Episode 1: Merger control in Vietnam at a glance

Merger control generally refers to the process of reviewing economic concentrations in accordance with competition regulations. It is adopted to prevent anti-competitive effects of such economic concentrations and has ex-ante regimes, meaning that competition authority must conduct their review prior to the completion of economic concentrations.

The primary merger control legislations in Vietnam are Law on Competition No. 23/2018/QH14 and Decree 35/2020/ND-CP dated 24 March 2020 providing guidelines to Law on Competition 2018. The Law stipulates, inter alia, definition of economic concentration, notification thresholds, dossier requirements, the review process and violations of the merger control regime.
Vietnam Competition Commission (VCC), which was recently established on 01 April 2023, is Vietnam’s principal competition authority. Under the purview of the Ministry of Industry and Trade (MOIT), VCC assumes the functions of overseeing the merger control regime and imposing fines and remedies accordingly.

With respect to “economic concentration”: An economic concentration occurs when there is a transaction of merger, acquisition, consolidation or joint venture:

• Merger: the transfer by one or more enterprise(s) of all of its lawful assets, rights, obligations and interests to another enterprise and, at the same time, the termination of the business activities or the existence of the merging enterprise(s);
• Acquisition: the direct or indirect purchase by one enterprise of all or part of the capital contribution or assets of another enterprise sufficient to control or govern the acquired enterprise or any of its trades or business lines;

The concept of “control or govern” occurs when the acquiring enterprise will have “control” over the target or a business line of the target in any of the following circumstances:

- the acquiring enterprise obtains more than 50% of charter capital or more than 50% of the total voting shares of the target (voting control criteria);
- the acquiring enterprise obtains ownership of or the right to use more than 50% of the assets of the target concerning all or one business line of the target (asset control criteria); or
- the acquiring enterprise has one of the following rights over the target (other control criteria): (i) the right to directly or indirectly decide on appointment or removal of the majority of managing officers of the target; (ii) the right to decide on amendment or supplement of the target’s charter; (iii) the right to make important decisions concerning the business operation of the target

• Consolidation: the transfer by two or more enterprises of all of their lawful assets, rights, obligations, and interests to form one new enterprise and, at the same time, the termination of the business activities or the existence of the consolidating enterprises;
• Joint venture: two or more enterprises together contributes a portion of their lawful assets, rights, obligations, and interests to form a new enterprise.

However, Vietnamese competition regulations do not provide any explicit exemptions to transactions that inherently raise no competition concerns and should not be subject to merger filing requirements. For instance, internal restructuring transactions within enterprises under the control of the same ultimate parent (intra-group transaction) pursuant to which it does not change the control of such group on relevant market. Another example is that foreign to foreign economic concentrations with no local nexus (e.g., where the target does not generate any revenue on Vietnam market). These transactions are unlikely to raise any competition concerns but might still trigger merger filing requirements if any notification thresholds are met.

As such, merger filing requirement is triggered when an economic concentration reaches or exceeds any notification thresholds as follows. All enterprises to the transaction must jointly submit merger filing dossier to VCC.

In addition, there are other legislations governing economic concentrations in particular industries. These provisions do not override merger control regulations under Law on Competition; rather, they exist alongside such Law on Competition. 

Specifically, in insurance industry, insurance enterprise must obtain written approval from Ministry of Finance if it (i) transfers shares or contributed capital resulting in a shareholder holding at least or less than 10% of the company’s charter capital; (ii) restructures by way of division, merger, consolidation, dissolution, or conversion of legal form.

For credit institution, it must obtain written approval from State Bank of Vietnam if it is s restructured by method of division, demerger, consolidation, merger, acquisition or conversion of legal form.

With respect to telecommunications, prior to economic concentration, telecommunications enterprises that have combined market share of 30-50% on the relevant market must notify to Ministry of Information and Communications.

 1. Article 74 of Law on Insurance business 2022
 2. Article 153 of Law on Credit institutions 2010
 3. Article 19.5 of Law on Telecommunications 2009