VI Capital contribution, purchase of shares, and purchase of stakes are common forms of investment for both domestic and foreign investors in Vietnam. This is not only a way to effectively allocate financial resources but also a path to directly participate in the management, operation, and benefit from the growth of the enterprise. However, these great potentials come with significant legal risks if the investor is not fully aware of the regulations. Compliance with legal procedures and conditions is a key factor to ensure the rights and success of the investment. Let Pham Consult help you understand in detail the legal regulations regarding this form of investment to gain a comprehensive view and make accurate decisions.
I. Regulations of Vietnamese Investment Law on investment in form of capital contribution, purchase of shares or stakes
Investment in the form of capital contribution, purchase of shares or stakes is a form of investment recognized by Vietnamese law. The 2020 Investment Law stipulates that investors have the right to contribute capital, purchase shares or purchase stakes of an economic organization. However, the contribution of capital, purchase of shares or stakes by foreign investors must meet the following regulations and conditions:
– Market access conditions for foreign investors as specified in Article 9 of this Law;
– Guarantee of national defense and security as stipulated by the 2020 Investment Law;
– Regulations of land law regarding the conditions for receiving land use rights and the conditions for land use in border islands, communes, wards, and townships, and coastal communes, wards, and townships.
II. Forms of capital contribution, purchase of shares or stakes
According to Article 25 of the 2020 Investment Law, investors may contribute capital, purchase shares, or purchase stakes of an economic organization in the following forms:
- Regarding capital contribution
Investors may contribute capital to an economic organization in the following forms:
(i) Purchasing initial public offering shares or additional issued shares of a joint-stock company;
(ii) Contributing capital to a limited liability company or partnership;
(iii) Contributing capital to other economic organizations not covered by cases (i) and (ii) above.
- Regarding purchase of shares or stakes
Investors may purchase shares or purchase capital contributions of an economic organization in the following forms:
(i) Purchasing shares of a joint-stock company from the company or its shareholders;
(ii) Purchasing stakes of a member of a limited liability company to become a member of the limited liability company;
(iii) Purchasing stakes of a contributing member in a partnership to become a contributing member of the partnership;
(iv) Purchasing stakes of a member of another economic organization not covered by cases (i), (ii), and (iii) above.
III. Conditions and principles for investment activities in the form of capital contribution, purchase of shares or stakes
The conditions and principles for investment activities in the form of capital contribution, purchase of shares or stakes are specified in Article 65 of Government Decree No. 31/2021/ND-CP. Accordingly:
- Domestic investors contributing capital, purchasing shares, or purchasing stakes in an economic organization established in Vietnam shall comply with the conditions and procedures specified in the Enterprise Law and corresponding laws for each type of economic organization.
- The contribution of capital, purchase of shares, or stakes on the securities market shall comply with the provisions of the securities law.
- State-owned enterprises with 100% charter capital held by the State, and the representatives of the State capital invested in the enterprise must comply with the conditions and procedures specified by the law on the management and use of state capital invested in production and business at the enterprise; the law on the management and use of public assets, and other relevant laws when carrying out investment activities in the form of capital contribution, purchase of shares, or or stakes of an economic organization or transferring capital contributions, shares to other organizations or individuals.
- Foreign investors contributing capital, purchasing shares, or purchasing stakes in an economic organization established in Vietnam must meet the conditions specified in Clause 2, Article 24 of the 2020 Investment Law, including:
– Market access conditions for foreign investors when contributing capital, purchasing shares, or purchasing stakes in an economic organization established in Vietnam as specified in Clause 3, Article 9 of the 2020 Investment Law and Articles 15, 16, and 17 of Decree 31/2021/ND-CP;
– Conditions on national defense and security assurance and conditions on land use for economic organizations with foreign investors contributing capital, purchasing shares, or purchasing stakes if that economic organization has a Certificate of Land Use Rights in border islands, communes, wards, and townships and coastal communes, wards, and townships; other areas affecting national defense and security, except for economic organizations implementing investment projects in industrial zones, export processing zones, high-tech zones, and economic zones established under government regulations.
- Foreign organizations and individuals receiving shares or capital contributions in an economic organization established in Vietnam through contracts of exchange, donation, other contracts of transfer of ownership as prescribed by law, or through inheritance must meet the conditions specified in Clause 4, Article 65 of Decree 31/2021/ND-CP and carry out the procedures prescribed for foreign investors investing in the form of capital contribution, purchase of shares, or or stakes.
IV. Procedures for investment in the form of capital contribution, purchase of shares, or stakes for foreign investors
- Cases requiring registration procedures for capital contribution, purchase of shares, or stakes
According to Clause 1, Article 26 of the 2020 Investment Law and Clause 1, Article 66 of Decree 31/2021/ND-CP, investors contributing capital, purchasing shares, or purchasing capital contributions of an economic organization must meet the legally prescribed conditions; at the same time, the economic organization with foreign investors investing in the form of capital contribution, purchase of shares, or or stakes must carry out procedures for registration of changes of members or shareholders at the business registration agency in accordance with the law on enterprises and other corresponding laws for each type of economic organization.
