Decree 324 Lifts M&A Cap as 50% Control Trigger Looms

Vietnam's International Financial Centre framework removes two of the biggest friction points in cross-border M&A: foreign ownership caps and investment registration requirements for share acquisitions. For deal lawyers and PE funds evaluating VIFC entry, that is genuinely useful liberalization. But Decree No. 324/2025/ND-CP (effective 18 December 2025) contains a provision at Article 6.2 that practitioners are only beginning to absorb — a binary classification trigger that permanently resets a VIFC entity's regulatory status for any investment it makes into mainland Vietnam, based entirely on whether foreign ownership crosses 50%.

The Baseline Problem Decree 324 Solves#

To understand what the VIFC regime liberalizes, start with what it replaces. The general market access restriction regime applicable outside the VIFC designates insurance, banking, and securities as sectors subject to market access restrictions under Vietnam's general investment regime. That means foreign ownership limits, sector-specific licensing requirements, and the full M&A registration procedure — obtaining approval for capital contributions and share purchases — before any acquisition can close. Note: the specific decree number cited in early drafts of this article could not be confirmed against the official gazette at time of publication; readers should verify the current operative instrument with Vietnamese counsel.

Inside the VIFC, Resolution No. 222/2025/QH15 (27 June 2025) overrides those caps entirely. A foreign investor can own all or part of a VIFC member's charter capital in any financial sector without hitting a statutory ceiling. This is the headline liberalization, and it is real: in securities and insurance specifically, the ordinary regime imposes caps that, outside the zone, would require structuring around minority positions or seeking individual exemptions. Those constraints simply do not apply to entities established and operating within the IFC zone.

Three residual conditions survive the liberalization. First, the entity must satisfy IFC membership criteria — financial capacity thresholds, sector alignment with the encouraged activities list in Decree No. 323/2025/ND-CP, and a registered headquarters within the IFC zone. Second, legal form requirements remain: securities firms and insurance companies must be established as limited liability companies and obtain an Establishment and Operation License from the State Securities Commission or Ministry of Finance respectively. Third, scope restrictions may apply — many VIFC financial licenses authorize services to IFC-zone and overseas clients only, not to the Vietnamese domestic market at large.

Article 6.1: Faster Setup, Not Full Deregulation#

Article 6.1 of Decree No. 324/2025/ND-CP creates a two-stage structure for investment procedure requirements.

At establishment, no Investment Registration Certificate is required. This removes one of the most time-consuming elements of foreign direct investment into Vietnam — the IRC process, which typically runs four to eight weeks even for straightforward cases. VIFC entity establishment proceeds through a simplified enterprise registration track.

The deregulation has a limit. Where a subsequent investment project — capital expenditure, project development, or a BCC arrangement within the IFC — meets the thresholds that trigger in-principle investment approval under the Investment Law, the VIFC member must obtain that approval before implementing the project. The IRC is gone; the in-principle approval obligation is not.

Practitioners should read this precisely: setting up a VIFC entity is faster. Deploying large-scale capital into qualifying projects within the IFC is still subject to an approval gate — it is simply an approval gate that does not require an IRC as its instrument. The distinction matters for fund deployment timelines and deal mechanics.

Change-of-Control: Simplified for Most, Preserved for Banks#

When a foreign investor acquires shares or contributed capital in a VIFC member, the standard M&A registration procedure under investment law — obtaining approval for the capital contribution or share purchase before closing — does not apply. Only enterprise registration changes are required to record the transfer.

This is a meaningful simplification for deal velocity. A share acquisition that would ordinarily require a two-step process (investment registration approval, then enterprise registration amendment) collapses to a single step inside the VIFC.

The banking sector appears to be carved out. Under the framework analyzed by BLawyers Vietnam, banking entities within the VIFC are understood to retain their M&A approval requirements — the simplified change-of-control procedure may not extend to bank share acquisitions. Note that the specific provision in Resolution 222 or Decree 329/2025/ND-CP that creates this carve-out has not been independently verified against the official Vietnamese gazette; practitioners should confirm the banking carve-out scope directly with the IFC Executive Authority or Vietnamese counsel before structuring a bank acquisition on the assumption that simplified procedures apply.

For non-bank financial entities — securities firms, insurance companies, asset managers, and other IFC-eligible financial services — the simplified enterprise-registration-only procedure applies.

Article 6.2: The Classification Trap#

This is the provision that will produce the most structuring risk for buyers who miss it.

When a VIFC member invests outward — establishing an entity, acquiring shares, or entering a BCC arrangement in mainland Vietnam — its investor classification for that downstream transaction depends entirely on the ownership structure of the VIFC entity itself at the time of the investment:

• Foreign investors hold more than 50% of charter capital (or foreign investors and FDI-funded entities collectively hold more than 50%): the VIFC member must satisfy foreign investor conditions and procedures for its mainland Vietnam investment.
• Foreign investors hold 50% or below: the VIFC member satisfies domestic investor procedures for its mainland Vietnam investment.

The practical consequence is severe. A buyer who acquires a controlling stake — say, 60% — in a VIFC financial entity does not just acquire that entity. They acquire an entity whose entire downstream investment capability in mainland Vietnam is reclassified to foreign investor status. If the target previously held investments in mainland Vietnam under domestic investor procedures (with faster timelines, no IRC requirement, no market access condition checks), those procedural advantages do not automatically continue post-acquisition. Any new mainland investment the VIFC entity makes after the change of control must meet foreign investor standards.

