15-09-26 MTParners
The Government has issued Decree No. 103/2026/ND-CP detailing Investment Law No. 143/2025/QH15 on outbound investment activities, effective from April 3, 2026, replacing Chapter VI of Decree 31/2021/ND-CP. The decree, comprising 5 chapters and 45 articles, brings a series of important changes: easing tax obligation confirmation requirements, allowing share swaps in cross-border M&A transactions, while tightening capital conditions for enterprises under foreign control.
Under the previous regulation, investors had to obtain written confirmation of completed tax obligations for the preceding fiscal year — a requirement that often delayed applications during tax finalization season. Decree 103/2026/ND-CP removes this bottleneck: investors now only need a tax authority confirmation issued no more than 3 months before the application submission date. Though it seems minor, this change gives businesses far more flexibility in timing their outbound investment registration.
The most notable new provision allows Vietnamese investors to use shares, capital contributions, or profits of overseas economic organizations to pay for or swap in cross-border mergers and acquisitions (M&A), rather than being limited to cash payment as before. This opens the door to more complex capital restructuring deals, aligning with the reality of Vietnamese corporations expanding investment across the region.
Conversely, the Decree sets a tighter “barrier” for enterprises under foreign control (holding over 50% of charter capital) seeking to invest abroad: they may only use owner’s equity, not borrowed capital, and must prove two consecutive years of profit before submitting a registration application. This is clearly a risk-control measure aimed at preventing FDI enterprises from using domestic financial leverage for risky outbound ventures.
The Decree also adds monitoring mechanisms and periodic reporting requirements for capital flows transferred abroad, helping regulators better track the scale and purpose of capital use by investors after licensing.
For purely Vietnamese enterprises seeking overseas expansion, these changes shorten document preparation time and add a new financial tool (share swaps) for M&A execution. Conversely, foreign-controlled enterprises in Vietnam need to review their outbound investment plans, as the “two consecutive years of profit” and “equity-only” conditions may require adjustments to scale or timing.
Enterprises planning outbound investment in 2026-2027 should: (i) review financial statements for the past two years if under foreign control; (ii) prepare tax obligation confirmation documents within the 3-month window before filing; (iii) consider share/capital contribution swap arrangements instead of cash payment when negotiating cross-border M&A, to optimize cash flow; (iv) establish a periodic reporting process for outbound capital flows to avoid violating the new monitoring requirements.
MT & Partners Law Firm, with a team of experienced lawyers in investment and corporate law, is ready to advise and support businesses in reviewing conditions and preparing outbound investment registration documents under the latest regulations. Contact hotline 0987140772 or email info@mtpartners.vn for consultation.
(*) This article is for reference only and does not replace specific legal advice.
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