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Select Topics
Relevant legislation and authorities
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  1. Is a merger control regulation in force?
  1. Which authorities enforce the merger control regulation?
  1. Relevant regulations and guidelines with links:
  1. Does general competition regulation apply to mergers or ancillary restrictions?
  1. May an authority order a split-up of a business irrespective of a merger?
  1. Other authorities that also require merger filing or may prohibit transaction
    (Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)
  1. Are any parts of the territory exempted or covered by particular regulation?
Voluntary or mandatory filing
show/hide chapter
  1. Is merger filing mandatory or voluntary?
Types of transactions to file – what constitutes a merger
show/hide chapter
  1. Is there a general definition of transactions subject to merger control?
  1. Is "change of control" of a business required?
  1. How is "control" defined?
  1. Acquisition of a minority interest
  1. Joint ventures/joint control – which transactions constitute mergers?
Thresholds that decide whether a merger notification must be filed
show/hide chapter
  1. Which thresholds decide whether a merger notification must be filed?
  1. Special thresholds for particular businesses
  1. Rules on calculation and geographical allocation of turnover
  1. Special rules on calculation of turnover for particular businesses
  1. Series of transactions that must be treated as one transaction
Exempted transactions and industries (no merger control even if thresholds ARE met)
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  1. Temporary change of control
  1. Special industries, owners or types of transactions
  1. Transactions involving only foreign businesses (foreign-to-foreign)
  1. No overlap of activities of the parties
  1. Other exemptions from notification duty even if thresholds ARE met?
Merger control even if thresholds are NOT met
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  1. May a merging party file voluntarily even if the thresholds are not exceeded?
  1. May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?
Referral to and from other authorities
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  1. Referral within the jurisdiction
  1. Referral from another jurisdiction
  1. Referral to another jurisdiction
  1. May the merging parties request or oppose a referral decision?
Filing requirements and fees
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  1. Stage of transaction when notification must be filed
  1. Pre-notification consultations
  1. Special rules for acquisitions on stock exchanges and public takeover bids
  1. Forms available for completing a notification
  1. Languages that may be applied in notifications and communication
  1. Documents that must be supplied with notification
  1. Filing fees
Implementation of merger before approval – "gun jumping" and "carve out"
show/hide chapter
  1. Is implementation of the merger before approval prohibited?
  1. May the parties get permission to implement before approval?
  1. Due diligence and other preparatory steps
  1. Veto rights before closing and “Ordinary course of business” clauses
  1. Implementation outside the jurisdiction before approval – "Carve out"
  1. Consequences of implementing without approval/permission
The process – phases and deadlines
show/hide chapter
  1. Phases and deadlines
Assessment and remedies/decisions
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  1. Tests or criteria applied when a merger is assessed
  1. May any non-competition issues be considered?
  1. Special tests or criteria applicable for joint ventures
  1. Decisions and remedies/commitments available
Publicity and access to the file
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  1. How and when will details about the merger be published?
  1. Access to the file for the merging parties and third parties
Judicial review
show/hide chapter
  1. Who can appeal and what may be appealed?

 
VIETNAM

Tran Xuan Chi Anh
Partner

anh.tran@rajahtannlct.com

Tel: +84 28 3821 2382

Logan Leung
Foreign Counsel

logan.leung@rajahtannlct.com

Tel: +84 28 3821 2382

Cao Dang Duy
Senior Associate

duy.cao@rajahtannlct.com

Tel: +84 24 3267 6127

Le Quynh Nhi
Associate

nhi.le@rajahtannlct.com

Tel: +84 28 3821 2382

New regulation proposed

The 2018 Law on Competition entered into force from 1 July 2019. However, the Decree regulating the functions, powers and organizational structure of the Vietnam Competition Commission has not been promulgated yet. This might lead to some issues in practice where the current competition authority i.e. the Vietnam Competition and Consumer Authority (VCCA) might not have the adequate structure and authorization to handle competition cases arising from the 2018 Law on Competition.

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. Merger control is addressed in Chapter V on economic concentration of the 2018 Law on Competition, effective from 1 July 2019.

2) Which authorities enforce the merger control regulation?