This is a material diligence issue for strategic acquirers and PE funds with portfolio companies that have or plan VIFC structures with mainland operating subsidiaries. The classification trigger is binary — 50% is the exact switch — and it applies to the consolidated foreign ownership calculation, including FDI-funded entities in the chain.

Deal lawyers structuring VIFC acquisitions should map this in three stages:

1. Ownership stage: Does the proposed acquisition tip foreign ownership above 50%? If yes, what mainland Vietnam investments does the target currently hold or plan, and can those investments satisfy foreign investor conditions?
2. Establishment stage: Is the VIFC entity establishing any new mainland entities post-close? What market access conditions apply to those sectors under the general regime?
3. Change-of-control stage: Does the acquisition itself trigger any approval requirements (enterprise registration only for non-banks; M&A approval for banks) and has the IFC Executive Authority been notified appropriately?

Outbound Investment Adds a Regulatory Checkpoint#

One further constraint applies to outbound transactions. Investment from a VIFC entity into offshore structures or overseas parties requires prior written approval from the IFC Executive Authority, except for sectors that have their own separate rules.

This is not a prohibition, but it is a timing consideration. Funds structuring VIFC entities as investment holding vehicles for regional strategies should factor in the approval timeline for outbound investments. The approval requirement is a control element that survives the otherwise simplified M&A framework — the IFC Executive Authority retains a gate on capital flowing out of the IFC zone to foreign jurisdictions.

For the SBV's complementary foreign currency and capital flow framework, see our analysis of Circular 72 and the no-forced-conversion mechanics. That article covers inbound capital treatment in depth; this article addresses the ownership-classification and transaction-approval dimensions.

The PIT Exemption: One Exit Incentive Worth Pricing#

Decree 324 adds one tax provision directly relevant to M&A transaction economics. Income from the transfer of shares, capital contribution rights, or contributed capital in IFC member entities is exempt from personal income tax until the end of 2030 — except for shares in listed public companies, which remain subject to standard PIT treatment.

This makes VIFC equity exits materially more attractive for individual sellers during the exemption window. A founder or early investor selling a stake in a VIFC financial entity before 31 December 2030 faces no PIT on the gain. The same transaction in a non-VIFC entity would attract PIT under the standard PIT schedule — understood to be 0.1% of transfer value for listed shares and 20% of net gain for unlisted shares, though readers should confirm current rates with Vietnamese tax counsel as these figures are subject to change.

For fund managers with VIFC portfolio companies approaching exit, this exemption has real pricing implications — particularly where management or founding shareholders are part of the exit structure. The exemption window closes at end of 2030 and no extension has been announced.

For the broader tax incentive architecture under Decree 324, including corporate income tax rates and the financial sector-specific provisions, see our Decree 324 tax incentives guide.

Where the Framework Sits in the Decree Architecture#

Decree 324 is one of eight implementing decrees issued under Resolution 222. Article 6 — the M&A and investment procedure provisions — interacts with three other instruments practitioners need to read together:

• Decree 323/2025/ND-CP: defines IFC governance structure, the encouraged sectors list, and membership eligibility — the foundation for whether an entity qualifies for the Article 6 exemptions at all. See Decree 323 explained.
• Decree 329/2025/ND-CP: the banking and foreign exchange framework for IFC member banks, which houses the rules understood to create the banking sector carve-out from simplified M&A procedures.
• The general market access restriction regime: the baseline against which IFC liberalization is measured, and the regime that reapplies to mainland Vietnam investments by foreign-majority VIFC entities under Article 6.2. The specific decree number for this instrument could not be confirmed against the official gazette at time of publication; verify with Vietnamese counsel.

A practitioner's reference map of all eight implementing decrees is available at VIFC's Eight Implementing Decrees: A Practitioner's Reference Map.

What Comes Next#

Three developments will determine how Article 6.2 operates in practice:

IFC Executive Authority guidance on classification methodology. The 50% threshold in Article 6.2 is clear; what is less clear is how the calculation applies to complex ownership chains — layered FDI-funded holding companies, convertible instruments, and options that affect effective economic ownership without crossing legal ownership thresholds. Guidance from the IFC Executive Authority on classification methodology would reduce structuring uncertainty. No publication timeline has been announced.

Banking carve-out clarification. The provision that is understood to preserve M&A approval requirements for bank acquisitions in the VIFC has not been independently confirmed against the official gazette text of Resolution 222 or Decree 329. A formal clarification — whether through an IFC Executive Authority circular or an official interpretation from the State Bank of Vietnam — is needed before bank M&A in the VIFC can proceed on a simplified-assumption basis.

Outbound investment approval timelines. As VIFC entities begin to make offshore investments, the IFC Executive Authority's approval process for outbound transactions will be tested in practice. The regulation creates the approval requirement but does not specify a statutory processing time. Market practice will establish a de facto timeline, but a formal procedural rule would give deal teams a reliable milestone to build into transaction schedules.

Buyers and their counsel should treat Article 6.2 as mandatory diligence for any acquisition that results in foreign ownership above 40% — close enough to the threshold that transaction terms (including earn-outs, options, or secondary tranches) could push ownership across it post-close. The 50% trigger does not apply only at signing; it applies at any point when the ownership calculation crosses the line.

This article reflects the framework as of 26 May 2026. The Article 6.2 threshold analysis relies on law firm and Big Four secondary summaries rather than a verified official Vietnamese gazette text. Decree numbers cited for the general market access restriction regime outside the VIFC could not be confirmed at time of publication. We will update this article when the primary gazette text is confirmed or when the IFC Executive Authority issues classification guidance.