless agreed otherwise. If you mean a refundable advance on the price, say so expressly.
Confidentiality. A party that receives confidential information while negotiating must keep it confidential and not use it for its own purposes, and a party holding information that affects the other's decision to contract must disclose it (Article 387). These duties exist without an NDA, but an NDA still sets scope and remedies; see what is an NDA in Vietnam.
The document the investment regulator asks for. Where a foreign buyer must register the share purchase before the change of shareholders (the three cases in Article 21(3) of the Law on Investment), the file must include a "written agreement in principle" between the foreign investor and the company or selling shareholder, and the registration form states the expected transaction value (Article 76(3)(a) and (c) of Decree 96/2026/ND-CP). The decree does not define that document, and we found no published guidance on whether the investment registration office accepts a conditional SPA in its place. You can file a short framework agreement and sign the SPA after the registration office's notice, or sign the SPA with that notice as a condition precedent and file the SPA. The second route puts all commercial terms in a government file; the first requires the two documents to match. Ask the registration office before choosing; see framework agreement in Vietnam. A merger control filing can be made on a draft contract or memorandum (Article 34(1)(b) of the Competition Law), so signing is not a prerequisite for filing.
When does a share purchase agreement in Vietnam take effect?#
Most deals separate signing from completion. The Civil Code allows two structures:
- A condition to effectiveness. If the parties agree a condition for a transaction to arise, it arises when the condition occurs (Article 120(1)). Until then the contract is not in force, so pre-completion covenants (exclusivity, ordinary course, no dividends) are hard to rest on the SPA itself.
- Effective on signing, with performance conditional. A contract takes effect when concluded unless agreed otherwise (Article 401(1)), that is, when the last party signs (Article 400(4)); a conditional contract is one whose performance depends on an event (Article 402(6)). This is the usual structure.
The choice has a tax consequence that template SPAs miss. The Law on Personal Income Tax 109/2025/QH15 treats a securities transfer as a kind of capital transfer (Article 3(4)(b)) and fixes the time taxable income arises for a resident individual as "the time the transaction is completed in accordance with law" (Article 13(3)). Decree 253 makes that concrete for shares that are neither listed nor centrally registered: the time "the securities transfer contract takes effect" (Article 54(3)(c)). For a foreign company selling capital, taxable revenue arises when "the initial capital transfer contract takes effect in accordance with regulations" (Article 5(2)(a) of Circular 20/2026/TT-BTC). Per-transaction tax returns are due by the 10th day after the obligation arises (Article 10(1) of Decree 252/2026/ND-CP).
Read literally, the decree and the circular let a share purchase agreement in Vietnam that is effective on signing start the filing clock at signing, before any money moves and before anyone knows whether the deal will close. We found no tax authority ruling on contracts with conditions precedent. One way to reduce the risk is to make the transfer of the shares itself take effect only at completion, for example through a short-form transfer instrument signed on that day, while the SPA carries the interim covenants. The tax authority has not confirmed that this works. For a foreign corporate seller, the word "initial" in Circular 20 suggests the tax office may look to the first contract signed, so ask the tax office managing the target before signing.
Typical conditions precedent and where they come from#
| Condition precedent | Legal source | Drafting note |
|---|---|---|
| General meeting approval of a founder selling to a non-founder within three years | Article 120(3), Law on Enterprises | The selling founder cannot vote |
| Release of charter transfer restrictions | Article 127(1), Law on Enterprises | Restrictions bind only if stated on the share certificate |
| Corporate seller's own resolution | Articles 138(2)(d) and 55(2)(d), Law on Enterprises | Depends on value against the seller's total assets |
| Investment registration office's notice for a foreign buyer | Article 21(3), Law on Investment; Article 76(4) and (5), Decree 96/2026 | 10 working days from a valid file; extra consultation where the target holds land in defence or security areas |
| Merger control clearance | Article 33(1), Competition Law; Article 13(1), Decree 35/2020/ND-CP, thresholds temporarily raised to 28 February 2027 by Resolution 66.18/2026/NQ-CP | See economic concentration in Vietnam |
| Sector regulator approval (banking, insurance, securities) | Sector laws | Not covered here |
| Lender and change-of-control consents | The target's contracts | Found through due diligence |
| No material adverse change | Contract only | Define it with numbers where possible |
If a condition fails because one party deliberately obstructs it, the condition is deemed satisfied; if a party deliberately brings it about, it is deemed not satisfied (Article 120(2)). Still allocate who files what and by when: a specific covenant is easier to prove than deliberate obstruction.
