Overview
How does corporate restructuring in Vietnam work under the Law on Enterprises?
Restructuring is a business term; the law calls these transactions the reorganisation of an enterprise: division, separation, consolidation, merger and conversion of company type (Chapter IX of the Law on Enterprises No. 59/2020/QH14; Clause 1, Article 60 of Decree 96/2026/ND-CP uses the term “reorganisation” for all five). In a division, an LLC or joint stock company splits its assets, rights, obligations, members and shareholders to form two or more new companies, and ceases to exist once the new companies are registered (Clauses 1 and 4, Article 198 of the Law on Enterprises No. 59/2020/QH14). In a separation, part of the company is transferred to a new company while the original company continues (Clause 1, Article 199). A conversion keeps the business running under a different company type (Articles 202 to 205). A single-member LLC that admits another member to become a multi-member LLC is not covered by Articles 202 to 205 of the Law on Enterprises; it is a change of members and capital contribution, and Decree 168/2025/ND-CP only sets out the registration file for it (Clause 2, Article 26).
The first question in any corporate restructuring in Vietnam is who pays the debts. After a division, the new companies are jointly liable for the unpaid debts, employment contracts and other obligations of the divided company, unless they agree with creditors, customers and employees that one company will perform them (Clause 4, Article 198). After a separation, the original and the separated company are jointly liable unless otherwise agreed (Clause 4, Article 199). A converted company takes over the debts, including tax debts, and the employment contracts of the old company (Clause 4, Article 202; Clause 4, Article 203; Clause 3, Article 204), but the owner of a private enterprise remains personally liable for debts incurred before the converted company was registered (Clause 3, Article 205). Because a division, separation or conversion can create or transfer tax obligations, the tax and accounting position should be reviewed with a specialist adviser before the resolution is adopted.
When an LLC converts into a joint stock company, or a joint stock company into a multi-member LLC, the company must register within 10 days of completing the conversion (Clause 3, Article 202; Clause 2, Article 204). A joint stock company becoming a single-member LLC has 15 days from the date it is left with one shareholder or completes the transfer of shares (Clause 3, Article 203). The business registration office issues the certificate within 3 working days of receiving the file (Articles 202 to 205 of the Law on Enterprises). Foreign-invested companies must also amend their investment project after the reorganisation (Clause 2, Article 60 of Decree 96/2026/ND-CP), and personal data moved to the successor company needs a transfer agreement (Point c, Clause 1, Article 17 of the Personal Data Protection Law No. 91/2025/QH15; Clause 1, Article 7 of Decree 356/2025/ND-CP).
