Tiếng ViệtVietnam LLC ownership transfer (also known as capital contribution transfer) is a common yet complex transaction, especially for foreign investors in 2025. Unlike share transfers in joint-stock companies, transferring capital in a limited liability company (LLC) is subject to stricter legal procedures, preemptive rights, registration requirements, and tax obligations.
For foreign investors, this process directly impacts ownership control, voting rights, and compliance with Vietnamese business law. Any mistake – such as overlooking preemptive rights or failing to update registration – can lead to invalid transfers, shareholder disputes, or tax penalties.
At Lexconsult & Partners, we provide an in-depth legal analysis covering procedures, conditions, tax considerations, and compliance risks to help ensure your capital transfer is both lawful and strategically secure in Vietnam.
1. Legal framework for transfer of capital contribution in Vietnam
The transfer of capital contributions in a limited liability company (LLC) is primarily governed by the following legal instruments:
– The Law on Enterprises 2020, specifically:
Article 51: Rights of Members
Article 52: Procedures for Transferring Capital Contributions
Article 53: Handling of Capital Contributions in Special Circumstances;
– The Civil Code 2015 (with respect to ownership rights, obligations, and inheritance);
– Decree No. 168/2025/ND-CP on enterprise registration;
– The Company Charter – an internal legal document that must be consulted as it may provide more specific conditions regarding the form, procedures, and approval requirements for transfers.
2. Conditions and Restrictions on Vietnam LLC Ownership Transfer (2025)
Before carrying out the transfer of capital contributions in an LLC, it is essential to determine whether the transferee is a Vietnamese or a foreign individual or entity. Additionally, the conditions for such transfers will vary depending on whether the company is a single-member LLC or a multi-member LLC. Details are as follows:
2.1. Single-member LLC ownership transfer
If the sole owner of a single-member LLC intends to transfer their capital contribution to another party, two scenarios may occur:
– Partial transfer: If the sole owner transfers part of their capital contribution to another individual or organization, the company will then have more than one owner. In this case, the company must proceed with a conversion of enterprise type into a multi-member LLC or a joint-stock company.
– Entire transfer: If the sole owner transfers all of their capital contribution to another individual or organization, the company must carry out the procedures for changing the owner.
2.2. Multi-member LLC ownership transfer & preemptive rights
In a multi-member LLC, the transfer of capital contributions may result in one of two outcomes:
– No impact on the number of members: If the number of members after the transfer remains at two or more, the company only needs to file a notice of changes regarding the list of capital-contributing members and their respective capital ratios.
– Reduction to a single member: If the transfer results in the company having only one member, it must convert into a single-member LLC and carry out enterprise conversion registration with the Business Registration Office – Department of Finance at the company’s head office within 15 days of completing the transfer.
Members of a multi-member LLC are entitled to transfer their capital contributions, but the following conditions must be observed:
– Priority right of existing members: The transferor must first offer the capital contribution to the remaining members in proportion to their ownership percentages and under the same conditions (Point a, Clause 1, Article 52 of the Law on Enterprises 2020). This mechanism helps maintain internal stability and protect the preemptive rights of existing members.
– Transfer to non-members is only permitted if the existing members do not purchase or do not fully purchase the offered contribution within 30 days from the date of offer (Clause 3 and Clause 4, Article 51 of the Law on Enterprises 2020).
If the company refuses to repurchase the contribution, the transferring member has the right to transfer it to another member or an external party.
Gift of capital contributions: If a member donates part or all of their capital contribution to another person:
– If the recipient is a spouse, child, parent, or other relative within the third degree of inheritance, they will become a member of the company.
– If the recipient is an unrelated person, they may only become a member with the approval of the Members’ Council.
Using capital contributions to settle debts: If a member uses their capital contribution to settle a debt:
– The recipient may become a member if approved by the Members’ Council; or
– The contribution may be offered and transferred in accordance with the legal procedures for capital transfers as set forth in the Law on Enterprises.
2.3. Restrictions for foreign investors
Certain industries in Vietnam are subject to market access restrictions (banking, education, logistics, media, etc.). Foreign investors must:
– Ensure the target LLC’s business lines are open to foreign investment.
– Comply with sector-specific ownership caps and licensing requirements.
Note: Always conduct legal due diligence before agreeing to buy into an LLC. For details on market entry strategy, see how to set up an FDI company in Vietnam.
3. Step-by-step procedure for transfer of capital contribution in Vietnam LLCs
The process of transferring capital contributions in an LLC generally includes the following steps:
Preparation and drafting of transfer documents:
– Notification of changes in enterprise registration content;
– Decision of the company owner (for single-member LLCs);
– Minutes of meeting and resolution of the Members’ Council regarding the transfer, along with the updated list of members (for multi-member LLCs);
– Capital contribution transfer agreement;
– Minutes of liquidation/proof of completed transfer;
– Certified copy of the valid ID/passport of the transferee;
– Company Charter (if specific transfer provisions apply);
– Power of attorney (if any).
Submission of application: The application shall be submitted to the Business Registration Office where the company’s head office is located.
