Can a Chinese Company Acquire a Vietnamese Company in 2026?

A Practical Guide to Foreign Share Acquisitions Under Vietnam’s New Investment Law#

Vietnam remains one of the most important overseas investment destinations for Chinese manufacturers, suppliers, logistics businesses, technology companies, and consumer brands. As operations become more sophisticated, many Chinese investors are moving beyond greenfield projects and asking a more targeted question: Can a Chinese company acquire an existing Vietnamese company?

The answer in many cases is yes. Foreign investors can contribute capital to, purchase shares in, or acquire ownership interests in Vietnamese enterprises, subject to market-access conditions, national-security considerations, land-related rules, sector-specific restrictions, and registration requirements.

The legal framework is particularly important in 2026 because Vietnam’s new Law on Investment 2025 took effect on March 1, 2026. Investors relying on older M&A checklists should therefore confirm that their transaction planning reflects current law.

This article explains the practical issues a Dongguan or other Chinese company should examine before acquiring a Vietnamese business.

1. Share Acquisition or Asset Acquisition?#

The first decision is whether the buyer wants to acquire shares in the Vietnamese company or acquire selected assets or an investment project.

A share acquisition means the buyer acquires ownership in the existing company. The company continues to own its licenses, contracts, employees, assets, and liabilities, subject to change-of-control rules.

An asset transaction allows the buyer to select particular assets or a project, but transfers may require separate approvals, contracts, tax treatment, and employee arrangements.

For many operating businesses, a share acquisition is simpler commercially but riskier from a historical-liability perspective.

2. What Does the 2025 Investment Law Change?#

Vietnam’s 2025 Law on Investment, effective March 1, 2026, modernized aspects of the investment framework. It continues to recognize foreign investment through capital contributions and purchases of shares or stakes.

Foreign investors must still satisfy market-access requirements and comply with national defense, security, and land-related conditions.

The new law also retains circumstances in which foreign investors must complete registration procedures before changing members or shareholders, including certain acquisitions in sectors subject to conditional market access and transactions that cause or increase foreign ownership above relevant thresholds.

The practical lesson is that “signing the SPA” and “being legally able to close” are different things.

3. Can a Chinese Buyer Own 100% of the Vietnamese Target?#

Sometimes yes. The answer depends primarily on the target’s business activities and the applicable foreign market-access conditions.

Vietnam maintains a framework under which foreign investors may face restrictions or conditions in particular sectors. These may arise from domestic law, Vietnam’s international commitments, or specialized regulatory regimes.

A buyer should therefore map every material business line of the target before agreeing on the ownership percentage.

A target that appears to be a simple manufacturing company may also hold distribution rights, logistics licenses, retail activities, education services, telecommunications activities, or other regulated functions that affect foreign ownership.

4. Market Access Is the First Legal Due-Diligence Question#

Before detailed financial or contractual due diligence, counsel should answer:

• What business lines are registered?
• What business is actually conducted?
• Which activities are conditional for foreign investors?
• Is there a foreign ownership cap?
• Are special qualifications required?
• Will a Chinese buyer change the target’s regulatory classification?

If the legal answer prevents the desired ownership structure, the deal must be restructured early.

5. When Is Pre-Closing M&A Registration Required?#

Under Vietnam’s investment framework, certain foreign acquisitions require registration before the company changes its shareholders or members.

The 2025 law identifies important triggers, including acquisitions that increase foreign ownership in businesses with conditional market access and transactions that move foreign ownership across specified control thresholds.

Land location can also matter, particularly where the target holds land-use rights in sensitive geographic areas.

The buyer should therefore determine regulatory filing requirements before setting an unrealistic closing date.

6. The 50% Threshold Matters#

Vietnam’s current investment law uses a more-than-50% concept in important parts of the foreign-invested-enterprise framework. Acquisitions that move foreign ownership from 50% or less to above 50%, or increase foreign ownership where it is already above 50%, can trigger procedural consequences in specified cases.

