The new tax legal framework paves the way for a breakthrough in Vietnam's M&A market.

Besides economic potential, legal factors, especially tax policies, have created favorable conditions for M&A transactions to become more vibrant and effective.

In recent years, Mergers and Acquisitions (M&A) have become one of the key development strategies for Vietnamese businesses. Simultaneously, Vietnam is in the process of modernizing many of its legal frameworks to better align with global trends.

Tax policy, a key factor influencing investor decisions, has recently undergone significant changes. The draft Decree guiding the Corporate Income Tax Law of 2025, recently published, introduces important reforms and greater transparency regarding tax obligations in capital transfer transactions. This is considered a crucial step in resolving many obstacles and paving the way for breakthrough development of M&A activities in Vietnam.

Challenges in M&A activities in Vietnam

Compared to many markets in the region, M&A activity in Vietnam still has many unique characteristics. The relevant legal system – including regulations on taxation, capital transfers, and corporate governance – is still being perfected, sometimes leading to inconsistent interpretations and applications among regulatory agencies. This creates numerous barriers for both domestic and international investors.

In particular, determining tax obligations arising from capital transfers, both direct and indirect, is frequently a subject of debate. Common difficulties include: declaring and paying taxes on indirect capital transfer transactions, determining the cost basis of the transferred capital, and handling internal corporate restructuring transactions.

Tax reform - a groundbreaking step

The draft of the new Decree has proposed a clear solution: applying a 2% tax rate on capital transfer revenue for foreign investors holding capital in unlisted Vietnamese companies, instead of calculating it on net income as before. This regulation applies to both direct and indirect transactions, while excluding cases of internal restructuring within the same group to avoid unnecessary tax burdens.

According to Ms. Vo Hiep Van An, Deputy General Director, Tax & Legal Advisory Services, Deloitte Vietnam, applying a fixed tax rate on revenue makes regulations clearer, significantly reduces disputes in practice, and allows investors to accurately and confidently predict their tax obligations right from the planning stage.

Tax policies are a driving force behind more active and effective M&A transactions.

The new regulations not only bring transparency but also limit the risk of retroactive tax collection after many years – one of the biggest concerns of international investors. Therefore, the new policy both ensures a stable source of revenue for the State budget and strengthens the confidence of the business community.

Prospects for M&A and future direction for Vietnamese businesses.

With an increasingly clear legal framework, M&A activity in Vietnam is expected to continue booming in the coming years. Sectors with great potential include renewable energy, technology, finance, real estate, healthcare , consumer goods, and retail.

The government's timely adjustments to the Corporate Income Tax Law, along with specific guidelines on capital transfers, have helped Vietnam enhance its competitiveness compared to other markets in the region – where many countries are also accelerating reforms to attract FDI.

To take advantage of the opportunities presented by the new tax policies, Vietnamese businesses should prioritize:

- Increased transparency in governance and finance: standardized reporting and compliance with legal regulations to enhance investor confidence.

- Enhance internal governance capacity: improve decision-making processes, adopt international best practices, thereby increasing competitiveness in the eyes of M&A partners.

- Proactively update policies: stay informed about legal information, preferential policies, and consult with experts to be prepared for complex transactions.

Thorough preparation, combined with support from reputable consulting firms, will be key for Vietnamese businesses to succeed in the M&A arena, thereby enhancing their position in the regional and global markets.

Deloitte Vietnam affirms its leading position.

In 2025, Deloitte Vietnam once again affirmed its leading position when it was honored by the International Tax Review (ITR) with three prestigious awards: “Tax Firm of the Year” (for the 5th consecutive year), “Transfer Pricing Firm of the Year”, and “Controversy Firm of the Year” in the Vietnamese market.

These are top-tier, prestigious awards in the global tax advisory field, with only one company from each country receiving an award in each category. This achievement further demonstrates Deloitte Vietnam's pioneering role in providing tax advisory, transfer pricing, and tax dispute resolution solutions, supporting the business community in the process of integration and sustainable development.

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