Processing time: Results are typically issued within 3–5 working days from the date of submission.
Note: The company must also update the information of the transferee in the register of members in accordance with Clause 2, Article 52 of the Law on Enterprises 2020.
In certain cases, the process also requires entity conversion. For a practical roadmap, refer to our article on changing business entity type in Vietnam.
4. Tax and legal considerations when transferring capital contributions in Vietnam
Transferring capital contributions in an LLC is not a simple contractual act. It must comply with both statutory law and the company’s charter, while also addressing tax and compliance issues that are particularly relevant to foreign investors.
4.1. Compliance with the Company Charter and Preemptive Rights
According to Article 52 of the Law on Enterprises 2020, a member of a multi-member LLC must first offer their stake to existing members on equal terms. Only if other members refuse or do not fully purchase within 30 days may the contribution be transferred to an outsider.
Risk: A transfer that ignores preemptive rights can be deemed invalid or rejected by the Business Registration Office.
4.2. Tax obligations in capital contribution transfers
Vietnamese tax law treats capital contribution transfers as taxable transactions:
– Personal Income Tax (PIT)/Capital Gains Tax: Applied when the transferor is an individual (resident or non-resident).
– Corporate Income Tax (CIT): Applied when the transferor is a company or corporate entity.
– Valuation Requirements: Transfer price must reflect fair market value; under-reporting may trigger audits or tax penalties.
Note for foreign investors: Cross-border transfers may also require compliance with foreign exchange control rules under the Law on Investment and SBV regulations.
4.3. Transfers take effect only upon member register update
Clause 2, Article 52 of the Law on Enterprises 2020 states that a transfer only becomes legally effective after the transferee’s information is updated in the company’s official member register and filed with the Business Registration Office.
Implication: Even if the transfer contract is signed and money is paid, legal rights and obligations remain with the transferor until the update is officially recorded.
4.4. Special cases of capital contribution transfers
Not all ownership changes arise from purchase-and-sale transactions. Common special cases include:
– Inheritance: Heirs may inherit capital contributions under the Civil Code; the company may have to buy back if heirs cannot become members.
– Gifting: Valid for close relatives (spouse, parents, children); gifts to unrelated parties usually require Members’ Council approval.
– Debt Settlement: Members may use capital contributions to settle obligations, but such transfers must still follow LLC procedures and registration.
See more in our article on inheritance without a will: legal provisions & dispute resolution.
4.5. Legal capacity restrictions on transferors and transferees
Vietnamese law prohibits certain individuals from being involved in capital transfers, including:
– Persons with restricted or lost legal capacity.
– Persons under criminal prosecution or serving a prison sentence.
– Individuals banned from business management by court decision.
In such cases, transfers must be made through a legal representative in accordance with the Civil Code.
5. Legal advice and strategic recommendations for foreign investors
The transfer of capital contributions in Vietnam LLCs is not only a statutory right of members but also a strategic mechanism for restructuring ownership, attracting new investors, or facilitating M&A transactions. However, because it directly affects corporate governance, ownership structure, and investment control, it is strictly regulated under the Law on Enterprises, the Civil Code, and the company charter.
To minimize risks and ensure compliance, Lexconsult & Partners recommends that businesses and foreign investors take the following steps:
– Review the Company Charter carefully: The charter may impose stricter requirements than the Law on Enterprises, including prior approval of new members, voting thresholds, or extended offering periods.
– Comply with statutory requirements: Adhere closely to Articles 51–53 of the Law on Enterprises regarding buyback rights, transfer procedures, and special cases (inheritance, gifting, debt settlement).
– Prepare complete documentation: Ensure all transfer agreements, Members’ Council resolutions, and enterprise registration notices are accurate and properly executed. Incomplete filings can invalidate the transfer.
– Clarify transfer price and tax obligations: Define the price transparently to avoid disputes and comply with Vietnamese tax obligations (PIT/CIT, transfer pricing rules).
– Seek legal and tax advisory support: Especially in complex scenarios such as transfers to foreign entities, cross-border restructuring, or acquisitions in conditional sectors. Professional advice reduces the risk of invalidation or regulatory penalties.
In practice, many capital contribution transfers that appear “completed” are later suspended or challenged due to procedural errors, failure to register, or unclear valuation terms. Proactive preparation, legal due diligence, and consultation with a corporate lawyer are essential to ensure both compliance and investment security.
Transferring capital contributions in a Vietnam LLC is more than a compliance requirement – it is a strategic decision that impacts ownership, governance, and long-term growth. To ensure your transaction is lawful, tax-efficient, and aligned with investment goals, foreign investors should work with experienced legal advisors. For a holistic approach integrating legal and financial perspectives, explore our 360-degree advisory for businesses.
Lexconsult & Partners specializes in Vietnam LLC ownership transfers, foreign direct investment (FDI) compliance, and corporate restructuring. Our team provides tailored legal solutions covering due diligence, documentation, regulatory filings, and tax compliance – helping investors avoid costly mistakes and secure smooth transactions.
📩 Contact us today for a consultation on capital contribution transfer in Vietnam and receive expert guidance on every step of your investment journey.
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