Foreign Investment Divestment Vietnam refers to the process of reducing or completely withdrawing foreign investment from a Vietnamese company or investment project. Foreign investors may divest for many reasons, such as restructuring their global business, changing investment strategies, selling an underperforming business, transferring ownership to another investor, or exiting the Vietnamese market. However, divestment is not simply a matter of selling an investment and transferring the proceeds overseas. Depending on the structure of the investment, the investor may need to complete procedures involving investment registration, share or capital transfer, project transfer, tax, accounting, corporate records, and foreign exchange.

Vietnam’s current Law on Investment No. 143/2025/QH15 has been effective since March 1, 2026. The law allows investors to contribute capital and purchase shares or stakes in economic organizations, while also providing specific rules for investment project transfers and project termination.

Therefore, foreign investors should determine the appropriate divestment structure before completing any transaction.

I. What Is Foreign Investment Divestment Vietnam?

1.1 Understanding Foreign Investment Divestment

Foreign Investment Divestment Vietnam generally means that a foreign investor reduces or exits its ownership or investment in Vietnam. The investor may sell part of its investment or completely withdraw from the Vietnamese business.

Divestment can take several forms, including:

• Selling shares in a Vietnamese joint stock company
• Transferring capital contributions in a limited liability company
• Selling all or part of an ownership interest
• Transferring an investment project
• Selling assets connected with an investment project
• Terminating an investment project
• Dissolving a Vietnamese company

The correct option depends on what the investor owns and what it wants to achieve after the transaction.

For example, if a foreign company owns 100% of a Vietnamese subsidiary and sells all shares to another investor, the Vietnamese company may continue operating. The foreign investor has exited, but the company itself has not been dissolved.

By contrast, if there is no buyer and the investor wants to completely close the Vietnamese operation, project termination and company dissolution may be required.

1.2 Partial and Full Divestment

Foreign investors can generally consider either partial or full divestment.

A partial divestment occurs when the investor sells only part of its ownership. For example, an investor holding 80% of a Vietnamese company may sell 30% while retaining the remaining 50%.

A full divestment occurs when the investor transfers its entire ownership interest and no longer has an investment in the company.

Therefore, before starting the procedure, investors should clearly determine:

• Current ownership percentage
• Percentage to be transferred
• Remaining ownership after the transaction
• Identity of the new investor
• Whether the company will remain foreign-invested
• Whether the investment project will continue

This information helps determine the appropriate legal and investment procedures.

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II. Common Forms of Foreign Investment Divestment Vietnam

2.1 Divestment Through Share or Capital Transfer

Selling shares or capital contributions is one of the most common divestment methods.

For example, a foreign investor may sell its shares to another foreign company. Alternatively, it may sell the shares to a Vietnamese investor.

The transaction should be reviewed carefully because foreign investment rules can apply to the buyer. Under the current Law on Investment, foreign investors purchasing shares or stakes must comply with applicable market access conditions, national defense and security requirements, and relevant land law requirements.

Therefore, the transaction should be reviewed from both the seller’s and buyer’s perspectives.

Important matters include:

• Foreign ownership limits
• Business sectors of the target company
• Investment registration requirements
• Share transfer restrictions
• Tax obligations
• Payment arrangements

2.2 Divestment Through Investment Project Transfer

Another option is to transfer all or part of an investment project to another investor.

The Law on Investment 2025 allows an investor to transfer all or part of an investment project if specific conditions are satisfied. These include requirements relating to project status, foreign investor conditions, land and real estate laws, and the conditions stated in the investment approval or Investment Registration Certificate.

This method can be useful for large projects where the project itself has significant value.

Examples include:

• Manufacturing projects
• Real estate projects
• Technology projects
• Infrastructure projects
• Large commercial projects

For projects that have an Investment Registration Certificate or an approved investor, the transfer generally requires an investment project adjustment procedure.

2.3 Divestment Through Company Dissolution

If the foreign investor wants to completely stop its Vietnamese business and there is no buyer, company dissolution may be appropriate.

However, dissolution should normally be considered after reviewing all outstanding obligations.

