Practice of contributing capital with technology in Vietnam

1. Capital contribution activities by technology in recent years

Capital contribution by technology is a form of allowing members or shareholders to contribute intangible assets (such as intellectual property rights, technology, technical know-how) to the capital of the enterprise. Vietnam's legal framework has recognized this activity in practice. Thus, businesses can completely receive capital contributions as a technology or invention. After contributing, the right to use that technology will belong to the enterprise, while the contributor loses the ownership/use right to this technology.

In the period of 2015-2025, Vietnam's innovative startup ecosystem will thrive, leading to an increase in technology capital contribution activities. According to statistics from the Ministry of Science and Technology, by 2025, Vietnam will have about 4,000 innovative start-ups in operation[1]. The number of science and technology enterprises (S&T), which apply research and technology results to production – increased from only 538 enterprises (in 2020) to 816 enterprises (in 2023) and about 940 enterprises by mid-2025[2]. The support ecosystem also expands with 208 venture capital funds, 84 incubators and 40 business promotion organizations by 2025. This shows that the startup environment has been vibrant, creating conditions for the form of capital contribution with technology assets to develop. In fact, capital contribution by software and digital platforms has become no longer strange in Vietnam. Many tech startups are founded by individuals who contribute their software or technology solutions to the company's charter capital.

However, the implementation practice still has many challenges. The biggest difficulty lies in the valuation of technology when contributing capital. The law stipulates that technological assets must be valued by a valuation council or a professional appraisal organization before making capital contribution. In fact, the valuation of technology in Vietnam still lacks specific guidance and does not have uniform standards, and the market data on inventions and technologies is incomplete, leading to valuation that is mainly approximate. This is easy to pose a risk: technology can be priced higher than it actually is, causing businesses to receive capital contributions to suffer losses if the technology is outdated and has no value. On the contrary, if the valuation is too low, the owner of the technology is judged to be inappropriate. Due to the limited capacity of technology appraisal, capital contributors are likely to fall into disputes later related to the real value of the technology. In addition, the percentage of enterprises granted scientific and technological certification is still low compared to expectations (816/5000 targets by 2023, only ~16%)[3], reflecting that many enterprises have R&D activities but have not completed the accreditation procedures or have not been interested in the unattractive procedures and preferential policies. However, the general trend in recent years is that more and more startups apply technology and innovate to create a premise for capital contribution with technology to become more popular in Vietnam in the coming time. Especially when the legal framework for this field is gradually completed by the relevant agencies.

Notably, in 2025, witnessing a step forward in policy, the Government issued Decree 210/2025/ND-CP, effective from September 15, 2025, allowing capital contribution to the innovative startup investment fund with intellectual property rights, technology, and technical know-how. In the past, start-up investment funds (usually in the form of private capital contributions) mainly received capital contributions in cash, but now small and medium-sized enterprises can use their own technology and inventions to contribute to the fund in exchange for investment capital. This new regulation opens up new avenues for technology startups to raise capital, while encouraging the commercialization of intellectual property. In addition, a series of recent directions of the Party, State and Government agencies will be the premise as well as the motivation for technology capital contribution activities in Vietnam to develop strongly with new, clear, effective and more brilliant milestones.

In summary, it can be seen that in recent times, technology capital contribution activities in Vietnam have contributed to gradually shaping the legal framework, there has been a growth in the number of startups and investment funds participating, but also revealing inadequacies that need to be removed in terms of valuation and administrative procedures.

2. Challenges in technology capital contribution in Vietnam

2.1 Difficulties in technology valuation

Unlike tangible assets that have a clear market, technology assets are often difficult to determine their value because there is no available market price and their value is highly dependent on future applicability. The Law on Enterprises 2020 requires non-cash capital contributions to be valued in Vietnam Dong before contribution. The valuation can be agreed upon by the founding shareholders on the principle of unanimity, or a professional appraisal organization is hired. However, there is no uniform standard method for valuing technology, leading to each valuation council may give different results. In fact, to determine the price of trademarks and patents, the Ministry of Finance has guided 3 groups of methods (cost, market, income approach), in which the income approach should be prioritized because other methods are difficult to apply or do not consider the future value of intellectual property[4]. However, the law does not specify how to choose a valuation method or a settlement mechanism when the parties cannot agree on the value.

As a result, the risk of mispricing technology assets is very high. If the valuation is too high than the actual value, businesses and capital contributors will face many consequences. The law stipulates that in case the assets contributed as capital are valued higher than the actual value at the time of contribution, the founding shareholders must contribute the difference and be jointly responsible for the damage caused by intentionally overvaluing. This means that if the value of technology is inflated when contributing capital, after the valuation is completed, shareholders must pay more money to compensate for the difference between the valuation value and the real value or be jointly responsible for compensation for damages. Conversely, if the valuation is too low, the owner of the technology is disadvantaged in terms of shares, and the technology may not be properly valued for its potential. In fact, it often happens that technology contributors have the advantage of information, so they tend to value it highly, while enterprises receiving capital contributions (especially small enterprises) are passive and not knowledgeable enough to fully evaluate the value of technology. The disparity between parties in technology understanding leads to inaccurate pricing, businesses may receive technology that is not as expected or outdated technology that does not have much use value.

