M&A Handbook: Procedure for a Single-Member LLC in Vietnam

In today’s increasingly dynamic business market, buying, selling, and transferring companies has become a common activity aimed at restructuring businesses, optimizing resources, or expanding investment scale. Among these, single-member limited liability companies (LLCs) – with their streamlined organization and simple management structure – are often the preferred type of business for such transactions. However, to ensure the transfer process complies with legal regulations and protects the rights of all parties, all required procedures must be followed. This article from Viet An Law will provide clients with information on the procedure for a single-member LLC in Vietnam.

When is the purchase and sale of a single-member LLC permitted?

The buying and selling of a single-member LLC occurs when the company owner transfers all of their capital contribution to another organization or individual. The characteristics of the buying and selling procedure for a single-member LLC that enterprises need to know include:

• A single-member LLC is owned by an individual or organization, and the owner has full authority to decide on the transfer and disposal of all or part of the company’s charter capital;
• If the owner transfers all of their capital contribution to another individual or organization, the company must carry out the procedure for changing the company owner.
• The individual or organization that acquires all of the capital contribution will become the new owner of the single-member LLC.

Benefits of merger and acquisition of a single-member LLC in VIetnam

• Acquiring a single-member LLC saves investors time and effort compared to establishing a new company because they don’t have to go through the procedures for enterprise registration, tax procedures, opening a bank account, applying for sub-licenses, etc.
• The organization or individual acquiring the company will inherit existing advantages such as signed economic contracts, customer base, suppliers, brand, business licenses in conditional business lines, etc.;
• The capital transfer process in a single-member LLC is easier and simpler than other types, minimizing the risk of future disputes;
• For the seller, this is a legal way to recover capital, withdraw from the market, or redirect investment;
• For the buyer, this is an opportunity to access the market faster, test new business models, or expand the business ecosystem.

Procedure for a single-member LLC in Vietnam

Step 1: Sign the capital transfer agreement and make the payment

• The parties agree on the transfer price of capital contributions and sign a capital contribution transfer contract:
• Individuals receiving the capital transfer can make payment through two methods: bank transfer or cash payment;
• Organizations receiving the capital transfer are not allowed to use cash for payment when conducting transactions involving the purchase and transfer of capital contributions in other enterprises;
• After the payment is completed, the parties sign a contract termination agreement.

Step 2: Submit the dossiers for changing company ownership

Within 10 days of completing the transfer, the new owner must register the change of company ownership at the provincial business registration authority. If the application is valid, the business registration authority will issue a business registration certificate to the enterprise, recording the information of the new owner. The processing time for changing company ownership is 3 working days from the date the business registration authority receives a valid application.

Step 3: File the personal income tax return

The company is responsible for filing the personal income tax return for the transferring individual with the tax authority within 10 days of signing the transfer contract. The processing time is 6-10 working days from the date the tax authority receives the dossier.

The competent authority to process the dossiers

Currently, the competent authority for processing applications for changes of ownership of a single-member LLC is the business registration agency under the Department of Finance of the province or city where the company’s head office is located.

Dossiers for changing ownership of a single-member LLC

Pursuant tp Article 41 of Decree 168/2025 and Circular 68/2025/TT-BTC, the dossier for changing the ownership of a single-member LLC includes the following documents:

• Application for registration of changes to enterprise registration details according to Form No. 15 issued with Circular 68/2025/TT-BTC;
• Copy of the organization’s legal documents and a copy of the document appointing an authorized representative in case the transferee is an organization;
• Contract for the transfer of capital contribution or documents proving the completion of the transfer;
• Copy of the document from the investment registration authority approving the purchase of capital contribution by the foreign investor;
• Power of Attorney for Viet An Law to submit the application (if any).

Notes when buying or selling a single-member LLC

Company purchase and sale contract

• The main content of the contract must clearly state the following information:
• Information of the seller and buyer;
• Transfer price; Transferable capital;
• Method and terms of payment;
• Legal responsibilities related to debts;
• Guarantee clause stating there are no ongoing disputes or litigation;
• Commitment to provide necessary documents and records.
• The contract must be signed by both the seller and the buyer, and confirmed by the legal representative of the single-member LLC;
• The parties should seek advice and support from lawyers or law firms to ensure the contract is valid and legally sound.

Obligation to pay personal income tax

Pursuant to the Law on Personal Income Tax 2007, individuals who generate income from capital transfers must declare income tax for each transaction.

Calculating the amount of tax payable:

• Personal income tax payable = Taxable income x 20% tax rate
• Taxable income = Transfer price – Purchase price of capital contribution

In the case of a transaction at par value, the tax payable is zero. However, personal income tax must still be declared in accordance with regulations.

Transfer pricing methods

• The buyer and seller can mutually agree on the transfer price. Typically, they base the price on the asset value recorded in the company’s financial statements to determine and agree on the transfer price; if necessary, both parties can hire an asset valuation firm to calculate the transfer price.
• The transfer price may be equal to, higher than, or lower than the registered capital stated in the enterprise registration certificate;
• The parties need to carefully agree on the assets registered in the company’s name, intellectual property rights, technology, and know-how to calculate an appropriate transfer value;
• When paying personal income tax, the tax authorities may determine the transfer price to calculate the personal income tax payable if they find that the transfer price agreed upon by the two parties is unfounded.

Responsibilities of the parties after buying or selling a company

• Both parties involved in the sale and purchase should create a detailed list of handover documents to avoid disputes after the transfer;
• From the time the transfer is completed and as agreed in the capital contribution transfer contract, the former owner is not responsible for the company’s operations;
• The new owner will inherit all obligations of the former owner, therefore, to minimize legal risks, before buying or selling a company, the buyer should:
• Request the seller to provide a certificate from the tax authority confirming that they have no outstanding tax debts;
• Inspect the company’s financial statements and accounting records;
• Review the company’s loan, guarantee, and mortgage agreements.

Some questions related to the buying and selling of a single-member LLC

Is an individual required to declare personal income tax upon the sale of a single-member LLC?

According to Circular 111/2013/TT-BTC, individuals transferring capital in LLCs, including single-member LLCs, must declare and pay personal income tax.

Is the transfer value of the company equal to the company’s registered capital?

The transfer price may be equal to, higher than, or lower than the registered capital stated in the Enterprise Registration Certificate. The transfer value is determined based on the asset value as reported in the company’s financial statements at the time of transfer.

When a company is sold, is the former owner liable for its operations?

From the moment the transfer is completed and in accordance with the agreement in the capital contribution transfer contract, the former owner is no longer responsible for the company’s operations.

Do company transfers and sales require tax settlement?

According to current regulations, tax settlement is not required when transferring or buying a company. However, to accurately determine tax obligations and the transfer value, the parties may agree to settle taxes before the company transfer.

For clients requiring advice on the procedure for a single-member LLC in Vietnam, please contact Viet An Law for the best support!