Payment process for M&A transactions in Vietnam is subject to the requirements of foreign exchange regulations. These requirements affect which currency the parties can use for payment, and what type of bank account the parties can use to transfer or to receive the purchase price. Treatment varies based on where the buyer and the seller come from, whether the target company is a domestic entity or a foreign-invested entity, and also the internal policy of the relevant bank (where the law is not clear on a certain issue). As such, while the payment process is important in any M&A transaction, parties to a transaction may find it confusing to determine how the payment should be made to ensure compliance with foreign exchange regulations.
To facilitate parties’ consideration, we provide a quick reference guide in form of a matrix summarizing the requirements on currency and bank accounts for various types of M&A transactions in Vietnam.