Long-stop date. Rescission under Article 423(1) requires a breach by the other party, but a condition precedent can fail without anyone being in breach, and a party that rescinds or terminates without grounds becomes the party in breach (Articles 427(5) and 428(5)). Give the share purchase agreement in Vietnam an express right to terminate if the conditions are not met by the long-stop date (unilateral termination is allowed where the parties have so agreed, Article 428(1)) and say how money already paid is returned. The statutory "fundamental change of circumstances" (Article 420) has five cumulative conditions and may require a court, so it does not replace a MAC clause.
Gun-jumping and interim covenants. Implementing a notifiable concentration before clearance is a violation (Article 44(2) and (3) of the Competition Law), so the buyer should not direct the target's business or exercise shareholder rights before then. The target is a separate legal person, and a seller's promise that "the company will not borrow or pay dividends" is only as good as the seller's votes; SPAs usually make the target a party for its own covenants.
Completion. For a foreign buyer in a pre-registration case, shareholder rights arise on completion of the change-of-shareholder procedure at the business registration office (Article 76(6) of Decree 96/2026); for an unlisted joint stock company that procedure is the notification of a change in foreign shareholders (Article 51 of Decree 168). That comes after entry in the register under Article 127(6) of the Law on Enterprises, and we have seen no guidance reconciling the two dates. Set the passing of risk and economic benefit in the contract, and have the buyer refrain from exercising shareholder rights until the notification is recorded.
Price, currency and the payment route#
In a share purchase agreement in Vietnam, the price and payment method are agreed by the parties "or determined by a third party at the parties' request" (Article 433(1) of the Civil Code), which supports handing a completion-accounts dispute to an independent accountant. A locked-box mechanism works as a contract matter: Vietnamese law has no concept of leakage, so list what counts as leakage, what is permitted and how it is repaid. If the price is adjusted after tax has been declared, a supplementary return is filed (Article 12 of Decree 252), so say who files and who bears the difference. If the price is out of line with market value, the tax authority may reassess it, and for a corporate seller selling part of its stake it may revalue the whole enterprise (Article 13(2)(a) of Decree 320). We have found no specific tax guidance on earn-outs.
Currency. Circular 38/2026/TT-NHNN applies to foreign-invested enterprises under its Article 6(1) (founded by a foreign investor, or more than 50% foreign-owned) and to the investors in them (Article 2). For such a target, the price for a transfer between a resident and a non-resident, or between two residents, must be set and paid in Vietnamese dong (Article 13(3)); foreign currency is allowed between non-resident investors, plus certain cases involving members of the International Financial Centre (Article 13(1)). Article 13(3) covers both setting the price and paying it, so a share purchase agreement in Vietnam between a non-resident Singapore buyer and a resident shareholder of such a target must state the price in dong; a USD price converted at payment satisfies only the payment half.
The circular does not deal expressly with the deal that itself takes foreign ownership above 50%: before it, the target is not yet an Article 6(1) company, and Article 7(6) only requires the target to open a capital account once the 50% line is crossed. For that deal, the safe course is still to price in dong and agree with the bank which account carries the payment.
Payment route. For those targets, payment between a non-resident and a resident must go through the direct investment capital account; payments between two non-residents or two residents do not (Article 10(1)). A deal that takes foreign ownership above 50% obliges the target to open that account (Article 7(6)). The account rules are in direct investment capital account in Vietnam. For targets outside Article 6(1), a non-resident foreign buyer pays from its own indirect investment capital account (Article 4 of Circular 03/2025/TT-NHNN).
