Mergers and acquisitions (M&A) activities of projects are becoming an indispensable part of the investment market in Vietnam. In the real estate sector, many projects are transferred from one investor to another before being completed or put into operation. However, it is worth noting that the same business objective, transferring control of a project, can be done through various legal structures.
This difference is not just a matter of legal technicalities. It can decide the investment procedure to be carried out, the transfer conditions to be met, the financial obligations that arise and especially how to determine the tax on the transaction.
More broadly, this is not just the story of a specific case. That is the problem that many businesses, investors and investment funds are facing when structuring project M&A deals in Vietnam.
A recent guidance by the tax authority has made that clear. In Official Letter No. 9074/DON-QLDN1 dated May 21, 2026[1], Dong Nai City Tax has raised a notable issue when considering the transaction of receiving the transfer of a real estate project: is this transaction an investment project transfer or a real estate investment project transfer? The answer to that question will lead to a completely different way of calculating VAT.
More broadly, this is not just the story of a specific case. That is the problem that many businesses, investors and investment funds are facing when structuring project M&A deals in Vietnam.
One goal, multiple transaction structures
When looking to take over a project, investors usually have three basic options.
Firstly, receive direct transfer of the project.
Secondly, receiving the transfer of contributed capital or shares of the enterprise owning the project.
Third, receive the transfer of core assets of the project such as land use rights, construction works or technical infrastructure.
Commercially, all three options can result in the same outcome that control of the project is transferred to the new investor.
However, from a legal perspective, these are three completely different transactions.
That difference not only affects how the transaction is carried out, but also determines how the state regulator views the nature of the transaction and applies the corresponding legal provisions.
Transfer of an investment project is the transfer of the right to execute the project
According to the Law on Investment 2025, an investment project is a set of proposals to invest capital to carry out business investment activities within a specified period of time. When transferring an investment project, the object to be transferred is the investor's rights and obligations towards the project. The transferee investor will replace the old investor to continue implementing the project according to the conditions approved by the state agency. The important point is that not every project using land is a real estate project.
A manufacturing plant, data center, logistics facility, power plant, or industrial park can all use a very large area of land. However, the core goal of these projects is not the real estate business but the production of goods or the provision of services.
In those cases, the main object of transfer is the right to invest and the right to implement the project. The nature of the transaction is therefore a mere transfer of an investment project.
Transfer of real estate investment projects: not only transfer of investment rights
Unlike ordinary investment projects, the value of real estate projects is associated with land use rights and the ability to exploit commercially from that land fund.
The transferee not only receives the right to implement the project but also receives the right to develop, do business and exploit the economic value of the real estate formed from the project. That is why the Law on Real Estate Business 2023 dedicates a chapter to regulate the transfer of all or part of real estate projects.
The transferring investor must meet the conditions related to land, planning, project implementation schedule and financial obligations to the State. The transferee investor must also meet certain conditions to continue implementing the project.
From the perspective of state management, this is not only a change of investors but also a transfer of the right to exploit a land resource with great economic value.
Why is transaction classification important?
If you only look at it from an investment perspective, the difference between the two types of transactions mentioned above may not be really clear. However, when entering the field of taxation, that difference becomes very significant.
In its guidance letter, the Dong Nai tax authority has given two different approaches to the same transaction.
If the transaction is determined to be the transfer of an investment project, the VAT calculation price must not be deducted from the value of the land use right.
On the contrary, if the transaction is determined to be the transfer of a real estate investment project belonging to real estate business activities, the VAT calculation price shall be deducted from the land use levy or land rent already paid to the state budget in accordance with the VAT law.
For projects where land value accounts for a large proportion of the total transaction value, this difference can significantly alter the financial performance of the deal. In other words, this is not only a technical tax issue, but also an investment strategy issue.
Many "project buying" deals are actually capital purchases
Observing real estate M&A deals in recent years can reveal an interesting fact: the market often refers to it as a project sale, but the legal structure of the transaction is not always a project transfer.
In many deals involving corporations such as Gamuda Land, Keppel, CapitaLand Development, Frasers Property or international investment funds, the transferee is usually the shares or capital contribution of the enterprise that owns the project. After the transaction, the legal entity that owns the project still exists. The project is still legally under the same subject. What changes is the owner of that legal entity.
