Corporate Acquisitions and Mergers in Vietnam

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FRESHFIELDS BRUCKHAUS DERINGER
ECONOMIC, POLITICAL AND CULTURAL BACKGROUND
	Overview of Vietnam’s Economy
	Economic Integration
	Vietnam’s Infrastructure: General
	Language
	Government and Political System
	Legal System
	Openness to Foreign Investment
	Current Trends
	Sector Trends
	Sourcing Deals and Obstacles to Deals
	Vietnam: Risks
		Predictability
		Enforcement Risks
		Foreign Ownership Restrictions
		Development Risk
		icensing Issues
		Land Use Rights
		Employment Law
		oreign Exchange
		Tax
		Import and Distribution
		Corruption
		Deal Risks: Negotiating Style
		Deal Risks: Inflated Valuations
		Deal Risks: Lack of Adequate Assistance
CORPORATE FRAMEWORK
	Business Vehicles
	Effect of Corporate Form on Acquisitions
	Compliance and Reporting Requirements
	Minimum Capital
	Governance Structure in a Vietnamese Company
	Decision-Making
		Decision-Making in a Multi-Member Limited Liability Company
		Decision-Making in a One Member Limited Liability Company
		Decision-Making in a Joint Stock Company
	Executive Authority
	Legal Representative
	Foreign Management
REGULATORY FRAMEWORK
	Laws Affecting Acquisitions
		Principal Laws
		Principal Variables
	Relevant Regulatory Authorities
		Government
		Central-Level Ministries
		Ministry of Planning and Investment
		Department of Planning and Investment
		State Securities Commission
		State Bank of Vietnam
		Vietnam Securities Depositary
		Vietnam Competition Authority
	Regulatory Framework
	Acquisition of Companies Engaged in Businesses ThatAre Subject to Conditions
		General Rules
		Conditional Businesses
		Acquisitions of Companies Operating in Both Conditional and Other Sectors
	Foreign Ownership Limits
		Examples of Foreign Ownership Limits
		Foreign Ownership Limits: Public Companies
	Control
		Majority Ownership
		Practice
	Timing of Governmental Approvals: Practical Considerations
	Acquisitions of Interests Through Nominees
ACQUISITIONS IN THE STATE SECTOR
	Disposals by the State: Prognosis
	Equitisation and State Divestment: DifferentRegulations
	Equitisation: Different Principles for Strategic andNormal Investors
	Equitisation: Strategic Investors
		Buying Shares as a Strategic Investor
		Strategic Investors
		Price: Strategic Investor
		Ownership Percentage: Strategic Investor
		Lock-Up Period: Strategic Investor
		Currency of the Purchase
	Equitisation: Buying in the Initial Offering
		State Divestment
		‘State Capital’
		Forms of Divestments of ‘State Capital’
		Price
	Limits on Dispositions by the State
		No Sales of State Interests
		65% State Ownership
		50% State Ownership
PUBLIC COMPANY ACQUISITIONS
	General
	Majority Transactions
	Hostile Transactions
	Public Tender Offer
		PTO Requirements
		Cross-Border Structures
		Board Actions
		Partial Offers
		‘Mandatory’ Bids
		Buying Shares Outside a Bid
		Terms of a PTO
		Timetable
		Publicity
		Withdrawal of Bids
		Announcements and Disclosure Obligations
		Squeeze-Outs
		Sanctions
	Transaction Process
	Acquisition of Listed Shares on the Exchange
	Acquisition of Listed Shares off the Exchange
	Acquisitions of Unlisted Public Companies
	Securities Trading Codes
	Disclosure Obligations
	Reporting Requirement for ‘Major Shareholders’
	Reporting Requirements for ‘Internal Shareholders’
	Target Company Commitments
	Due Diligence
MERGERS
	Overview
	Procedures
	Implementation of Mergers
INVESTMENT INCENTIVES AND PROTECTIONS
	General
	Encouraged Investment Sectors
	Encouraged Geographical Areas
	Standard Investment Incentives: Tax
	Standard Investment Incentives: Land
	Documentation of Investment Incentives
	Protections Against Expropriation or Nationalisation
