Vietnam’s Competition Law: Notes for M&A Transactions

Posted by Written by Uyen Nguyen Reading Time: 6 minutes

A merger and acquisition may be an effective and efficient way to enter the Vietnamese market. These deals, however, can limit healthy competition and as such are regulated – here’s what foreign firms need to know to avoid violating Vietnam’s Competition Law.

Mergers and acquisitions (M&A) are subject to rules and regulations in Vietnam. In particular, Vietnam’s Competition Law ensures that no single company is able to establish a monopoly or have a market share that gives it an unfair advantage over another.

This law has become increasingly important in Vietnam as its growing economy, and the liberalization of ownership rules with respect to foreign investment, have given way to a growing number of M&A.

Specifically, in the first half of 2022, the National Competition Commission (NCC) received 62 notifications of M&A that could potentially infringe the Competition Law. This was almost double the number of dossiers submitted in 2020.

M&A transactions are set to grow as the country continues on its path of more local deregulation alongside greater global integration.

With this in mind, basic due diligence on how Vietnam’s Competition Law applies to their investment plans can help foreign entities save time and resources when entering into M&A transactions.

What is Vietnam’s Competition Law?

The Competition Law regulates anti-competitive practices in Vietnam. It also outlines the legal processes for dispute resolution and the consequences for violations of the law.

The most recent iteration of the Competition Law came into force in 2018. It is much more comprehensive than the 2004 Competition Law that preceded it. Specifically, it expands the entities covered to include professional associations operating in Vietnam, as well as related domestic and foreign agencies, organizations, and individuals.

Who implements the Competition Law?

The 2004 Competition Law had a dual agency system for investigations and enforcement. These two agencies were: the Vietnam Competition and Consumer Authority (VCCA) and the Vietnam Competition Council (VCC).

Under the 2018 law, these two agencies were consolidated into one: the NCC. This organ has now taken on the role of both investigating and adjudicating cases involving anti-competitive practices.

Breaches of the Competition Law in M&A Transactions

Anti-competitive behavior

In general, an M&A transaction will be prohibited if it is found to have the potential to have a substantially anti-competitive impact on the Vietnamese market.

In determining whether or not an M&A transaction will have substantial anti-competitive effects, one or more of the following factors are considered:

  • Combined market share both before and after in the relevant market;
  • Relationship of the participating enterprises, to determine the competitive advantages the joint entity will have, and whether or not this will put the new entity at an unfair advantage;
  • The impact it has on relevant prices or profits on goods sold;
  • The ability to hinder the business operations of other enterprises or to put other enterprises out of business; and,
  • Other sector specific factors.


Aside from anti-competitive behavior, there are a number of administrative violations that companies may run afoul of. These include:

  • Failure to notify the NCC of an M&A transaction that may breach the Competition Law;
  • Proceeding with an M&A transaction without receiving a preliminary assessment from the NCC;
  • Proceeding with an M&A transaction without a decision in an official assessment from the NCC;
  • Failure to meet or fully meet the conditions on market concentration outlined by the NCC; and
  • Proceeding with the M&A transaction against the outcome of the official assessment issued by the NCC.

When should the NCC be notified about an M&A transaction?

General enterprises

There are four key criteria for most enterprises (ex. financial services, see below) with regard to notifying the NCC about a potential merger or acquisition. These are:

  • When the total assets in the Vietnamese market reach VND3 trillion (US$126 million);
  • When the total sales turnover or purchase costs in the Vietnamese market reach at least VND3 trillion (US$126 million);
  • The market share of the deal reaches at least VND1 trillion (US$42 million); or
  • The combined market share represents more than 20 percent of the market.

Financial enterprises

For mergers and acquisitions in the finance sector, there are several conditions, on top of those above, under which the NCC should be notified. These include:

  • When the total assets in the Vietnamese market reach more than VND15 trillion (US$631 million);
  • When the total assets in the Vietnamese market reach more than 20 percent of the total assets of credit institutions in Vietnam;
  • When the total sales turnover in the Vietnamese market is more than 20 percent of the total sales turnover of credit institutions in Vietnam;
  • The value of the deal reaches more than VND3 trillion (US$126 million); or
  • The value of the deal reaches more than 20 percent of the total charter capital of credit institutions in Vietnam.