The Vietnam Competition Commission (“VCC”) will be established to enforce the Law on Competition including the merger regulation contained therein. However, the VCC has not been established yet, and in the transitional period until the VCC’s establishment, notification of merger cases must be sent to the Ministry of Industry and Trade (“MOIT”). The MOIT will accept the application dossier and then forward it to the Vietnam Competition and Consumer Authority (“VCCA”) ­­­— the competition authority established under the old version of the law, to evaluate. VCCA will evaluate the merger based on the 2018 Law on Competition and Decree 35/2020/ND-CP.

3) Relevant regulations and guidelines with links:

The merger regulation is addressed in Chapter IX of the Law on Enterprise and Chapter V of the Law on Competition. More detailed rules may be found in the implementing regulations such as Decrees and Circular, most of which are currently being drafted. Links to the relevant legislation, guidelines and forms are listed here:

Original Vietnamese version

Unofficial English translation

Luật Số. 23/2018/QH14 ban hành bởi Quốc hội ngày 12/06/2018 về Cạnh Tranh, có hiệu lực từ ngày 01/07/2019.

Law No. 23/2018/QH14 promulgated by the National Assembly dated 12 June 2018 on Competition, effective from 01 July 2019.

Translation into English not available.

Nghị định Số 75/2019/NĐ-CP của Chính Phủ ngày 26/09/2019 quy định về xử phạt vi phạm hành chính trong lĩnh vực cạnh tranh, có hiệu lực từ ngày 01/12/2019.

Decree No. 75/2019/ND-CP of the Government dated 26 September 2019 CP regulating administrative sanctions on violations of the Law on Competition, effective from 1 December 2019

Translation into English not available

Đơn TB-TKT về thông báo việc tập trung kinh tế (ban hành kèm theo Hướng dẫn thủ tục nộp hồ sơ thông báo tập trung kinh tế đến Bộ Công Thương ngày 14/05/2020)

(Dành cho các doanh nghiệp dự định tham gia tập trung kinh tế trong giai đoạn Ủy ban Cạnh tranh Quốc gia chưa được thành lập)

Form TB-TKT on notification of merger (attached to Guidance on notification procedures of merger cases to the Ministry of Industry and Trade dated 14 May 2020)

(This Guidance is for enterprises intending to merge during the transitional period before the establishment of the Vietnam Competition Commission)

Translation into English not available

Nghị định Số 35/2020/NĐ-CP của Chính Phủ ngày 24/03/2020 quy định chi tiết một số Điều của Luật Cạnh Tranh, có hiệu lực từ ngày 15/05/2020.

Decree No. 35/2020/ND-CP of the Government dated 24 March 2020 detailing a number of Articles of the Law on Competition, effective from 15 May 2020. 

Translation into English not available.

Dự thảo Nghị định quy định chức năng, quyền hạn và cơ cấu tổ chức của Ủy ban Cạnh tranh Quốc gia.

Draft Decree regulating the functions, powers and organizational structure of the Vietnam Competition Commission. 

Translation into English not available.

4) Does general competition regulation apply to mergers or ancillary restrictions?

Yes, mergers are covered by the Law on Competition. General competition regulation may apply to mergers and ancillary restrictions. 

5) May an authority order a split-up of a business irrespective of a merger?

Yes. It is possible for the Vietnam Competition Commission to request a split-up of a business irrespective of a merger.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Credit institutions 

Mergers between credit institutions (i.e. commercial banks and financial companies), even if they are cleared under the Law on Competition, require approval from the State Bank of Vietnam. The State Bank of Vietnam will also consult the People’s Committees’ opinions where the credit institutions are headquartered regarding the effects of the mergers. The State Bank will announce its approval or prohibit the transaction within sixty (60) days from the date of receipt of satisfactory application dossier. 

Securities companies 

Mergers between securities companies and investment management companies require approval from the State Securities Commission of Vietnam. The time limit for the approval or dismissal of the State Securities Commission is thirty (30) days from the date of receipt of satisfactory application dossier. The merger process has to also comply with the Law on Enterprise. 

7) Are any parts of the territory exempted or covered by particular regulation?

No.

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided the thresholds are met.

Types of transactions to file – what constitutes a merger

9) Is there a general definition of transactions subject to merger control?

