Company Merger Procedures in Vietnam: Detailed Guidance
In the current landscape of business development and expansion in Vietnam, company merger stands out as a significant strategy for enterprises seeking to enhance market strength, leverage economies of scale, and optimize resources. So, what are the most up-to-date regulations in Vietnamese law regarding company merger procedures as of today? This article by DB Legal will provide a detailed and comprehensive overview of the legal aspects related to company mergers in Vietnam.
Table of contents:
I. What is a company merger?
Based on the provisions of Clause 1, Article 200 of the Law on Enterprises No. 59/2020/QH14 dated June 17, 2020:
"1. One or several companies (hereinafter referred to as the merging company) may merge into another company (hereinafter referred to as the receiving company) by transferring all assets, rights, obligations and
Thus, a company merger is the process by which one or more existing companies (the merged company) transfer all of their assets, rights, obligations, and legitimate interests to another existing company (the receiving company). After the merger process is completed, the merged company will cease to legally exist.
II. Detailed Procedures for Company Merger in Vietnam
The procedures for merging limited liability companies and joint-stock companies are carried out in the following steps:
a) Preparing the merger contract and the draft charter of the receiving company:
Merger contract: The relevant companies (the receiving company and the merged company/companies) must prepare a written merger contract.
This contract needs to include the following main contents:
- Name and head office address of the receiving company.
- Name and head office address of the merged company/companies.
- Merger procedures and conditions: Detailed regulations on the implementation steps, timeline, and prerequisites for completing the merger process.
- Labor utilization plan: Proposed plan for the continued employment, retraining, or settlement of benefits for the employees of the merged company/companies.
- Methods, procedures, deadlines, and conditions for asset transfer: the time and method of transferring ownership of assets from the merged company/companies to the receiving company.
- Methods, procedures, deadlines, and conditions for the conversion of contributed capital, shares, bonds: Regulations on the method of converting the contributed capital of members of the limited liability company, shares of shareholders of the joint-stock company, and bonds of the merged company into corresponding contributed capital, shares, and bonds of the receiving company.
- Merger implementation deadline: the expected completion time of the merger process.
- Draft charter of the receiving company: The receiving company may retain its current charter or amend and supplement it to suit the new situation after the merger.
b) Adoption of the merger contract and the charter of the receiving company:
- The members, company owners (for limited liability companies), or shareholders (for joint-stock companies) of each relevant company (both the receiving company and the merged company/companies) must hold a meeting to approve the merger contract and the charter of the receiving company (if there are any amendments or supplements). The approval process must comply with the provisions of the Law on Enterprises and the charter of each company.
- Notification to creditors and employees: The approved merger contract must be sent to all known creditors of each relevant company and announced to all employees of these companies within 15 days from the date of approval.
c) Enterprise registration for the receiving company:
- After completing the above steps, the receiving company (or its legal representative) proceeds to submit the dossier for registration of changes (due to merger) to the competent business registration authority in accordance with the Law on Enterprises.
- The dossier for registration of changes due to merger of the receiving company must include:
- Request for registration of changes in enterprise registration information (according to the form).
- The merger contract approved by the relevant companies.
- The decision of the company owner, the resolution of the Members' Council, the resolution of the General Meeting of Shareholders of the relevant companies on the company merger.
- Valid copies of the minutes of the Members' Council meeting, the General Meeting of Shareholders of the relevant companies on the approval of the merger contract.
- The charter of the receiving company (amended or supplemented version, if any).
- List of members/shareholders of the receiving company after the merger (if there are significant changes).
- Other documents as prescribed by law.
d) Compliance with the Law on Competition:
Companies implementing a merger must ensure compliance with the provisions of the Law on Competition regarding company mergers, especially the regulations on economic concentration thresholds to avoid unfair competition practices or adverse effects on the market. In some cases, the merger may need to be notified to or approved by the competition management agency before implementation.
III. Legal Consequences of Company Merger
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Termination of existence of the merged company: After the receiving company successfully registers the enterprise change, the merged company/companies will simultaneously cease to legally exist.
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Inheritance of all rights and obligations: The receiving company enjoys all the legitimate rights and interests and is responsible for all obligations, outstanding debts, labor contracts, and other property obligations of the merged company/companies according to the merger contract.
- Automatic inheritance: The receiving company automatically inherits all rights, obligations, and legitimate interests of the merged company/companies according to the merger contract.
IV. Issues to Note When Merging Companies
- Legal Due Diligence: It is necessary to conduct thorough legal due diligence on the merged company/companies to assess risks and opportunities, especially issues related to legal, financial, tax, and labor matters.
- Financial and Accounting Assessment: Analyze the financial situation, debts, assets, and accounting issues of the merging companies to ensure smooth post-merger integration.
- Personnel Restructuring Plan: Develop a detailed plan for arranging, retraining, or settling benefits for the employees of the merged company to ensure stability and efficiency after the merger.
- System and Process Integration: Plan the integration of management systems, operating procedures, and information technology of the companies to create a smoothly operating organization.
- Corporate Culture: Consider the differences in corporate culture between the companies and build a suitable common culture for the post-merger company.
- Tax Issues: It is necessary to carefully analyze the tax obligations and tax benefits that may arise from the merger transaction, including corporate income tax, value-added tax, and other taxes and fees.
- Administrative Procedures: The merger process involves many administrative procedures at various state agencies (business registration, tax, social insurance, etc.), requiring careful preparation and close coordination.
- Legal Risks: It is necessary to identify and assess potential legal risks related to contracts, assets, labor, and other legal issues of the merging companies.
- Compliance with the Law on Competition: Ensure that the merger transaction complies with the provisions of the Law on Competition, especially regarding economic concentration thresholds and prohibited competitive acts.
V. Advisory Services of DB Legal
DB Legal, with our team of experienced lawyers possessing in-depth knowledge of corporate law and M&A in Vietnam is proud to offer comprehensive legal advisory services to support your company merger process. We are committed to:
- Advising on the optimal merger transaction structure that aligns with your business's strategic objectives in today's Vietnamese market.
- Conducting comprehensive legal due diligence on the companies involved in the merger..
- Drafting and preparing all necessary legal documents for the merger process, compliant with the latest 2025 regulations.
- Representing clients in working with and resolving legal issues with competent state authorities in Vietnam, including those specific to Da Nang.
- Providing up-to-date advice on issues related to labor, tax, finance, and post-merger integration, reflecting the current legal and economic landscape in Vietnam on May 11, 2025.
- Assisting in resolving any legal disputes that may arise during the merger process, leveraging our local expertise and nationwide.
If your company is looking to understand or carry out company merger procedures in Vietnam, please contact DB Legal immediately for detailed and professional advice tailored to the current legal environment. We are committed to accompanying you to ensure the merger process is smooth, efficient, and in compliance with all legal regulations here in Da Nang and across Vietnam.
The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.
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