How to notify the NCC

Businesses must notify the NCC via a dossier, which covers a number of key details of the intended M&A transaction.These include:

  • A notification of merger or acquisition;
  • Agreed contents of the merger or acquisition;
  • Valid copies of the business registration certificates;
  • Financial statements;
  • A list of parent companies, subsidiaries, associate companies, branches, representative offices, and other affiliated entities of every engaging enterprise (if any);
  • The list of goods and services that is sold by the enterprises;
  • Information about the current market share of each company;
  • Proposed remedies for possible anti-competitive effects; and
  • An assessment report.

Penalties for breaches of the Competition Law

Enterprises in contravention of the Competition Law may be subjected to a range of penalties.


Enterprises that breach the Competition law can be subject to fines ranging from 0.05 percent to 3 percent of turnover of the previous year. The amount of the fine will depend on the type and severity of the breach.

Forced separation

In the event a merger is undertaken in contravention of the Competition Law, the merged enterprises may be forced apart.

Forced sale

If an enterprise acquires another business in a manner that does not comply with the conditions of the Competition Law, it may be forced to sell either part or all of the newly acquired asset.

State management

Companies that perform mergers or acquisitions that violate the Competition Law may be placed under the management of a relevant state agency.

Certificate revocation

Enterprises that are found to have committed an offense with regard to the Competition Law may also have their enterprise registration certificates revoked.

Cases studies in M&A and Competition Law in Vietnam

Vinamilk and Kido

In 2020, Vietnam Dairy Products Joint Stock Company (Vinamilk) and Kido Group Joint Stock Company (Kido) planned to establish a joint venture. The newly established joint venture company would be 51 percent owned by Vinamilk and 49 percent owned by Kido.

With Vinamilk and Kido holding significant market shares in the dairy market, they were required to notify the NCC. The NCC reviewed the dossier compiled by the two organizations and ruled that the joint venture would not breach Vietnam’s Competition Law.

Elanco and Bayer

In January 2020, Elanco Animal Health Incorporated Company (Elanco) paid US$7.6 billion for German firm Bayer AG’s entire animal healthcare business.

Although not established under Vietnamese law, the enterprises participating in the deal were required to notify the NCC with respect to their Vietnam-based operations.

The NCC reviewed Bayer and Elanco’s notification dossier and determined that deal would not contravene the Competition Law. However, it did raise concerns that the deal may give Elanco an unfair share of the market for antimicrobial drugs for pigs.

Grab and Uber

In March 2018, Grab bought Uber’s business operations in eight markets in Southeast Asia, including Vietnam.

After working with GrabTaxi Vietnam, the VCCA organized a meeting with legal representatives of Uber Vietnam. Subsequently, it was determined that an investigation was necessary.

In November of the same year, it was concluded that Grab and Uber had, in fact, breached the Competition Law (Decision No. 64/QD-CT). The VCCA found that after the merger, Grab’s market share was above 50 percent. In this light – there were two key alleged violations:

  • Parties involved had failed to notify the VCCA; and,
  • Grab’s market share after the acquisition was too heavily concentrated.

This was then reviewed by the Vietnam Competition Council (to be later superseded by the NCC), which determined that Grab and Uber had not breached the Competition Law (Decision No. 26/QD-HDXL). It found that, combined, they did not have more than 30 percent of the market, the threshold for which the VCCA should be notified at the time.

M&As in Vietnam moving forward

Large enterprises with the financial capacity to do so, are still busy carrying out M&A deals in 2023. A series of banks, including Vietcombank, VPBank, and PG Bank, have all expressed a desire to engage in M&A deals in the near term.

With the current economic turbulence, big firms looking for bargains may find what they are looking for in emerging markets like Vietnam where high growth potential and greenfield opportunities are plenty. Foreign firms, however, should be mindful that there are restrictions and regulations in place to tackle anti-competitive behavior. Being mindful of these regulations is important to ensuring M&A transactions run as smoothly as possible.

For support with mergers and acquisitions in Vietnam, contact the experts at Dezan Shira and Associates.

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