This means a transaction for 51% can be legally different from one for 49%, even if the commercial difference appears small.

Ownership thresholds should be modeled before signing.

7. National Defense, Security, and Land Considerations#

Vietnam’s investment law requires attention to national-defense and security issues, and to land-use conditions in certain sensitive locations.

A target with factories, warehouses, or land rights in coastal, border, island, or otherwise sensitive areas may require additional analysis.

The buyer should not treat land due diligence as a purely property-law exercise. It can affect investment approval.

8. What Should Be Included in Legal Due Diligence?#

A foreign buyer should conduct due diligence proportionate to the transaction value and risk.

Key areas usually include:

Corporate#

• incorporation documents;
• charter;
• shareholders or members;
• capital contributions;
• share transfers;
• related-party transactions;
• authority and approvals.

Investment licenses#

• investment registration certificates;
• enterprise registration certificates;
• investment policy approvals;
• amendments;
• project conditions.

Business licenses#

• sector licenses;
• product approvals;
• trading or distribution permissions;
• environmental permits;
• construction approvals.

Land and property#

• land-use rights;
• industrial-park leases;
• factory ownership;
• mortgages;
• zoning;
• environmental compliance.

Contracts#

• key customers;
• suppliers;
• distributors;
• leases;
• loans;
• guarantees;
• change-of-control clauses.

Employment#

• employment contracts;
• social insurance;
• expatriate permits;
• termination exposure;
• bonus and benefit obligations.

Tax and customs#

• corporate tax;
• VAT;
• transfer pricing;
• import/export compliance;
• customs valuation;
• tax audits.

IP and technology#

• trademarks;
• patents;
• software;
• licenses;
• employee-created IP;
• trade secrets.

Disputes#

• litigation;
• arbitration;
• government investigations;
• customer claims;
• labor disputes.

9. Why Factory and Land Due Diligence Is So Important#

For manufacturing acquisitions, the factory is often the central asset. But the legal structure may be more complex than it appears.

The target may:

• own land-use rights;
• lease land in an industrial park;
• lease the factory building from an affiliate;
• operate on land held by another group company;
• have mortgages or security interests.

The buyer should confirm whether the target can continue using the site after the acquisition and whether any consent is required.

10. Environmental Liabilities#

Manufacturing targets can carry historical environmental risk. A buyer should review:

• environmental approvals;
• waste-disposal contracts;
• wastewater compliance;
• emissions;
• hazardous-material handling;
• inspection records;
• penalties;
• remediation obligations.

A share buyer may inherit economic exposure to historical noncompliance even if the problem arose before closing.

11. Employment Liabilities#

Vietnamese labor compliance should be reviewed carefully. Common issues include:

• incomplete labor contracts;
• overtime;
• social-insurance contributions;
• foreign-worker permits;
• internal labor rules;
• termination disputes;
• trade-union or employee-representation issues.

A buyer should understand both the legal exposure and the impact on post-closing workforce stability.

12. Tax and Customs Risk#

A target engaged in export manufacturing may enjoy tax incentives or customs arrangements linked to its project or location.

The buyer should confirm whether incentives survive the transaction and whether the company has complied with their conditions.

Customs issues are particularly important where the company imports duty-exempt machinery or inputs for export production.

13. The Share Purchase Agreement#

The SPA should reflect the due-diligence findings. Key provisions usually include:

• purchase price;
• payment mechanism;
• conditions precedent;
• regulatory approvals;
• seller representations and warranties;
• tax indemnities;
• specific indemnities;
• closing documents;
• non-compete provisions;
• confidentiality;
• dispute resolution;
• governing law.

The document should not be copied from a domestic China acquisition without localization.

14. Conditions Precedent#

A Chinese buyer should identify everything that must happen before closing.

Typical conditions may include:

• M&A registration approval;
• sector approval;
• lender consent;
• landlord or industrial-park consent;
• release of security;
• correction of licenses;
• settlement of shareholder loans;
• key-customer consent.