Yes, according to Article 29 of the Law on Competition, the following transactions are subject to merger control (and herein all generally referred to as “mergers”):

  1. a merger means a transaction where one or several enterprises transfer all of its/their assets, rights, obligations and legitimate interests to another enterprise, and at the same time terminates its/their existence.
  2. a consolidation means a transaction where two or more enterprises transfer all of their assets, rights, obligations and legitimate interests to form a new enterprise and, at the same time, terminate the existence of the consolidating enterprises.
  3. an acquisition means a transaction where  an enterprise acquires all or part of the assets or shares of another enterprise sufficient to control or dominate one or all of the business operations of the acquired enterprise.
  4. A joint venture  means a transaction where two or more enterprises jointly contribute part of their assets, rights, obligations and legitimate interests to the establishment of a new enterprise.

10) Is "change of control" of a business required?

Yes. For acquisitions, “change of control” over a business is required.

11) How is “control” defined?

Decree No. 35, Article 2 stipulates that “control” is established in any of the following cases:

  1. Acquiring over 50% shares of capital;
  2. Acquiring ownership or right to use over 50% of assets in any business of the acquired enterprise; or
  3. Having any of the following rights: (i) directly or indirectly appoint or remove the majority of board members and executives of the acquired enterprise; (ii) decide any amendments to the company charter; or (iii) decide any important matters in the business of the acquired enterprise. 

12) Acquisition of a minority interest

If the acquisition of a minority interest does not lead to a change of control, such acquisition would not be considered a merger and will not be subject to merger regulation.

Also see topic 13 regarding joint ventures. 

13) Joint ventures/joint control – which transactions constitute mergers?

Any joint venture, regardless of whether there is joint control, must be notified to the Vietnam Competition Commission if it meets notification thresholds.

Thresholds that decide whether a merger notification must be filed

14) Which thresholds decide whether a merger notification must be filed?

a) Turnover thresholds

A merger must be notified if one of the merging parties has a total sales or purchase turnover of VND 3,000 billion or more in Vietnam in the latest fiscal year prior to the year when the transaction takes place. There is no guidance on the concept of “purchase turnover”. 

b) Market share thresholds

A merger notification must be filed if the combined market shares in Vietnam of the merging parties is 20% or more in the latest fiscal year prior to the year when the transaction takes place.

c) Value of transaction thresholds

A merger notification must be filed if the transaction is worth VND 1,000 billion or more. This threshold only applies to transactions involving a Vietnamese target.

d) Assets requirements

A merger notification must be filed if one of the merging parties has a total asset value of VND 3,000 billion in Vietnam in the latest fiscal year prior to the year when the transaction takes place.  

e) Other

N/A

15) Special thresholds for particular businesses

Special thresholds apply to insurance companies, securities companies and credit institutions.

Insurance:

A merger notification must be filed if

  1. Turnover: one of the merging parties has a total sales or purchase turnover of VND 10,000 billion or more in Vietnam in the latest fiscal year prior to the year when the transaction takes place; 
  2. Combined market share: the merging parties have a combined market share in Vietnam of 20% or more in the latest fiscal year prior to the year when the transaction takes place;
  3. Value of transaction: the transaction involves a Vietnamese target and has a value of VND 3,000 billion or more; or
  4. Assets: one of the merging parties has a total asset value of VND 15,000 billion or more in Vietnam in the latest fiscal year prior to the year when the transaction takes place.

Securities:

A merger notification must be filed if

  1. Turnover: one of the merging parties has a total sales or purchase turnover of VND 3,000 billion or more in Vietnam in the latest fiscal year prior to the year when the transaction takes place; 
  2. Combined market share: the merging parties have a combined market share in Vietnam of 20% or more in the latest fiscal year prior to the year when the transaction takes place;
  3. Value of transaction: the transaction involves a Vietnamese target and has a value of VND 3,000 billion or more; or
  4. Assets: one of the merging parties has a total asset value of VND 15,000 billion or more in Vietnam in the latest fiscal year prior to the year when the transaction takes place

Credit institutions:

A merger notification must be filed if

  1. Turnover: one of the merging parties has a total sales turnover in Vietnam of at least 20% of the total turnover of the credit institution system in the latest fiscal year prior to the year when the transaction takes place; 
  2. Combined market share: the merging parties have a combined market share in Vietnam of 20% or more in the latest fiscal year prior to the year when the transaction takes place;
  3. Value of transaction: the transaction involves a Vietnamese target and has a value of at least 20% of the total charter capital of the credit institution system: or
  4. Assets: one of the merging parties has a total asset value in Vietnam of at least 20% of the total assets of the credit institution system in the latest fiscal year prior to the year when the transaction takes place.

