MERGERS AND ACQUISITIONS OF COMPANIES IN VIETNAM

Mergers and acquisitions of companies are complex economic transactions that are increasingly developing due to the numerous benefits and economic value they bring. Many businesses use mergers and acquisitions as a primary activity to grow their business. Currently, in Vietnam, mergers and acquisitions of companies are gradually becoming more common. Consequently, the demand for legal services related to businesses is increasing. LHB Law Firm is currently an experienced and specialized entity in business-related matters in Vietnam. Customers in need of corporate legal services, please contact LHB Law Firm at Hotline: +84.969.088.118 (Zalo).

What is Mergers and Acquisitions (M&A)?

From an economic perspective, mergers and acquisitions aim to create a new entity with greater strength and potential compared to the original companies. M&A transactions are used to quickly strengthen and enhance a company’s competitive position in the market.

From a legal standpoint, mergers and acquisitions involve the transfer of a portion or all of the assets, rights, obligations, and legal interests to another company. According to Vietnamese law, a merger is a form of business reorganization. One or several companies can merge into another company by transferring all assets, rights, obligations, and legal interests to the acquiring company, while the merged companies cease to exist.

M&A activities in Vietnam must be carried out according to the procedures and steps prescribed by law. The M&A process is only considered complete when all legal formalities have been finalized with the state management agency responsible for businesses in Vietnam.

Contact a Business Lawyer in Vietnam at Hotline:: +84.969.088.118 (Zalo).

Legal Due Diligence for Company Mergers

Currently, mergers and acquisitions (M&A) activities in Vietnam are quite bustling. However, M&A in Vietnam still faces many risks. The causes of risks in M&A activities in Vietnam include: non-transparent corporate finances; complex and lengthy administrative procedures; tax and investment incentive policies not applicable to most businesses… Therefore, conducting due diligence and evaluating a business before proceeding with a merger is essential. When using the business lawyer services of LHB Law Firm, custommers will receive:

• Lawyers’ participation in accurately evaluating the merging company;
• Determining the necessary price and costs for the merger;
• Identifying potential risks within the business;
• Advising on risk prevention and elimination during the merger;
• Advising and supporting the preparation of dossiers, contracts, and legal documents for the merger;
• Lawyers advising and supporting the execution of procedures at state administrative agencies.

In practice, there are many cases where lack of thorough due diligence before a merger leads to significant resource expenditure to address arising and unresolved issues. Legal due diligence for a company is a crucial step, serving as the basis for the buyer to determine the purchase price, method, and timeline for the transaction.

Contact a Business Lawyer in Vietnam at Hotline: +84.969.088.118 (Zalo).

Procedures for Company Mergers in Vietnam

The procedures for company mergers in Vietnam are stipulated as follows:

Step 1: Preparation

• The involved companies prepare a merger agreement and a draft charter for the acquiring company. The merger agreement must include the following key contents:
  • Name and address of the head office of the merging company;
  • Procedures and conditions for the merger; labor utilization plan;
  • Methods, procedures, deadlines, and conditions for transferring assets, converting capital contributions, shares, and bonds of the merging company into those of the acquiring company;
  • Deadline for implementing the merger.

Step 2: Approval and Registration

• The members, company owners, or shareholders of the involved companies approve the merger agreement, the charter of the acquiring company, and proceed to register the acquiring company according to the provisions of this Law. The merger agreement must be sent to all creditors and notified to employees within 15 days from the date of approval.

Step 3: Business Registration

• Proceed with business registration. The merging company ceases to exist. The acquiring company inherits all benefits, rights, and obligations of the merged company.

Note: The companies undergoing the merger must ensure compliance with the Competition Law regarding company mergers.

Contact a Business Lawyer in Vietnam at Hotline: +84.969.088.118 (Zalo).

Compliance Conditions for Company Mergers

A company merger involves one or several companies transferring all their assets, rights, obligations, and legal interests to another company while ceasing the business operations or existence of the merging companies. Mergers are a form of economic concentration and are prohibited if they significantly restrict competition in the Vietnamese market.

For state-owned enterprises and public companies, mergers must comply with legal regulations on information disclosure. Information disclosure must be carried out according to the provisions of the Enterprise Law and the Securities Law.

For company mergers, the following activities should be performed:

• Check and review the financial activities of the company.
• Check and evaluate the commercial activities of the company.
• Check and review the legal documents of the company.
• Check and review the company’s tax records.
• Check and evaluate other activities of the company, such as labor usage, internal management, and legal compliance.
• Valuate and negotiate the purchase price and terms for the merger.

Contact a Business Lawyer in Vietnam at Hotline: +84.969.088.118 (Zalo).

Fees for Lawyer Services in Mergers and Acquisitions in Vietnam

Currently, LHB Law Firm provides a wide range of legal services nationwide. The fees for business lawyer services at LHB are as follows:

FEES FOR BUSINESS LAWYER SERVIVECES IN VIETNAM
NO	SERVIVECES	FEES
1	Receiving Information and Procedural Guidance	Free
2	Direct or Phone Consultation with Lawyer	50 USD/hour
3	Written Consultation with Lawyer	Từ 100 USD/hour
4	Legal Due Diligence and Evaluation	Agreement
5	Legal Due Diligence and Evaluation	Agreement
6	Regular Business Legal Consultation	Agreement
7	Business Restructuring Consultation	Agreement
8	Company Dissolution and Bankruptcy	Agreement
9	Representation in Negotiations and Contract Signing	Agreement
10	Dispute Resolution for Businesses	Agreement

 Fees for Lawyers Services in Vietnam: Hotline +84.969.088.118 (Zalo).

Lawyer Services for Resolving Disputes in Company Mergers and Acquisitions in Vietnam

To ensure legal compliance, LHB Law Firm offers services related to mergers and acquisitions, including:

• Legal Consultation: Providing advice on mergers and acquisitions in Vietnam.
• Due Diligence Support: Assisting with the evaluation of companies involved in mergers and acquisitions.
• Risk Assessment: Advising and evaluating risks during the merger and acquisition process.
• Representation: Representing clients throughout the merger and acquisition process.
• Procedure Assistance: Helping with the procedural aspects of company mergers and acquisitions in Vietnam.
• Dispute Resolution: Resolving disputes that arise during mergers and acquisitions.

For disputes arising from mergers and acquisitions, LHB Law Firm can assist clients with:

• Consultation and Strategy: Advising, assessing, and developing strategies for resolving business disputes.
• Negotiation: Representing clients in negotiations to resolve business disputes.
• Mediation: Participating in mediation at mediation centers.
• Arbitration: Representing clients in arbitration at arbitration centers.
• Court Proceedings: Representing clients in disputes before the People’s Court.
• Enforcement: Assisting with the enforcement of court judgments or arbitration awards.

With our team of lawyers and office network across the country, we are capable of handling disputes for clients in all 63 provinces and cities.

Contact a Business Lawyer in Vietnam at Hotline: : Hotline +84.969.088.118 (Zalo).