If these conditions are not clearly defined, the buyer can be pressured to close before the target is legally ready.

15. Purchase-Price Protection#

Where due diligence reveals uncertainty, the parties can use mechanisms such as:

• holdbacks;
• escrow;
• deferred consideration;
• price adjustments;
• earn-outs;
• indemnity caps and baskets.

The appropriate structure depends on the seller’s creditworthiness and the risk.

16. How Should the Buyer Pay the Purchase Price?#

Foreign investment transactions in Vietnam require careful attention to capital-account and foreign-exchange rules. Official investment guidance refers to the use of appropriate capital accounts for foreign-investment transactions.

The buyer should coordinate the payment route with local counsel and the bank before closing.

A payment made through the wrong channel can create serious compliance and repatriation problems.

17. China-Side ODI Rules#

A Chinese corporate buyer must also consider outbound-investment procedures in China.

Depending on the transaction, Chinese approvals, filings, and foreign-exchange procedures may need to be completed before funds can be remitted.

The Vietnam closing timetable should therefore be coordinated with the China-side ODI timeline.

18. Competition Law#

Larger acquisitions may require competition analysis. Whether a filing is required depends on Vietnamese merger-control rules and the parties’ economic position.

Competition analysis should occur early because it can affect closing certainty and timing.

19. Sector-Specific Regulation#

Some Vietnamese sectors have specialized foreign-investment rules. Examples can include:

• banking;
• insurance;
• telecommunications;
• education;
• logistics;
• retail and distribution;
• real estate;
• media-related activities.

A generic M&A checklist is not enough for a regulated target.

20. Can You Acquire Only Part of the Company?#

Yes. A Chinese investor may acquire a minority stake, controlling stake, or potentially 100%, subject to applicable rules.

Minority investments require special attention to shareholder protections. The investor should negotiate:

• board seats;
• veto rights;
• information rights;
• pre-emption rights;
• anti-dilution protection;
• reserved matters;
• exit rights;
• drag/tag rights;
• deadlock mechanisms.

A 30% stake without contractual protection may provide less practical influence than expected.

21. Joint Venture Versus Acquisition#

A new joint venture may provide a cleaner liability profile but requires building operations from scratch.

An acquisition provides immediate access to assets, staff, and customers but carries historical risk.

The decision should reflect the investor’s commercial objective, not only legal convenience.

22. Post-Closing Integration#

Legal work does not end at closing. The buyer should implement a 100-day legal integration plan covering:

• governance;
• bank authority;
• contract-signing limits;
• compliance policies;
• tax and transfer pricing;
• employment harmonization;
• IP ownership;
• related-party agreements;
• data access;
• license updates.

Many acquisition problems occur because the buyer closes successfully but fails to integrate control systems.

23. Common Mistakes#

Mistake 1: Assuming manufacturing means no foreign ownership restrictions#

Check all registered and actual business lines.

Mistake 2: Signing before confirming M&A approval requirements#

The transaction timetable must reflect regulatory steps.

Mistake 3: Ignoring land location#

Sensitive land can affect investment review.

Mistake 4: Relying only on financial due diligence#

Licenses, labor, customs, and environmental liabilities can be equally important.

Mistake 5: Paying through the wrong account#

Foreign-exchange compliance matters.

Mistake 6: Ignoring China-side ODI timing#

The buyer needs a lawful funding route.

Mistake 7: Using a weak dispute clause#

Cross-border enforceability should be planned.

24. Practical 2026 Acquisition Checklist#

Before signing, the Chinese buyer should confirm:

1. What percentage does it want to acquire?
2. Is that ownership level legally permitted?
3. What business lines does the target actually conduct?
4. Is M&A registration required?
5. Are national-security or land issues involved?
6. Does the target hold valid investment and business licenses?
7. Are there tax or customs exposures?
8. Is the factory legally usable after closing?
9. Are environmental approvals current?
10. Are employee liabilities quantified?
11. Are key contracts transferable or subject to change-of-control consent?
12. What IP does the target really own?
13. Is competition approval required?
14. How will the purchase price be remitted?
15. Are China-side ODI requirements satisfied?
16. What warranties and indemnities are needed?
17. What happens if approval is denied?
18. What is the post-closing governance plan?