Warranties and indemnities: how far does a share purchase agreement in Vietnam protect the buyer?#
Vietnamese law has no separate regimes for representations and warranties. The seller's statutory warranties cover title free from third-party claims (Article 444) and the quality of a "thing" sold (Article 445). A share is not a thing: Article 105(1) distinguishes things from valuable papers and property rights, and the separate rule on sales of property rights only requires the seller to hand over the documents and complete the transfer of ownership (Article 450(1)). The quality of property sold is whatever the parties agree (Article 432(1)). On their wording, these articles give a share buyer no claim about the state of the target, such as unpaid tax, labour disputes or missing licences, and we have found no judgment applying Article 445 to shares. The duties to provide information (Articles 387 and 443) are a weak fallback. All protection on the business must be written into the SPA, and warranties and indemnities need drafting that works under Vietnamese remedies.
| SPA term | Closest Vietnamese concept | Where a straight translation fails |
|---|---|---|
| Representations and warranties | Contractual obligations; an untrue statement is a breach (Article 351), compensated under Articles 360 and 419. A deliberately false statement may be deception (Article 127) | Invalidation for deception has a two-year limitation (Article 132) and leads to mutual restitution (Article 131), not to keeping the deal and claiming money |
| Indemnity | No separate institution; closest is an agreed payment obligation | Drafted as "compensation for damage", the buyer may have to prove loss and causation (Articles 360 and 419) |
| Liquidated damages | Contractual penalty (Article 418 Civil Code; Article 301 Law on Commerce) | Possibly capped at 8%; under the Civil Code, a penalty alone excludes damages unless both are agreed (Article 418(3)) |
| Disclosure, "fairly disclosed" | No rule; Article 444(3) bars damages where the buyer knew the asset belonged to someone else | State whether due diligence knowledge limits claims |
| Cap, de minimis, basket | Full compensation "unless otherwise agreed" (Article 360) | Limits are allowed. No article bars a cap for deliberate misconduct, so carve out fraud yourself, relying on the good-faith principle (Article 3(3)). If the buyer instead has the contract invalidated for deception, the party at fault compensates under Article 131(4) |
| Survival period | Limitation is "provided by law" (Article 149(1)): three years (Article 429), or two years for commercial disputes (Article 319 Law on Commerce) | It can neither extend nor shorten limitation; it is a time limit (Article 144) the parties set for notices, like the complaint period that Article 318 of the Law on Commerce lets parties agree. We have seen no judgment on a claim notified after that window but within limitation |
| Escrow | Escrow deposit in a blocked account at a credit institution (Article 330) | A holdback is deferred payment, not escrow |
| Material adverse change | None; fundamental change of circumstances (Article 420) is a different mechanism | Do not translate MAC as force majeure; see force majeure in Vietnam |
| Joint and several | Joint obligation (Article 288) | Several sellers are not jointly liable unless agreed |
Does the 8% penalty cap apply? There is no settled answer. Commercial activity includes investment (Article 3(1) of the Law on Commerce), and penalties in commercial activity may not exceed 8% of the value of the breached obligation (Article 301), so a sale of shares between two companies investing for profit may be caught. The counter-argument relies on Article 4(2) and (3) of the Law on Commerce: share transfers are governed by the Law on Enterprises and the Civil Code, under which the penalty is whatever the parties agree (Article 418(2)). That argument is stronger where the seller is an individual not in business, but court practice does not support it: the newspaper Tin nhanh Chung khoan (22 November 2021) reported that the Hanoi People's Court, on appeal, treated a dispute over late payment for shares between two individuals as a business and commercial dispute and upheld the first-instance award of an 8% penalty, although the contract set a penalty of VND 5 million per day of delay. We have not seen the judgment and know of no precedent on the point. The safe course is to keep any penalty within 8% and rely on formula-based indemnities, holdbacks and escrow. The cap may change: a bill amending the Law on Commerce, led by the Ministry of Industry and Trade, goes to the National Assembly for debate and adoption at its second session (planned for 17 October to 21 November 2026); under the first draft, it repeals Chapter VII (Articles 292 to 319, including Article 301) from 1 March 2027 so that remedies follow the Civil Code. As of 14 October 2026 it has not been passed, and the first draft has no transitional rule for contracts already signed, so draft on the assumption that the 8% cap applies. The two regimes also differ on combining remedies: under the Law on Commerce an agreed penalty can be claimed together with damages (Article 307(2)); under the Civil Code both must be expressly agreed (Article 418(3)). See penalty for breach of contract in Vietnam.