This approach helps the investor to take control of the project without necessarily having to carry out the entire project transfer process according to the investment law or the law on real estate business. However, that does not mean that every transaction related to the project can be seen as a mere transfer of capital.
Current regulatory trends show that state agencies are increasingly interested in the economic nature of transactions rather than just looking at external legal forms.
This is also the reason why the VAT Law 2024[2] continues to define capital transfer as not subject to VAT but at the same time emphasizes that capital transfer does not include the transfer of investment projects or the sale of assets. This regulation reflects the efforts of lawmakers to delineate the boundary between financial investment activities and project or asset transfer activities.
When the enterprise equates the control of the project with the transfer of the project
One of the most common mistakes of businesses in practice is that every transfer of control of a project is naturally a transfer of the project. In fact, this is not the case.
If the investor buys back shares of the company owning the project, the object to be transferred is the contributed capital.
If the investor buys the land use rights or construction works, the object to be transferred is the property.
If the investor receives all rights and obligations to the project, the object to be transferred is the project.
These three cases can lead to the same business outcome, but the legal nature is completely different.
That's why accurately identifying the transferee becomes the most important issue in any project M&A transaction.
A project can be delivered through a variety of roads.
Where to look to determine the true nature of the transaction?
In practice, it is possible to consider many criteria simultaneously.
The first criterion is the subject to be transferred.
If the object to be transferred is the rights and obligations to the project, the transaction tends to be the transfer of the project.
If the object to be transferred is a share or contributed capital, the transaction tends to be a capital transfer.
If the object to be transferred is land, works or individual assets, the transaction tends to be the transfer of assets.
The second criterion is the legal system that governs transactions.
If the transaction must carry out procedures according to the Law on Investment or the Law on Real Estate Business, this is a sign of project transfer.
If the transaction is mainly carried out under the Law on Enterprises, it is likely that this is a capital transfer transaction.
The third criterion is the rights and obligations arising after the transaction.
If the new investor inherits the legal position of the old investor for the project, the transaction is in the nature of transferring the project.
If the enterprise is still the subject of the project implementation and only changes the ownership structure, the transaction is in the nature of capital transfer.
The last criterion is the real economic goal of the transaction.
This is a factor that is increasingly valued by management agencies in the process of evaluating and applying the law.
The nature of the transaction is more important than the name of the transaction
The most important message that can be drawn from the guidance of the Dong Nai tax authority is that the determination of tax obligations must start from determining the legal nature of the transaction.
A transaction related to a real estate project is not necessarily a transfer transaction of a real estate project.
A transaction called "project purchase" in the market is not necessarily a legal transfer of the project.
Conversely, a transaction structured in the form of a capital transfer does not mean that all legal consequences will be seen as a mere financial investment transaction.
In the context of the growing real estate M&A market, the choice of transaction structure should not only come from commercial objectives or tax cost optimization.
It is more important to accurately identify the object to be transferred, the legal regulations governing the transaction and the corresponding legal consequences.
Conclusion
A project can be delivered through a variety of roads. It can be a project transfer, capital transfer or asset transfer. Even within the scope of project transfer, there is a significant difference between the transfer of an investment project and the transfer of a real estate investment project.
That difference not only affects legal procedures but also directly impacts tax obligations, financial efficiency and risk management ability of investors. Therefore, the most important question in each transaction is not what the transaction is called, but what is the real economic and legal nature of the transaction. Only by answering this question correctly can businesses design an appropriate transaction structure, limit the risk of disputes with regulators and ensure investment efficiency in the long term.
Lawyer Nguyen Van Phuc
HM&P Law Firm
[1] https://dongnai.gdt.gov.vn/wps/wcm/connect/3478a8da-5760-4e8b-ba8f-d11069523132/C%C3%B4ng+v%C4%83n+9074+DON-QLDN+1+ng%C3%A0y+21.5.26+vv+ch%C3%ADnh+s%C3%A1ch+thu%E1%BA%BF.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE3478a8da-5760-4e8b-ba8f-d11069523132, accessed on 2026/06/18.
[2] Point d, Clause 9, Article 5 of the VAT Law 2024.