The company may need to deal with:

• Tax liabilities
• Employee salaries and benefits
• Social insurance
• Supplier debts
• Bank loans
• Contracts
• Company assets
• Investment project status

Therefore, dissolution is generally a more comprehensive exit process than a simple ownership transfer.

III. Conditions for Foreign Investment Divestment Vietnam

3.1 Review the Buyer’s Eligibility

When divestment takes place through a sale to another foreign investor, the buyer must satisfy the applicable foreign investment conditions.

This is particularly important when the target company operates in a business sector with conditional market access.

The parties should therefore check:

• Registered business lines
• Foreign ownership limits
• Market access conditions
• Required licenses
• National defense and security considerations
• Land-related restrictions

The current investment law specifically requires foreign investors purchasing shares or stakes to satisfy market access conditions and other applicable requirements.

3.2 Determine Whether Prior Registration Is Required

A share or capital transfer may require registration before the company changes its shareholders or members.

For example, registration is required in certain cases where the transaction increases foreign ownership in a business sector with conditional market access.

It may also be required where the transaction causes foreign investors to hold more than 50% of the charter capital in the circumstances specified by the law.

Therefore, even though the transaction is technically a divestment by the seller, the buyer’s investment status can affect the procedure.

3.3 Review Investment Project Conditions

If the divestment involves an investment project rather than only shares, additional conditions may apply.

Under Article 34 of the Law on Investment 2025, the project being transferred must not fall into certain cases requiring termination. In addition, the transferee must satisfy applicable foreign investor conditions, land and real estate requirements, and the conditions stated in the investment approval or Investment Registration Certificate.

Therefore, project due diligence should be completed before signing the final transfer agreement.

IV. Procedure for Foreign Investment Divestment Vietnam

4.1 Step 1: Review the Investment and Ownership Structure

The first step is to review the investor’s current position in Vietnam.

The investor should identify:

• Legal entity holding the investment
• Type of investment
• Current ownership percentage
• Investment capital
• Investment Registration Certificate, if applicable
• Investment project status
• Existing shareholders or members
• Company assets and liabilities

This review helps determine whether the investor should use a share transfer, capital transfer, project transfer, or termination procedure.

4.2 Step 2: Conduct Legal and Tax Due Diligence

Before completing the transaction, the investor should review the company’s legal and financial position.

A proper review should cover:

• Tax compliance
• Accounting records
• Outstanding tax liabilities
• Related-party transactions
• Loans
• Employee obligations
• Contracts
• Fixed assets
• Land and property
• Investment capital contribution

This step is especially important for long-running FDI companies.

A tax or accounting issue discovered after the transaction may create unexpected costs for the seller or buyer.

4.3 Step 3: Prepare the Divestment Agreement

If the investor sells shares or capital, the parties should prepare a clear transfer agreement.

The agreement should normally cover:

• Buyer and seller information
• Number of shares or amount of capital transferred
• Transfer price
• Payment method
• Completion conditions
• Tax responsibilities
• Required approvals
• Representations and warranties
• Closing date
• Responsibilities after completion

The agreement should also be consistent with the investment and corporate registration procedures.

4.4 Step 4: Complete Investment and Corporate Procedures

After determining the correct structure, the parties should complete the required registration and corporate procedures.

Depending on the transaction, this may include:

• Registration of capital contribution or share purchase
• Adjustment of the Investment Registration Certificate
• Change of shareholders
• Change of company members
• Amendment of the company charter
• Investment project transfer procedures
• Project termination procedures

The Law on Investment 2025 provides that projects with an approved investor or an Investment Registration Certificate follow the investment project adjustment procedure when transferred.

Therefore, the exact sequence depends on the type of divestment.

V. Tax, Accounting, and Repatriation Issues

5.1 Tax on Divestment

Tax is one of the most important considerations in Foreign Investment Divestment Vietnam.

A sale of shares or capital contributions may generate tax obligations for the seller. The applicable treatment depends on factors such as the type of seller, transaction structure, transfer value, investment cost, and applicable Vietnamese tax rules.

