A question from a client

A Vietnamese technology company recently asked Dilinh Legal a short question. Its shareholders wanted to transfer all of their shares to a parent company in Japan. In exchange, they would receive new shares in that Japanese company — with no cash crossing the border. The purpose of the whole transaction was to prepare the company for an IPO in Japan.

The question was: does Vietnamese law allow a cross-border share swap of this kind, and how long does it take?

The short answer: yes, it is permitted. But the procedure is very long, and it involves two of the most difficult authorities to deal with: the Ministry of Finance and the State Bank of Vietnam. This article summarises the legal basis, the steps involved and the points investors should consider before deciding.

Vietnamese law permits cross-border share swaps

Decree No. 103/2026/ND-CP dated 31 March 2026 on outward investment is the first instrument to expressly recognise the share swap. Under Article 6.4, Vietnamese investors may use their shares in a Vietnamese enterprise to pay for, or swap for, shares or contributed capital in an overseas economic organisation.

The key legal instruments governing a share swap are:

(1) Decree No. 103/2026/ND-CP on outward investment;

(2) Law on Investment No. 143/2025/QH15 and its implementing Decree No. 96/2026/ND-CP (procedures for capital contribution, share purchase, or equity purchase by foreign investors);

(3) Circular No. 34/2026/TT-NHNN on foreign exchange management for outward investment;

(4) Law on Tax Administration No. 108/2025/QH15 and Decree No. 320/2025/ND-CP (determination of the transfer price for tax purposes).

Three mandatory conditions for a share swap

Decree 103/2026/ND-CP sets out the following principles, among others:

(1) Vietnamese shareholders must complete the outward investment procedures before the swap. Each shareholder is a separate investor. Each shareholder must therefore complete its own procedures.

(2) The transaction value must be determined on market principles. In Dilinh Legal’s view, the enterprise must prepare a valuation report issued by an independent third party to establish its market value.

(3) The foreign company must complete the investment procedures in Vietnam. The company receiving the shares is a foreign investor. It must register its capital contribution and share purchase under the Law on Investment.

If the swap value is below market value, the tax authority may re-determine the transfer price and assess additional tax. The Ministry of Finance may also reject the application dossier if it lacks documents establishing the transaction value.

The share swap process: 6 steps and timeline

In Dilinh Legal’s experience, the full process takes around 34 weeks in practice. This excludes the time needed to prepare the documents and for the auditor to complete the valuation.

Steps

Procedures

Authority

1

Valuation of the shares of the Vietnamese company

Audit firm

2

Outward investment registration certificate

Ministry of Finance

3

Opening of an investment capital account and foreign exchange transaction registration

Provincial branch of the State Bank of Vietnam

5

Opening of an investment capital account for the Vietnamese company

Commercial bank

4

Approval of capital contribution, share purchase by the foreign investor (inbound M&A approval)

Department of Finance

6

Registration of changes and conversion into a single-member limited liability company

Business Registration Office, Department of Finance

Points to note on specific steps:

The timelines above exclude the time needed to prepare the dossiers and to supplement them at the authorities’ request.

What this means for investors and enterprises

A share swap is a lawful option, but not yet a fast one. Before settling on a structure, investors should weigh four points:

(1) The two most difficult authorities. The transaction requires approvals from the Ministry of Finance and the State Bank of Vietnam. In practice, both take much longer than the statutory timelines.

(2) The rules are new. Decree 103/2026/ND-CP was issued on 31 March 2026 and remains very new to both enterprises and the authorities. The authorities will need time to review a type of transaction they are seeing for the first time, particularly where no cash crosses the border. As a result, the licensing process — including the approval for the foreign investor to invest in Vietnam — is expected to take longer.

(3) The number of shareholders drives the workload. Each Vietnamese shareholder must complete its own outward investment and foreign exchange registration procedures. A company with more than 20 shareholders will need to file more than 20 dossiers in parallel.

(4) A valuation report is required, whichever structure you choose. Vietnamese shares must be valued on market principles. Engage an auditor before signing the share swap agreement, to establish the value and the swap ratio.

If timing is critical, investors should compare the share swap with other corporate restructuring options, such as a share transfer paid in cash. See also Dilinh Legal’s guide to the Vietnam M&A approval process.

Contact us

If your business is considering a share swap with a foreign company, contact Dilinh Legal at contact@dilinh.com for advice on the right structure and timeline.

About the author

Diep Hoang is the Founding Partner of Dilinh Legal, a business law firm in Ho Chi Minh City. She founded the firm in 2010 and has built it into one of Vietnam’s leading practices in Corporate and M&A. Diep has been ranked by Chambers as a leading lawyer in Corporate & M&A since 2020. Dilinh Legal has been ranked by Legal500 in Corporate & M&A since 2020 and by Chambers Asia since 2020.

This article is for general information only and does not constitute legal advice. For further information, please contact Dilinh Legal at contact@dilinh.com | +84 (28) 73000864 | dilinh.com