16) Rules on calculation and geographical allocation of turnover

There has been no guidance on calculation and geographical allocation of turnover for purposes of assessing the notification requirement. In general, turnover should be based on the most recent financial year audited report of the parties to the transaction. 

17) Special rules on calculation of turnover for particular businesses

There are no special rules on calculation of turnover for particular businesses.

18) Series of transactions that must be treated as one transaction

There are currently no regulations on series of transactions that must be treated as one transaction. 

Exempted transactions and industries (no merger control even if thresholds ARE met)

19) Temporary change of control

The Law on Competition does not differentiate between temporary change of control and lasting change of control. (Please also see topics 10 and 11). 

20) Special industries, owners or types of transactions

N/A

21) Transactions involving only foreign businesses (foreign-to-foreign)

N/A

22) No overlap of activities of the parties

N/A

23) Other exemptions from notification duty even if thresholds ARE met?

N/A

Merger control even if thresholds are NOT met

24) May a merging party file voluntarily even if the thresholds are not exceeded?

Yes, if they have a reason to do so. In general, this practice is not recommended. 

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

That is unlikely, as there is no legal basis for the competition authority to do so.

Referral to and from other authorities

26) Referral within the jurisdiction

The Vietnam Competition Commission may investigate transactions based on referral from other governmental agencies. The most relevant agencies are Departments of Planning and Investment at provincial-level administration where newly merged enterprises must register or notify the change in shareholding or corporate structure. As a matter of practice, the Vietnam Competition Commission may consult other agencies while assessing a merger notification. 

27) Referral from another jurisdiction

N/A

28) Referral to another jurisdiction

N/A

29) May the merging parties request or oppose a referral decision?

N/A

Filing requirements and fees

30) Stage of transaction when notification must be filed

A notification must be filed before the parties “proceed with the economic concentration”. This statement has been understood as notification to be done prior to completion of the transaction. 

31) Pre-notification consultations

The competition authority is open to pre-notification consultations.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

N/A

33) Forms available for completing a notification

There is only one required form for the merger notification. See topic 3.

34) Languages that may be applied in notifications and communication

The merger notification must be in Vietnamese. Documents in other languages must be accompanied with Vietnamese translation. 

35) Documents that must be supplied with notification

The following documents should always be supplied with a merger notification:

  1. A notification form issued by the Vietnam Competition Commission; 
  2. Draft agreement, contracts or memorandum of understanding regarding the merger;
  3. Certified Enterprise Registration Certificates or equivalent documents of each party involved in the merger;
  4. Financial reports of each party involved in the merger in the two preceding years before the submission of the merger notification or from the founding time to the submission of the merger notification if the enterprise is newly established with certification from audit organizations;
  5. List of parent companies, subsidiaries, associate companies, branches, representative offices and other affiliated companies of every enterprises involved in the transaction (if any);
  6. List of goods, services dealt by each enterprise involved in the merger;
  7. Information on the market shares in the intended sector of each enterprise in the merger; 
  8. Plans to remedy the restraint effect on competition of the merger;
  9. Assessment report of the positive impacts of the merger and measures to enhance such positive impact. 

36) Filing fees

There is currently no filing fee for filling the merger notification.

Implementation of merger before approval – “gun jumping” and “carve out”

37) Is implementation of the merger before approval prohibited?

Yes. The merging businesses must be run separately and independently until the merger has been approved. 

38) May the parties get permission to implement before approval?

There is no formal procedure for such permission and it is unlikely that parties may be able to get such permission.   

39) Due diligence and other preparatory steps

Due diligence must be conducted in a way that prevents sensitive market information from being used for purposes other than assessing the viability of the merger.

40) Veto rights before closing and "Ordinary course of business" clauses

N/A

41) Implementation outside the jurisdiction before approval – "Carve out"

There are no specific regulations on “carve out” of the Vietnamese part of a transaction to avoid delaying implementation in the rest of the world pending approval in Vietnam.

42) Consequences of implementing without approval/permission

The parties may be fined for implementing a merger without approval. The amount of the fine will be fixed based on the nature, gravity and duration of the infringement, and the fine cannot exceed 5% of the total turnover in the relevant market calculated according to the financial report of the preceding fiscal year.

