VPL provides comprehensive advisory and procedural services for capital transfers, ensuring legality, transparency, and efficiency. Capital transfer is a strategic solution for restructuring ownership, changing business models, or conducting M&A activities, requiring in-depth knowledge of corporate, tax, labor, and other relevant laws.
With over 10 years of experience, VPL is committed to supporting clients from legal due diligence to completion of procedures, minimizing risks and optimizing benefits. We take pride in being a trusted legal partner for businesses in Ho Chi Minh City and nationwide.
Conditions for capital transfer
For a single-member limited liability company
The owner has full authority to carry out procedures to transfer part or all of the capital contribution to another individual or organization.
For a multi-member limited liability company
Pursuant to Article 52 of the Law on Enterprises 2020, as amended and supplemented in 2025, a member wishing to transfer their capital contribution must first offer it to the remaining members in proportion to their respective capital contributions in the company and under the same conditions.
Only if the remaining members do not purchase or do not fully purchase it within 30 days from the offer date may the member transfer their capital contribution to a non-member, provided that the transfer conditions are not more favorable than those offered to the remaining members.
For a joint-stock company
Pursuant to Article 127 of the Law on Enterprises 2020, shares are freely transferable, except for ordinary shares held by founding shareholders and cases where the company’s Charter restricts the transfer of shares.
Within 03 years from the date on which the company is issued its Enterprise Registration Certificate, founding shareholders may freely transfer their ordinary shares to other founding shareholders but may only transfer them to non-founding shareholders if approved by the General Meeting of Shareholders.
Certain risks and considerations in capital transfer
Legal aspects
- Non-compliance with the company’s Charter: Failure to comply with provisions on pre-emptive rights or transfer restrictions may render the capital transfer transaction invalid.
- Lack of required approvals: In a multi-member limited liability company (offering to other members) or a joint-stock company (approval for founding shareholders within the first three years), failure to obtain the necessary approvals may result in the transfer being invalid.
- Misrepresentation of ownership: If the transferor is not the lawful owner or is restricted from transferring, the entire transfer will be invalid, potentially leading to legal disputes and significant damages.
Managerial and operational aspects
- Loss of control or influence: The transferor may lose control or significant influence in the company if too many capital contributions/shares are transferred.
- Internal disruption: Changes in members/major shareholders may lead to conflicts within the management, adversely affecting the company’s business operations.
- Lack of information about the counterparty: If the transferee fails to thoroughly review the history, reputation, or capacity of the company and its existing members/shareholders, difficulties may arise in future cooperation.
- Failure to update the Register of Members/Shareholders: Failure to update, or incorrect updating of, ownership information in the company’s records may hinder the verification of ownership and the exercise of ownership rights.
Financial and tax aspects
- Inaccurate valuation: If the value of the capital contribution/shares is not properly assessed, one party may suffer losses due to a transfer not reflecting the actual market value.
- Undisclosed debts and potential disputes: The transferee may be unaware of outstanding debts, financial obligations, or potential legal disputes of the company associated with the transferred capital contribution/shares, resulting in unexpected liabilities.
- Tax evasion: Parties may deliberately misreport the transfer value to evade personal or corporate income tax, exposing themselves to risks of tax arrears, administrative fines, or even criminal liability.
- Failure to fulfill tax obligations: Failure to declare and pay taxes on time or in accordance with regulations may result in late payment penalties and other sanctions.
- Non-compliant payment: Payments made in violation of regulations, particularly cash payments or payments not made through the capital account during a capital transfer, pose serious tax risks, including administrative penalties and the inability to substantiate the transaction.
Benefits of using VPL’s capital transfer advisory services
Maximum risk mitigation
With extensive experience in capital transfers, VPL’s lawyers advise on the most suitable transaction structures for each specific case, helping clients avoid potential risks and safeguard their best interests.
Comprehensive legal due diligence
VPL’s lawyers thoroughly review the company’s Charter, legal status, corporate documents, contracts, tax obligations, and financial position to ensure clients have a clear understanding of all critical information before making decisions.
Accurate and efficient legal procedures
VPL assists and represents clients in carrying out all capital transfer procedures in full compliance with the law. Transactions are completed swiftly and accurately, saving clients both time and effort.
Professional end-to-end process
VPL applies a systematic and well-structured workflow, giving clients peace of mind from the very first step until the transaction is completed. Every stage is tightly managed to ensure maximum efficiency and accuracy.
Secure and transparent transfer agreements
With a team of experienced lawyers, VPL negotiates and drafts clear, well-structured capital transfer agreements, ensuring the highest legal enforceability and minimizing risks for clients.
Optimization of financial and tax benefits
Beyond legal compliance, VPL provides tailored solutions to optimize tax obligations and secure legitimate financial benefits for clients during the capital transfer process.