Therefore, investors should calculate potential tax liabilities before agreeing on the final transaction price.

Supporting documents should also be maintained for:

• Original investment cost
• Capital contributions
• Transfer price
• Transaction expenses
• Payment records
• Tax declarations
• Tax payments

This documentation can be important during tax reviews.

5.2 Accounting and Financial Settlement

The company’s accounting records should also be reviewed before the investor exits.

The investor should confirm that the company’s books accurately reflect:

• Contributed capital
• Loans
• Receivables
• Payables
• Fixed assets
• Inventory
• Accrued expenses
• Tax liabilities

If the company is being dissolved, a more comprehensive accounting and tax settlement may be required.

Therefore, accounting should be addressed before the final closing date rather than after the investor has already exited.

5.3 Repatriation of Investment Proceeds

After completing the divestment, the foreign investor may want to transfer the remaining proceeds abroad.

The Law on Investment 2025 provides that foreign investors may transfer investment capital and proceeds from investment abroad after fulfilling their financial obligations to the State of Vietnam.

Therefore, investors should maintain clear evidence of the source of funds.

This may include:

• Share transfer agreement
• Capital transfer documents
• Tax payment evidence
• Bank statements
• Corporate approvals
• Investment registration documents

The payment and banking structure should also be reviewed before funds are transferred.

VI. Important Considerations for Foreign Investors

6.1 Choose the Right Exit Structure

The most important decision is choosing the correct divestment structure.

A share transfer may be suitable when another investor wants to acquire the company. A project transfer may be more appropriate when the investment project itself is the main asset. Meanwhile, dissolution may be appropriate when the investor wants to permanently close the Vietnamese operation.

Therefore, investors should compare the available options before signing any binding transaction documents.

6.2 Check Land and Real Estate Issues

Land can significantly affect a divestment transaction.

If the company owns or uses land, investors should review:

• Land use rights
• Land lease arrangements
• Land-related financial obligations
• Buildings and factories
• Land-related restrictions
• Conditions for transferring project assets

The current investment law specifically requires compliance with land law and, where relevant, housing and real estate business laws when an investment project is transferred.

Therefore, land due diligence should be part of the divestment process.

6.3 Complete All Obligations Before the Final Exit

Foreign investors should avoid leaving unresolved obligations after transferring their investment.

Before completing the exit, the investor should review:

• Tax obligations
• Employee obligations
• Corporate records
• Investment reporting
• Bank accounts
• Contracts
• Loans
• Asset ownership
• Investment capital records

A complete exit plan should therefore coordinate legal, tax, accounting, corporate, and banking procedures.

6.4 Prepare the Divestment Plan Early

A well-planned Foreign Investment Divestment Vietnam process can reduce delays and unexpected costs.

A practical plan should include:

• Investment structure review
• Foreign ownership analysis
• Legal due diligence
• Tax health check
• Accounting review
• Asset and land review
• Buyer due diligence
• Transfer agreement
• Investment registration
• Corporate registration
• Tax settlement
• Payment and repatriation

The earlier these matters are reviewed, the easier it is to identify potential problems before the transaction reaches the closing stage.

VII. Conclusion

Foreign Investment Divestment Vietnam involves more than simply selling an investment. Depending on the circumstances, a foreign investor may exit through a share or capital transfer, investment project transfer, project termination, or company dissolution.

Vietnam’s Law on Investment 2025, effective from March 1, 2026, provides the current legal framework for capital contribution, share and stake purchases, investment project transfers, and project termination. The law also establishes conditions that foreign investors must satisfy when acquiring shares or investment projects.

Therefore, foreign investors should first identify the most suitable exit structure. Next, they should review foreign investment conditions, tax liabilities, accounting records, assets, land rights, and corporate obligations. Finally, they should complete the relevant investment, corporate, tax, and banking procedures before repatriating investment proceeds.

With proper preparation, Foreign Investment Divestment Vietnam can be completed in a structured and efficient manner while helping foreign investors reduce tax, legal, and compliance risks during their exit from the Vietnamese market.

MVA VIETNAM ACCOUNTING AND AUDITING COMPANY LIMITED