Drafting indemnities that work locally (our recommendations):
- Write the indemnity as a payment of an ascertainable sum, for example "an amount equal to any tax or penalty assessed against the company for periods before completion by a decision of a competent authority", not "all losses".
- Give known risks found in due diligence their own specific indemnity, since general warranties may be cut back by a knowledge clause.
- Expect the duty to mitigate (Article 362) and reduction for the claimant's contributory fault (Article 363) to apply.
- With several individual sellers, agree joint liability or hold back part of the price.
Base the warranty list on legal due diligence; for data-heavy targets, see data protection due diligence in Vietnam.
Escrow and holdbacks: can the escrow be in foreign currency?#
Under Article 330 of the Civil Code, the obligor deposits money or valuable papers in a blocked account at a credit institution to secure an obligation, and on breach the bank pays the obligee. A share purchase agreement in Vietnam can use escrow for the price before completion or for part of the price after completion to secure indemnities. Release triggers must be things the bank can check itself: joint instructions, an award, expiry with no claim.
Whether the escrow can be in foreign currency depends on who pays whom. Between two non-residents, for a target under Article 6(1) of Circular 38, the price may be set and paid in foreign currency outside the capital account (Article 10(1)(a), Article 13(1)), so Circular 38 does not prevent an offshore USD escrow. Where a non-resident buyer pays a resident seller, the price is in dong and must pass through the direct investment capital account (Article 10(1)(b), Article 13(3)). The circular does provide for a failed deal: the capital account may receive the transfer price and refund it "where the transfer is not completed" (Articles 8 and 9, clause 1(b) and (c) and clause 2(i)). It lists no payment from that account into a third party's blocked account; the only possible basis is "other lawful payments" (Articles 8 and 9, clause 2(m)), which the bank assesses itself. We found no State Bank guidance on escrow within this flow, so fix the escrow clause of the share purchase agreement in Vietnam only after the bank holding the capital account confirms the structure in writing.
A holdback is simpler, but in our reading an individual seller pays tax on the full transfer price (Article 54(1) and (2)(b) of Decree 253), including the part not yet received.
Tax: who withholds, and what the share purchase agreement in Vietnam should say#
The seller bears the tax on a share purchase agreement in Vietnam, but the buyer or the target may have to file it. Rates and worked examples are in capital transfer tax in Vietnam and corporate income tax on capital transfer.