However, before proceeding with the procedure for changing members or shareholders, a foreign investor and the economic organization with the foreign investor contributing capital, purchasing shares, or purchasing capital contributions must carry out the registration procedure for capital contribution, purchase of shares, or or stakes if they fall into one of the following cases:
– The capital contribution, purchase of shares, or stakes leads to an increase in the ownership ratio of foreign investors in an economic organization operating in business lines subject to conditional market access for foreign investors;
– The capital contribution, purchase of shares, or stakes leads to the foreign investor or economic organization specified in Points a, b, and c, Clause 1, Article 23 of this Law holding more than 50% of the charter capital of the economic organization in the following cases:
+ Increasing the foreign investor’s charter capital ownership ratio from less than or equal to 50% to more than 50%.
+ Increasing the foreign investor’s charter capital ownership ratio when the foreign investor already holds more than 50% of the charter capital in the economic organization;
– The foreign investor contributes capital, purchases shares, or purchases stakes of an economic organization that has a Certificate of Land Use Rights in border islands, communes, wards, and townships; coastal communes, wards, and townships; other areas affecting national defense and security.
An investor not falling into the above cases who still wishes to register their capital contribution, purchase of shares, or or stakes of the economic organization may still carry out this procedure.
- Dossier for registration of capital contribution, purchase of shares, or stakes
The dossier for registration of capital contribution, purchase of shares, or stakes is specified in Clause 2, Article 66 of Decree 31/2021/ND-CP (amended and supplemented by Decree 168/2025/ND-CP), and includes the following documents:
(i) Written request for registration of capital contribution, purchase of shares, or stakes containing the following information: business registration information of the economic organization where the foreign investor plans to contribute capital, purchase shares, or purchase capital contributions; business lines; list of owners, members, founding shareholders, list of owners, members, shareholders who are foreign investors (if any); foreign investor’s charter capital ownership ratio before and after the contribution, purchase; actual transaction value of the capital contribution, purchase of shares, or or stakes contract; information about the economic organization’s investment project (if any);
(ii) Copies of legal documents of the individual or organization contributing capital, purchasing shares, or purchasing capital contributions and the economic organization with the foreign investor contributing capital, purchasing shares, or purchasing capital contributions;
(iii) Principle agreement on the capital contribution, purchase of shares, or or stakes between the foreign investor and the economic organization with the foreign investor contributing capital, purchasing shares, or purchasing capital contributions, or between the foreign investor and the shareholder or member of that economic organization;
(iv) Copy of the Certificate of Land Use Rights of the economic organization with the foreign investor contributing capital, purchasing shares, or purchasing capital contributions (for the case specified in Point b, Clause 4, Article 65 of Decree 31/2021/ND-CP).
- Procedure for registration of capital contribution, purchase of shares, or stakes
Step 1: Submission of dossier
The economic organization with a foreign investor investing in the form of capital contribution, purchase of shares, or stakes that is required to carry out the registration procedure shall submit 01 set of dossiers to the Investment Registration Authority where the economic organization is headquartered.
Step 2: Dossier review
Case 1: Cases specified in Points a and b, Clause 2, Article 26 of the 2020 Investment Law: Within 15 days from the date of receiving a valid dossier, the Investment Registration Authority shall examine the fulfillment of conditions for capital contribution, purchase of shares, or stakes specified in Clause 2, Article 24 of the Investment Law and Clause 4, Article 65 of Decree 31/2021/ND-CP and notify the investor. The written notice shall be sent to the foreign investor and the economic organization with the foreign investor contributing capital, purchasing shares, or purchasing capital contributions.
Case 2: The economic organization with a foreign investor contributing capital, purchasing shares, or purchasing stakes has a Certificate of Land Use Rights in border islands, communes, wards, and townships and coastal communes, wards, and townships; other areas affecting national defense and security, the Investment Registration Authority shall perform the following procedures:
– Within 02 days from the date of receiving a valid dossier, the Investment Registration Authority shall seek opinions from the Provincial Military Command and the Provincial Public Security regarding the fulfillment of conditions specified in Point b, Clause 4, Article 65 of Decree 31/2021/ND-CP;
– Within 05 days from the date of receiving the written request from the Investment Registration Authority, the Provincial Military Command and the Provincial Public Security shall give their opinions on the fulfillment of conditions for national defense and security assurance for the economic organization with the foreign investor contributing capital, purchasing shares, or purchasing capital contributions; if no opinion is received after the deadline, it shall be considered as an agreement to the fulfillment of conditions for national defense and security assurance for the economic organization with the foreign investor contributing capital, purchasing shares, or purchasing capital contributions;
– Within 10 days from the date of receiving a valid dossier, the Investment Registration Authority shall examine the fulfillment of conditions for capital contribution, purchase of shares, or or stakes according to the provisions of Clause 2, Article 24 of the Investment Law, Clause 4, Article 65 of Decree 31/2021/ND-CP, and based on the opinions of the Provincial Military Command and the Provincial Public Security, shall notify the investor. The written notice shall be sent to the foreign investor and the economic organization with the foreign investor contributing capital, purchasing shares, or purchasing stakes.