	Protections Against Change in Law
FINANCING
	Acquisition Financing
	Foreign Loans: Conditions and Registration
	Foreign Loans: Tax and Transfer Pricing
	Foreign Loans: Offshore Bank Accounts
	Debt Limitations
	Security Interests
		Security Interests: General
		Security Interests: Mortgages of Assets
		Security Interests: Mortgages of Equity Interests
		Security Interests: Guarantees
		Security Interests: Land Use Rights and Assets Attached to Land
		Security Interests: Security Over Future Assets
		Security Interests: Registration of Security Interests
		Security Interests: Foreclosure
PAYMENT, FOREIGN EXCHANGE AND REMITTANCE
	General
	Accounts for Acquisitions of Shares: Direct Investment
	Accounts for Acquisitions of Shares:Indirect Investment
	Currency of Payment: Indirect Investment
	Remitting Foreign Currency: Indirect Investment
	Remitting Foreign Currency: Direct Investment
	Remittance: Direct Investment
COMPANY LAW AND SECURITIES LAW ISSUES
	Shareholder Approvals
	Regulatory Approvals
	Governance Issues
		Governance
		Loyalty
		Inside Information
		Tender Offers
	Form of Consideration
	Financial Assistance
	Purchase of Own Shares
	Preference Shares
		Dividend Preferences
		Liquidation Preference
		Hybrid Preference Shares
	Shareholders’ Agreements
	Restrictions on Transferability of Shares
	Put and Call Agreements
	Costs and Fees
	Dividends
	Corporate Veil
	Bankruptcy
DUE DILIGENCE ISSUES
	Due Diligence: The Vietnam Context
	Due Diligence: Publicly Available Information
	Due Diligence: Systemic Issues
	Corruption
		Criminal Code
		Anti-Corruption Law
		Gift Regulations
	Money-Laundering Regulations
	Environmental Laws
	Product Safety Laws
	Intellectual Property Rights
	Distributors and Agents
	Valuation Issues
	Change of Control Clauses
	Due Diligence of a Public Company and InsiderTrading Rules
	State Secrets
	Representations and Warranties
	Practical Advice
LAW AND DISPUTE RESOLUTION
	Governing Law
	Contracts Governed by Vietnamese Law
		Predictability
		Unfamiliar System of Law
		Confidence in the Certainty of the Contractual Bargain
	Dispute Resolution: Vietnamese Courts
	Dispute Resolution: Vietnamese Arbitration
	Dispute Resolution: Foreign Courts
	Dispute Resolution: Foreign Arbitration
	Strategic Considerations
MERGER CONTROL
	Background
	Economic Concentrations
	Relevant Market
	Merger Control
	Procedures and Scope of Substantive Review
	Jurisdiction
	Penalties
	Criminal Penalties
TAXATION
	Asset Acquisitions
	Tax Consequences of Asset Acquisitions
		Taxes
		Accrued Liabilities
		Carry-Forward Losses
		Depreciation
	Share Acquisitions
		Transfer of Capital
		Tax on Sale of Shares: Public Companies
		Tax on Sale of Shares: Private (Non-public) Joint Stock Companies
		Tax Loss Carry-Forward Rights
	Structuring
		Offshore Transactions
		Dividend Payments
		Acquisition Financing
	Remittance
	Registration Fee
	Consolidation
	Tax Treaties
	Risks
	Transfer Pricing
EMPLOYMENT CONSIDERATIONS
	General
	Structuring Employee Transfers in Vietnam
	Statutory Transfer
	Resignation and Re-employment
	Redundancy and Re-employment
	Transfer on the Basis of a Tripartite Agreement(Without Resignation)
	Other Issues
ACCOUNTING
	Accounting Standards
	Valuation
	Acquisition Accounting
	Consolidation
FUTURE DEVELOPMENTS
	Reform Generally
		Comprehensive and Progressive Agreement for Trans-Pacific Partnership
		European Union-Vietnam Free Trade Agreement
	Equitisation and Sales of State Assets/CMSC
	Financial Sector Consolidation
	Real Estate Acquisitions
	Energy
	New Laws
		New Competition Law
	New Laws in the Pipeline
		Law on Amendment to the Securities Law
		Law on PPP
		Law on Amendment to the Enterprise Law and the Investment Law