Another difficulty is the lack of reputable valuation organizations and reference data. Technology valuation services in Vietnam are currently in their infancy, not professional, and have not met social needs[5]. There is no detailed guidance from the authorities on the process and cost of technology pricing; international valuation standards have also not been fully applied. The database system on inventions and similar technologies is lacking and difficult to access. Therefore, even when hiring a price appraisal organization, the results may be inaccurate and controversial. The Law on Enterprises requires more than 50% of the founding shareholders to approve the valuation results of the appraisal organization, but if the results are not reliable, it is very difficult to reach a consensus. Notably, the current law does not clearly stipulate the ratio of compensation liability between the capital contributor and the valuation organization if the valuation is wrong. This gap can lead to disputes when damage due to valuation occurs, because it is not clear whether the valuer or the asset contributor is primarily responsible.

In summary, the valuation of technology and intellectual property for capital contribution faces many challenges: lack of standard methods, results that easily fluctuate between valuation councils, risk of misvaluation causing damage and disputes later. This is a major barrier that directly affects the determination of the percentage of shares of technology capital contributors in the enterprise.

2.2. The legal framework still has many loopholes and is not synchronized

Although the law has allowed capital contribution by technology, the legal framework still has gaps and is not synchronized, causing confusion when implementing.

Firstly, conditions on technology ownership/use rights: The Law on Enterprises 2020 stipulates that only individuals and organizations that are the legal owners or have the legal right to use assets are allowed to use such assets to contribute capital. Therefore, the person who contributes capital with technology/software must prove the legal ownership or right to use that technology. In the case of intellectual property, it is required to have a protection title or a document certifying intellectual property rights issued by a state agency. For example, an invention, trademark, or design must have a patent or registration certificate; other subjects, if the law does not require registration, still need documents proving the owner. This leads to the reality: before contributing capital, individuals/organizations must register for intellectual property protection (if they do not have one) to meet the conditions for capital contribution. This can be a time and cost barrier for technology owners who have not yet registered their rights.

Secondly, technology transfer contracts are mandatory legal requirements but are not fully recognized by many people. The Law on Technology Transfer determines that capital contribution by technology is a form of technology transfer, so it must be made into a written industrial construction contract. This contract needs to have the contents specified in Article 23 of the Law on Technology Transfer, and the conclusion and performance are governed by specialized laws (Law on Technology Transfer, Civil Code, Commercial Law, IP Law, etc.). Many capital contributors may not know that the capital contribution agreement in the company's charter alone is not enough, but an independent technology transfer contract is needed to transfer technology rights from the capital contributor to the company.

Thirdly, procedures for registration of technology transfer: The Law on Technology Transfer stipulates a number of cases in which technology transfer must be registered with the state management agency (Ministry of Science and Technology). Specifically, the technology transfer contract for capital contribution is subject to registration if the technology is transferred from abroad to Vietnam, from Vietnam to abroad, or transferred domestically using state capital. Except in these cases, purely domestic technology transfer between private individuals is not required to be registered. However, in fact, many businesses still register to ensure legality. The registration dossier includes an application, a technology transfer contract (the original or a certified copy and a Vietnamese translation if the contract is in a foreign language). The law allows a period of 90 days from the date of signing the transfer contract to submit the registration dossier, and the management agency must issue a Registration Certificate within 5 working days if the application is valid. The problem is that many businesses are not familiar with this procedure, which may be delayed, leading to the contract not taking effect in time. Because according to the law,  technology transfer contracts that are subject to registration are only effective from the time of issuance of the Registration Certificate. This directly affects the time of recognition of the capital contribution: the technology is only officially transferred to the company when the contract takes effect, that is, after the completion of registration. If the issuance of the certificate is delayed more than 90 days from the establishment of the company, there may be a conflict with the provisions on full capital contribution within 90 days of the Law on Enterprises.

Fourth, procedures for transferring ownership of intellectual property: For assets with registered ownership (patents, trademarks, registered copyrights, etc.), the Law on Enterprises requires capital contributors to carry out procedures for transferring ownership of such assets to companies at competent state agencies. For example, if contributing capital to a patent or trademark, an ownership transfer contract must be made and registered at the NOIP. If only the license is transferred, there must also be a license contract registered at the NOIP. This regulation ensures that after capital contribution, the company becomes the legal owner or user of technology and intellectual property. However, one inadequacy is that these intangible assets cannot be "delivered" like tangible assets. The making of a delivery record usually applies to tangible assets, while for intangible assets such as trade secrets, unregistered software, the method of handover is not clear. In fact, if the software has not registered copyright, when contributing capital, the parties often make a record of delivery and receipt of assets clearly stating information about assets, value, capital ratio, date of delivery, etc. to certify that the company has received the property. However, the law does not have detailed guidance on the form of delivery and receipt minutes for intangible assets, making businesses confused in completing transfer procedures.