Furthermore, if the merger is finally prohibited, the following remedies may also apply:  

    1. Divide, split or resell a part or all of the assets, capital charter of the undertaking formed after the merger;
    2. Put the undertaking formed after the merger under the relevant government agency’s control regarding buying price, selling price of goods and/or services or other transaction conditions in the contracts of the undertaking formed after the merger.
The process – phases and deadlines

43) Phases and deadlines

Phase

Duration/deadline

Pre-notification phase:

There is no pre-notification phase under the Law on Competition.

 

Assessment of completeness of notification:

When the merger notification is formally submitted, the authority must assess whether the merger notification is complete within 7 working days. After 7 days, the authority will send out an assessment notice. The assessment notice will announce whether the merger notification is complete and valid.

If the merger notification is deemed incomplete, the authority must notify the involved parties which information needs to be modified or supplemented. The parties must modify or supplement the merger notification within 30 days from the date of the assessment notice.

After the thirty-day time limit, if the parties still do not modify or supplement the merger notification as requested, the authority will return the merger notification.

7 working days.

Extension:
If the merger notification is declared incomplete, the parties will have another 30 days to supplement the merger notification.

Phase I: Preliminary assessment

After Phase I assessment, the merger is either approved or the authority will decide to initiate a phase II official assessment of the case.

The criteria that will be assessed in Phase I are: 

  • The combined market share of the involved parties;
  • Degree of economic concentration on the relevant market before and after the merger;
  • Relationship of the parties in the production, supply and distribution chain. 

30 days from the date when the merger notification was declared complete and valid.

Extension:
There is no extension. If the Vietnam Competition Commission fails to announce their decision within 30  days, the parties can implement the merger, and the authority may no longer issue a decision regarding the case. 

Phase II: Official assessment 

The merger is either approved, approved with conditions/commitments or prohibited.

The criteria that will be assessed in Phase II are: 

  • Assessment of the substantial restraint effect on competition and measures to remedy such restraint.
  • Assessment of the positive effect of the merger and measures to amplify such effect.

The parties may be asked to provide information, but no more than two times. 

90 days from the date when the phase II official assessment was initiated.

Extension:
There is a possibility for an extension of 60 days if the case is complicated. The parties will be notified of such extension. 

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

The criteria for each phase of assessment is set out in the table under topic 43 above.

45) May any non-competition issues be considered?

No.

46) Special tests or criteria applicable for joint ventures

The assessment for joint ventures is the same as for other mergers.

47) Decisions and remedies/commitments available

A merger may be approved, approved with conditions or prohibited.

An approval conditional on remedies may include the following types of conditions to be specified by the Vietnam Competition Commission:

  1. Divide, split or resell a part or all of the assets, capital charter of the undertaking formed after the merger;
  2. Control the transaction contents such as buying price, selling price of goods and/or services or other transaction conditions of the undertaking formed after the merger;
  3. Other measures to remedy the restraint effects of competition;
  4. Other measures to amplify the positive effect of the merger.

The Law on Competition is silent on whether the conditions are with or without time limitations.

The Law on Competition is silent on whether the authority may revoke an approval if at any time it becomes aware that incorrect or misleading information has been provided by the parties or if the parties do not comply with the conditions contained in the approval. 

If the merger has been implemented without approval, the Vietnam Competition Commission may prohibit the merger and apply measures to restore competition as set out under topic 42.

Publicity and access to the file

48) How and when will details about the merger be published?

The Vietnam Competition Commission will publicly announce its decision. The decision will be posted on the Vietnam Competition Commission website for a period of 90 days from the effective date of the decision. 

49) Access to the file for the merging parties and third parties

The merging parties:

There is no regulation in the Law on Competition on whether the merging parties can access the files of the Vietnam Competition Commission. It is unlikely that the involved parties can assess the files, except in cases of administrative court proceedings.  

Third parties:

There is no regulation in the Law on Competition on the issue whether third parties can access the files of the Vietnam Competition Commission. It is unlikely that third parties, who may have their rights or interests affected by the decisions of the Vietnam Competition Commission, can assess the files except in cases of administrative court proceedings. 

Judicial review

50) Who can appeal and what may be appealed?

In principle, parties to the merger or any third party having their rights/interests affected by the decision may file a complaint to the Chairman of the Vietnam Competition Commission or file the case at an administrative court. 


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