| Seller | Tax and who files | What the SPA should say |
|---|---|---|
| Individual | 0.1% of the transfer price (Articles 10(2) and 54(1) Decree 253). A resident individual files, unless the company has appointed a securities company to manage its shareholder list (Article 56(4)(b)); for a non-resident, see below the table. Tax must be settled before the company changes its shareholder list; if the company changes it anyway, the company files and pays on the seller's behalf (Article 56(5)) | Proof of tax payment as a condition to registration, or authority to deduct from the price |
| Vietnamese company | Corporate income tax on the gain, recognised when ownership passes (Article 13 Decree 320) | Price defensible against market value |
| Foreign company | 2% of taxable revenue arising in Vietnam (Article 12(3)(i) Decree 320). A Vietnamese corporate or resident individual buyer withholds and pays; if both parties are foreign, the Vietnamese company whose capital is sold files and pays (Article 17(6)(b) of the Law on Tax Administration 108/2025/QH15) | Right to withhold from the price, no gross-up unless agreed; in an offshore deal, seller funds the target before the filing deadline |
A non-resident foreign individual selling unlisted shares to a Vietnamese organisation or a resident individual: the buyer withholds the 0.1% and files and pays it. The basis is Article 17(6)(b) of the Law on Tax Administration, which speaks of "capital transfer", a term the Law on Personal Income Tax uses to include securities transfers (Article 3(4)(b) of Law 109/2025/QH15), together with Article 67(1) of Decree 253: a person paying income to a non-resident individual withholds before paying, and Article 67(4)(b) exempts only capital transfers by residents. Article 56(4)(b) of Decree 253 and Article 22(5)(b.2) of Circular 89/2026/TT-BTC (the individual files directly) do not distinguish residents, so a mismatch remains; as the Law ranks higher, the share purchase agreement in Vietnam should have the buyer withhold from the price and pay. If both parties are foreign, the target files and pays (second sentence of Article 17(6)(b)). We have seen no tax ruling under the 2026 texts, so the SPA should also say which party files to avoid a double filing.
Indemnity payments after completion have not, to our knowledge, been classified as a price adjustment or as other income of the buyer; allow for a supplementary return if the tax office treats them as a price adjustment.
Governing law, arbitration and language#
Choosing foreign governing law. A share purchase agreement in Vietnam may choose its governing law only where the relationship has a foreign element, such as a foreign individual or legal entity as a party (Article 663(2), Article 664(2) and Article 683(1) of the Civil Code). The Law on Investment goes further: a contract with at least one foreign investor, or a Vietnamese company more than 50% foreign-owned under Article 20(1), may choose foreign law or international investment practice if that does not contravene Vietnamese law (Article 4(6)). So a Vietnamese subsidiary of a foreign group buying from Vietnamese shareholders can still pick English or Singapore law.
What stays Vietnamese. Relations between a legal entity and its members follow the law of the entity's nationality (Article 676(2)), so an English-law SPA cannot override Articles 120 and 127 of the Law on Enterprises, and investment registration, tax and foreign exchange rules are mandatory in any case. Foreign law is also disapplied where its effect contravenes the basic principles of Vietnamese law (Article 670(1)(a)). A common structure is a foreign-law SPA plus a short Vietnamese-law transfer instrument for the register, cross-referring to each other.
Arbitration. Disputes between investors where at least one is a foreign investor or an Article 20(1) company may go to Vietnamese courts, Vietnamese arbitration, foreign or international arbitration, or ad hoc arbitration (Article 13(3) of the Law on Investment); disputes between domestic investors go only to Vietnamese arbitration or courts (Article 13(2)). Arbitration covers disputes arising from commercial activity, disputes where at least one party is engaged in commercial activity, and other disputes that a law allows to be arbitrated (Article 2 of the Law on Commercial Arbitration), so jurisdiction can be challenged where both parties are individuals not in business. There is an argument for jurisdiction: buying shares is a form of investment (Article 18(2) of the Law on Investment), investors include individuals (Article 3(18)), and Article 13(2) sends disputes between domestic investors relating to business investment to Vietnamese arbitration or courts, which may make them "other disputes that a law allows to be arbitrated" under Article 2(3) of the Law on Commercial Arbitration. We have found no court decision annulling or upholding an award on that basis, so between two individuals a court clause carries less jurisdiction risk. In a dispute with a foreign element the tribunal applies the governing law chosen by the parties (Article 14(2)), and the language is agreed where there is a foreign element or a foreign-invested party (Article 10(2)). See commercial arbitration in Vietnam, and for the post-completion relationship among shareholders, shareholders agreement in Vietnam.
LexData drafts and negotiates the share purchase agreement in Vietnam, the framework agreement and the short-form transfer instrument, and handles the foreign investor's share purchase registration and the change-of-shareholder notification through our capital contribution and share purchase service; reviewing the target before warranties are agreed is part of our legal due diligence service. Tax filings are made by the parties or their tax advisers.