FAQ#

Can a Chinese company buy 100% of a Vietnamese company?#

In many sectors, yes, but foreign ownership depends on market-access and sector-specific conditions. A business-line review is essential.

Do all acquisitions need investment approval?#

No. The filing requirement depends on the transaction and target. However, specified transactions involving conditional sectors, foreign-control thresholds, or sensitive land can require pre-closing registration.

Can we pay the seller directly from China?#

The payment structure must comply with both Vietnamese foreign-exchange/capital-account rules and Chinese outbound-investment rules. The bank route should be confirmed before payment.

Should we use Vietnamese or foreign law for the SPA?#

The choice depends on the transaction structure and enforceability. Mandatory Vietnamese law will still govern many corporate, investment, land, and regulatory issues.

Is arbitration common?#

Arbitration is frequently considered for cross-border M&A, especially where neutrality and enforceability are priorities. The seat, institution, language, and interim-relief strategy should be chosen carefully.

Conclusion#

A Chinese company can acquire a Vietnamese company in 2026, but the transaction must be structured under Vietnam’s current investment framework rather than treated as a simple private share transfer. The buyer must confirm market access, foreign ownership, M&A registration, land and security issues, licenses, tax, labor, customs, environmental liabilities, capital-account mechanics, and China-side outbound-investment requirements.

Vietnam’s new Investment Law makes it even more important to use current guidance. The strongest acquisition strategy begins with regulatory feasibility, proceeds through disciplined due diligence, and ends with a carefully structured SPA and post-closing integration plan.

For Dongguan manufacturers, the commercial appeal of acquiring a Vietnamese business can be substantial: local production, customer access, supply-chain resilience, and regional growth. But those benefits are sustainable only when the investor understands exactly what it is buying and how foreign ownership changes the target’s legal position.

This article is for general informational purposes only and does not constitute Vietnamese or Chinese legal advice. Transaction-specific advice should be obtained before signing or funding an acquisition.

25. What Happens Between Signing and Closing?#

Cross-border acquisitions often have a meaningful gap between signing the SPA and completing the transfer. During that period, the seller still controls the target, but the buyer has already committed significant time and resources. The SPA should therefore contain interim operating covenants.

These provisions can restrict the seller from taking unusual actions without buyer consent, such as:

• issuing new shares;
• borrowing significant debt;
• disposing of major assets;
• entering material related-party transactions;
• terminating key employees;
• changing major customer contracts;
• paying unusual dividends;
• modifying licenses or business lines.

Without interim covenants, the buyer may discover at closing that the company is materially different from the business it agreed to acquire.

26. Regulatory Approval Risk in the SPA#

Where M&A registration or sector approval is required, the parties should allocate the approval risk clearly. Important questions include:

• Who prepares the filing?
• Who bears the cost?
• What information must the seller provide?
• What happens if the authority imposes conditions?
• How long must the parties wait?
• When can either party terminate?
• Is the buyer required to accept structural remedies?

These issues should not be left to informal cooperation after signing.

27. Representations and Warranties Should Be Vietnam-Specific#

A generic international SPA may contain dozens of standard warranties, but the most useful warranties are those tied to the actual Vietnamese risk profile.

For a manufacturing target, buyers often focus on:

• valid investment registration;
• valid enterprise registration;
• lawful capital contributions;
• land and lease rights;
• construction legality;
• environmental compliance;
• tax incentives;
• customs compliance;
• social insurance;
• work permits;
• product licenses;
• ownership of molds and tooling;
• customer rebates and side agreements;
• intellectual-property rights;
• related-party balances.

