Capital Gains Tax on Share Transfers in Vietnam: Investor Exit Considerations

March 13, 2026 Posted by ASEAN Briefing Written by Ayman Falak Medina Reading Time: 5 minutes

Vietnam continues to attract strong foreign investment inflows, reinforcing the importance of understanding how divestments are taxed. The country recorded approximately US$38.2 billion in registered foreign direct investment (FDI) in 2024, while disbursed FDI reached about US$25.4 billion, bringing total accumulated FDI to more than US$500 billion across over 42,000 projects by 2025.

As these investments mature, divestments increasingly occur through equity sales involving subsidiaries, joint ventures, or portfolio holdings. Although Vietnam does not impose a standalone capital gains tax, profits from these transactions are taxed under the country’s corporate income tax (CIT) and personal income tax (PIT) regimes, directly affecting investor returns and deal structures.

For assistance with tax planning and investment exits in Vietnam, contact Dezan Shira & Associates

Understanding how these rules apply is therefore essential when planning investment exits in Vietnam.

Share transfers are the primary exit route for foreign investors

Foreign investors exiting Vietnamese investments typically do so through share transfers involving limited liability companies (LLCs) or joint stock companies (JSCs), the two corporate structures most widely used by foreign-owned businesses in the country.

Vietnam’s enterprise registry recorded more than 900,000 active companies by 2024–2025, while foreign investors participate in over 42,000 FDI projects across sectors such as manufacturing, services, and technology. Within this landscape, equity sales remain the principal mechanism through which investors restructure or divest Vietnamese operations.

Because these transfers represent the dominant exit pathway, the tax treatment of equity sales becomes a key consideration for investors evaluating divestment strategies.

How Vietnam taxes capital gains from share transfers

Vietnam taxes gains arising from equity transfers through its CIT and PIT systems rather than through a separate capital gains tax regime.

Foreign corporate investors transferring ownership in a Vietnamese company are generally subject to 20 percent corporate income tax on net gains. The taxable gain is calculated as the difference between the transfer price and the investor’s original capital contribution, adjusted for documented transaction expenses.

Foreign individual investors transferring capital in non-securities investments, such as equity stakes in private Vietnamese companies, are generally subject to 20 percent personal income tax on net gains. By contrast, transfers involving publicly traded securities are taxed under a simplified mechanism of 0.1 percent of the gross transaction value, regardless of whether the transaction generates a profit. This distinction reflects Vietnam’s separate tax treatment of capital transfers and securities transactions under the personal income tax regime.

For example, if a foreign investor acquires a 40 percent stake in a Vietnamese subsidiary for US$10 million and later sells the shares for US$16 million, the capital gain would be US$6 million. Applying the 20 percent corporate tax rate, the resulting tax liability would be approximately US$1.2 million, assuming no treaty relief or additional deductions apply.

Tax Treatment of Common Share Transfer Scenarios

Scenario	Applicable tax	Tax base	Typical rate
Corporate investor sells shares in a Vietnamese company	Corporate income tax	Net capital gain	20 percent
An individual investor sells shares in a private company	Personal income tax	Net capital gain	20 percent
Sale of publicly traded securities	Personal income tax	Gross transaction value	0.1 percent
Indirect transfer of Vietnamese assets through an offshore holding company	Corporate income tax or foreign contractor tax, depending on structure	Net gain attributable to Vietnamese assets	Typically 20 percent

This framework means the effective tax exposure depends on both the type of investor and the structure of the equity transfer.

Direct and indirect transfers of Vietnamese investments

Vietnamese tax obligations may arise not only from direct sales of shares but also from indirect transfers involving offshore holding structures.

Indirect transfers occur when investors sell shares in foreign entities that ultimately own Vietnamese subsidiaries. Even though the transaction takes place outside Vietnam, authorities may treat the sale as a transfer of Vietnamese assets.

To discuss capital gains tax implications for your Vietnam investments, reach out to Dezan Shira & Associates

This situation commonly arises in multinational restructurings and private equity transactions where Vietnamese operations are held through regional holding companies. Jurisdictions such as Singapore and Hong Kong, which serve as major investment hubs for Vietnam-related investments, frequently appear in these structures. Transactions affecting the ownership of underlying Vietnamese companies may therefore still trigger Vietnamese tax obligations.

Double tax treaties and capital gains planning

Vietnam has concluded more than 80 double taxation agreements (DTAs) with partner jurisdictions, including major investment sources such as Singapore, Japan, South Korea, China, the United Kingdom, and Australia.

These treaties may influence how capital gains from equity transfers are taxed by allocating taxing rights between Vietnam and the investor’s country of residence. In some cases, treaty provisions allow investors to offset taxes paid in Vietnam against domestic tax liabilities.

However, treaty benefits are not automatic. Investors must usually provide tax residency documentation and demonstrate that holding structures have sufficient commercial substance. Vietnamese tax authorities have increased scrutiny of cross-border arrangements to ensure treaty provisions are not used solely for tax avoidance.

Valuation and compliance risks in equity transfers

Vietnamese tax authorities review equity transfers to ensure that declared transaction prices reflect market value, particularly in transactions involving related parties or intra-group restructuring.

Authorities may request supporting documentation such as financial statements, valuation reports, or transaction records. Vietnam has strengthened tax enforcement in recent years, conducting thousands of corporate tax and transfer pricing inspections annually, with authorities recovering trillions of Vietnamese Dong in reassessed tax liabilities.

For multinational investors conducting internal reorganizations or partial divestments, maintaining robust documentation supporting share valuations is therefore essential.

Regulatory and banking procedures for completing equity transfers

Equity transfers involving Vietnamese companies must comply with several regulatory and financial procedures before ownership changes can be formally recognized.

Investors are required to submit tax declarations documenting the transaction value, acquisition cost, and supporting records. Tax liabilities generally must be settled before the enterprise registration authority updates shareholder records.

Investors planning share transfers in Vietnam can seek advisory support from Dezan Shira & Associates

Cross-border payments associated with capital transfers must also pass through designated foreign investment capital accounts maintained at Vietnamese banks. These procedures allow authorities to verify both the tax treatment of the transaction and the movement of investment funds.

Failure to comply with these requirements may delay regulatory approvals or the repatriation of sale proceeds.

FAQ

Does Vietnam have a separate capital gains tax?

Vietnam does not impose a standalone capital gains tax. Instead, gains from equity transfers are taxed under the corporate income tax or personal income tax regimes, depending on whether the seller is a corporate entity or an individual investor.

Are offshore share transfers involving Vietnamese companies taxable in Vietnam?

In certain cases, yes. Vietnam may tax indirect transfers where investors sell shares in offshore holding companies that ultimately own Vietnamese subsidiaries. If the transaction effectively transfers Vietnamese assets, Vietnamese tax authorities may require tax declarations and payment of applicable taxes.

Can double tax treaties reduce capital gains tax in Vietnam?

Vietnam has signed more than 80 double taxation agreements, which may allow investors to claim tax relief or avoid double taxation. However, investors must demonstrate tax residency and ensure their holding structures meet treaty eligibility requirements.

When must tax be paid during a share transfer?

Tax declarations are generally required before ownership changes can be formally registered. Investors must submit documentation supporting the transaction value and acquisition cost, and tax liabilities usually must be settled before shareholder records are updated.

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