Scope of services provided by VPL
VPL’s comprehensive capital transfer services are designed to assist clients at every stage, ensuring smooth and efficient transactions. We provide the following services:
In-depth review: Conduct a thorough examination of the company’s legal status, financial situation, and all relevant corporate records related to the transferred capital.
Advising optimal solutions: Recommend and advise on the most suitable transfer options tailored to clients’ needs, including whether to sell all or part of the capital, the form of transfer (shares or capital contributions), and the implementation process (with or without approval of the Members’ Council/General Meeting of Shareholders).
Comprehensive document drafting: Prepare all required documents, including the capital transfer agreement, meeting minutes, resolutions, amended Charter, and change registration forms in accordance with the law.
Procedure Representation: On your behalf, we submit the documents and liaise directly with the Department of Finance at the company’s registered office and the tax authorities, ensuring that all administrative procedures are completed promptly and accurately.
Post-transaction support: Assist in updating information with banks and relevant authorities, if required.
Post-transaction advisory: Providing consultation and assistance in resolving issues arising after the completion of the transaction, including internal disputes or capital transfer tax obligations.
Frequently asked questions
What documents are required when carrying out procedures for changing members in a limited liability company?
Pursuant to Clause 2, Article 45 of Decree No. 168/2025/ND-CP, in case of member change due to transfer of capital contribution, the application dossier shall include the following documents:
a) Application for registration of changes to enterprise registration contents;
b) List of members of the multi-member limited liability company;
c) Capital transfer agreement or documents evidencing completion of the transfer;
d) Copy of the legal documents of the organization and copy of the authorization document appointing its authorized representative in case the new member is an organization;
đ) Copy of the approval document from the investment registration authority regarding the capital contribution, share purchase, or capital contribution purchase by a foreign investor or an economic organization with foreign investment capital, in cases where procedures for registration of such capital contribution or purchase are required under the Law on Investment.
What documents are required when carrying out procedures for changing the owner of a company?
Pursuant to Clause 1, Article 46 of Decree No. 168/2025/ND-CP, in case the company owner transfers the entire charter capital to an individual or an organization, the transferee must submit an application dossier for registration of changes to enterprise registration content to the provincial business registration authority where the company’s head office is located. The dossier shall include the following documents:
a) An application for registration of a change of owner of a one-member limited liability company, signed by the former owner who is an individual or by the legal representative of the former owner if it is an organization, and by the new owner who is an individual or by the legal representative of the new owner if it is an organization.
b) A copy of the organization’s legal documents and a copy of the letter on appointment of authorized representative in the event that the transferee is an organization.
For a foreign organizational owner, the copy of the organization’s legal documents must be consular legalized;
c) The capital transfer agreement or documents evidencing completion of the transfer;
d) A copy of the approval document from the investment registration authority regarding capital contribution, share purchase, or capital contribution purchase by a foreign investor or an economic organization with foreign investment capital, in cases where registration procedures are required under the Law on Investment.
In case the owner of a single-member limited liability company transfers only part of the capital contribution, the procedures for conversion of the enterprise type must be carried out.
Is notarization required for a capital transfer agreement?
For a capital transfer agreement, the law does not require notarization or certification. This means the agreement remains legally valid if it is made in writing and signed by the relevant parties.
How long does it take to complete a capital transfer transaction?
The time required to complete a capital transfer transaction depends on various factors, including legal due diligence, negotiations, preparation of complete documentation, coordination among the parties, and the processing time of the competent state authorities. Typically, the transaction takes about 30–50 working days to complete.
How is the payment for capital transfer in foreign-invested enterprises carried out?
Pursuant to Article 10 of Circular No. 06/2019/TT-NHNN, the payment for the transfer of shares or capital contributions in foreign-invested enterprises shall be made as follows:
a) Between non-resident investors, or between resident investors, the payment shall not be made through the direct investment capital account;
b) Between a non-resident investor and a resident investor, the payment must be made through the direct investment capital account.
What taxes are applicable to capital transfer?
If the transferor is an individual, income from the transfer of capital contribution is subject to personal income tax (PIT) at a rate of 20% on the taxable income derived from such transfer. In the case of share transfer, a tax rate of 0.1% on the transfer price applies.
If the transferor is an organization, income generated from the capital transfer will be treated as other income of the enterprise and subject to corporate income tax (CIT) at a rate of 20%.
Who is responsible for tax declaration and payment in a capital transfer transaction?
The obligation to declare and pay taxes arising from a capital transfer rests with the transferor, whether an individual or an organization. For individuals, this relates to personal income tax (PIT); for organizations, it relates to corporate income tax (CIT). While the parties may agree on assistance or payment on behalf of the transferor, the legal responsibility ultimately remains with the transferor.
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