The warranty schedule should force the seller to disclose exceptions before closing.

28. Indemnities for Known Problems#

If due diligence identifies a specific risk, the buyer should not rely only on a general warranty. A specific indemnity can be more effective.

Examples include:

• an unresolved tax audit;
• unpaid social insurance;
• environmental remediation;
• a customs-classification dispute;
• an unlicensed construction extension;
• a pending employee claim;
• a disputed land lease.

The indemnity should define the protected loss, claim process, survival period, and recovery source.

29. Escrow and Holdback Structures#

Recovery against an overseas seller after closing can be difficult. For that reason, part of the purchase price may be held in escrow or retained for a period where material risks remain.

The buyer should consider:

• escrow jurisdiction;
• release conditions;
• dispute mechanism;
• bank fees;
• interest;
• tax consequences;
• how claims are notified.

A contractual indemnity is only as strong as the seller’s ability to pay.

30. Management Retention and Founder Dependence#

Many Vietnamese private companies depend heavily on a founder or local management team. A Chinese buyer should identify whether key customer, supplier, licensing, or government relationships are personal rather than institutional.

If management retention is important, the transaction may need:

• employment or service agreements;
• retention bonuses;
• non-compete and non-solicit provisions where enforceable;
• transitional support;
• handover obligations;
• customer-introduction plans.

The buyer should avoid paying for “relationships” that disappear the day after closing.

31. Data and Cyber Due Diligence#

Modern manufacturing and distribution targets often hold customer, employee, supplier, and production data. The buyer should understand what data the target collects, where it is stored, which systems are used, whether cross-border transfers occur, and whether cybersecurity incidents have occurred.

Post-closing integration can create new data-transfer issues if the Chinese parent immediately connects the target to group systems. The integration plan should therefore include local data-law review.

32. IP Ownership Can Be More Complicated Than the Trademark Register#

A target may use brands registered in the founder’s name, software licensed informally from an affiliate, technical drawings owned by a customer, or product designs created by employees without clear assignment documentation.

The buyer should confirm not only registration but beneficial and contractual ownership.

For manufacturers, molds, tooling, source code, process know-how, customer specifications, and domain names can be commercially critical IP assets even when they do not appear in a formal IP register.

33. Customer and Supplier Change-of-Control Clauses#

Some contracts permit termination if the target changes ownership. This can be particularly important for multinational-customer supply agreements, bank facilities, industrial-park leases, and exclusive distributorships.

Due diligence should identify these clauses early so consents can become conditions precedent.

A buyer should not assume that the target’s largest customer will automatically continue after acquisition.

34. Closing Mechanics#

Cross-border closings should be documented through a detailed closing agenda. It should identify:

• regulatory approvals;
• share-transfer documents;
• updated member/shareholder registers;
• amended charter;
• board and management changes;
• bank mandates;
• company seals and certificates;
• original licenses;
• resignations;
• repayment of shareholder loans;
• release of security;
• payment evidence.

A “simultaneous” closing may still require several legal steps in sequence.

35. Post-Closing Claims#

If a warranty breach appears after closing, the buyer should follow the SPA claim procedure strictly. Notice clauses can require specific information and deadlines.

The buyer should preserve evidence, quantify loss, and avoid actions that could waive or prejudice the claim.

Where the seller remains in Vietnam or retains assets, local enforcement options should be considered early.

36. A 100-Day Integration Checklist#

After closing, the Chinese buyer should consider:

1. replace or confirm legal representatives and management;
2. update bank signing authority;
3. secure company seals, licenses, and originals;
4. confirm tax and customs calendars;
5. review employment and payroll;
6. update key customer and supplier contacts;
7. register IP transfers or licenses;
8. implement group compliance policies;
9. document intercompany services and pricing;
10. review data transfers;
11. audit licenses against actual business activities;
12. monitor all pre-closing indemnity items.

A disciplined integration plan helps ensure that the legal value purchased on closing day is not lost through weak post-closing control.