Corporate Restructuring in Vietnam: Division, Separation, Consolidation, Merger

Short answer: Corporate restructuring comprises 4 forms: division, separation, consolidation, and merger (LLCs, joint-stock companies, partnerships), along with type conversion. The company after restructuring inherits all rights and obligations of the company before restructuring; members, shareholders, and employees are protected under the approved restructuring plan. In cases of merger or consolidation, economic concentration notification may be required if thresholds are exceeded under the Competition Law. Legal basis: Articles 198–205 of the Law on Enterprises 2020 (as amended by Law No. 76/2025/QH15).

Legal basis

• The Law on Enterprises 2020, as amended and supplemented by Law No. 76/2025/QH15 — Article 198 (division), Article 199 (separation), Article 200 (consolidation), Article 201 (merger), Article 202 (type conversion);
• The Competition Law 2018 — on economic concentration;
• Decree 168/2025/ND-CP on enterprise registration.

Four forms of corporate restructuring

1. Division

A company is divided into several new companies of the same type; the divided company ceases to exist. The new companies are jointly liable for the obligations of the divided company.

2. Separation

A company separates part of its assets and members to establish a new company of the same type; the separated company continues to exist. The separated company and the new company are jointly liable for obligations (unless otherwise agreed).

3. Consolidation

Two or more companies of the same type consolidate into one new company; the consolidated companies cease to exist.

4. Merger

One or more companies (the merged companies) merge into another company (the surviving company); the merged companies cease to exist. The most common form in M&A.

General principles in restructuring

• Succession: the company after restructuring inherits all rights, obligations, and lawful interests of the company before restructuring;
• Restructuring plan: must be approved through the proper process (Board of Members/General Meeting of Shareholders), clearly stating: names and addresses of related companies; employee arrangement plan; deadlines and procedures for transferring assets, capital, contracts; debt settlement plan;
• Employees: the employee arrangement plan must protect their rights (continued contracts, severance/job-loss allowances if terminated);
• Creditors: creditors must be notified; creditors may request payment or security for obligations;
• Economic concentration: mergers and consolidations exceeding thresholds (asset scale, revenue, market share, etc.) must notify the National Competition Commission before implementation.

Registration procedures

• Division, separation, consolidation: register the establishment of new companies + register termination/capital reduction of the divided, separated, or consolidated companies;
• Merger: register changes of enterprise registration contents of the surviving company + register termination of the merged companies;
• Submit to the Business Registration Office; processing time is 3 working days for valid dossiers.

Tax obligations in restructuring

• Division, separation, consolidation, and merger are not dissolution — the succeeding company continues tax obligations;
• Must complete finalization and tax declarations up to the restructuring point; transfer tax obligations to the succeeding company;
• Asset transfers between companies during restructuring may trigger tax obligations (VAT, CIT, registration fees, etc.) — each transaction needs specific assessment.

Frequently asked questions

Does restructuring require state authority approval?

In principle, restructuring is an enterprise’s autonomous right, implemented through registration procedures (not “approval applications”); but economic concentration cases exceeding thresholds must notify the competition authority, and certain special sectors (banking, insurance, etc.) have their own approval requirements.

Do employees lose their jobs in a merger?

The law requires an employee arrangement plan; employees continue working at the succeeding company or receive severance/job-loss benefits as prescribed.

How does division differ from separation?

Division: the old company ceases to exist, forming new companies. Separation: the old company continues to exist, separating part of it to establish a new company.

Notes on applying current laws

Corporate restructuring is a complex transaction intersecting enterprise, tax, labor, and competition laws — errors at any stage (creditors, employees, economic concentration) can lead to complaints or invalidation of the transaction. Having a lawyer accompany you from the plan design stage is recommended. Contact ANT Legal at 0966.475.966 for advice.

Common risks to watch out for

• Failing to notify creditors and employees;
• Missing the economic concentration notification obligation when thresholds are exceeded;
• Not finalizing tax obligations up to the restructuring point;
• Unclear asset and debt division plans — disputes after restructuring.

How ANT Legal can help

ANT Legal advises on division, separation, consolidation, merger, and conversion plans; legal due diligence; drafts dossiers and carries out registration procedures; advises on tax, labor, and competition matters. For quick advice, please contact our lawyers at 0966.475.966.

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