Fifth, the legal gap on the term of technology protection: The current law does not anticipate the case of capital contribution in technology or intellectual property when this right expires. In fact, many intellectual property has a finite term (e.g., a patent is protected for 20 years, a trademark is renewable for 10 years). If an individual contributes capital with the value of the ownership of the invention/trademark with the agreement to use it during the term of protection, then after the expiration, how should that contributed capital be handled? The Law on Enterprises does not provide for the reduction of charter capital in case the contributed assets are IP rights expire or the expiration of the agreed capital contribution period. Assuming that the capital contribution contract with a trademark has a term of 10 years (equal to the remaining term of protection of the trademark), at the end of 10 years, the capital contributor may lose his membership or have his capital reduced, and the company must carry out the procedures for reducing the charter capital accordingly. However, the law has not specifically guided how to handle this situation. Another case: if capital is contributed by trademark ownership (complete transfer), after the transfer, the company is the permanent owner. When the capital contribution contract/agreement expires (if there is a stipulation on the time limit for capital contribution), the company continues to own and use that trademark. Does the company need to reduce its charter capital in this case? Currently, the Law on Enterprises does not have specific regulations, making businesses not know what legal basis to rely on to handle, easily leading to disputes between the company and the capital contributor when the agreement period expires.

The above problems show that the relevant legal system is not completely synchronous in terms of capital contribution procedures by technology. The lack of detailed regulations on conditions for transferring rights, the time of recording capital, and handling when technological rights expire has made it difficult for businesses to comply with the law and protect the interests of the parties.

2.3 Complicated and lengthy administrative procedures

Contributing capital using technology requires more administrative procedures than contributing capital with money or tangible assets. This process is often lengthy, complicated and lacks specific guidance, including the main steps: (1) Valuation of assets contributed as capital; (2) Signing capital contribution/technology transfer contracts; (3) Preparation of enterprise/investment registration documents; (4) Transfer of technology ownership: After contributing capital, the capital contributor must completely transfer the assets to the company; (5) Recording the contributed capital.

The above steps show that the administrative process is quite complicated, requiring the participation of many agencies (Department of Finance, Ministry of Science and Technology, NOIP, notary office, etc.). The completion time can be long, especially for IP assets that must be registered for transfer (registration at the NOIP usually takes several months). Without clear guidelines, businesses are prone to embarrassment or deadline violations. Currently, there is no integrated one-stop process for the case of capital contribution by technology. Each stage is handled by an agency with a separate procedure, making the overall heavy. For example, after 90 days, if the NOIP has not completed the transfer of the name of the invention, in principle, the capital contributor has not fulfilled the contribution obligation, the company must adjust the capital – an unintended consequence. In addition, the lack of specialized guidance from ministries and branches makes the understanding and application of the law inconsistent. In some places, business registration officers are not used to processing capital contribution dossiers with intangible assets, may request additional documents outside the regulations. All lead to the psychology of businesses being afraid to implement when considering contributing capital with technology.

2.4 Problems related to finance, tax, audit

The contribution of capital by technology and intellectual property poses many accounting, financial and tax issues that businesses need to pay attention to:

Recognition of intangible assets: When a company receives capital contribution by technology, the value of that technology is recorded as an intangible fixed asset in the accounting books, with the historical cost being the value valued and approved by the parties. According to current regulations[11], in order to be recognized as an intangible fixed asset, the asset must definitely bring economic benefits in the future, have a useful life of more than 1 year and have a historical cost of VND 30 million or more. Trademarks and inventions, if they satisfy these conditions, will be considered as intangible assets of the enterprise. However, there is an inadequacy: Vietnam Accounting Standards (VAS 04 on intangible fixed assets) do not list a trademark as an intangible fixed asset. This causes confusion for accountants in accounting for the value of trademarks and brands. In principle, the company receiving capital contribution with IP rights must account for that value in contributed capital and fixed assets, and at the same time deduct depreciation from business expenses when calculating CIT from the time of capital contribution. However, according to rigid accounting standards, endogenous intellectual property (created by the enterprise itself) is often not recorded as fixed assets. In the case of capital contribution, intellectual property is considered to be acquired from outside (the capital contributor), so it can be recorded. However, there is no specific guidance from the Ministry of Finance on how to determine the historical cost and allocate the value of assets such as trademarks to the books. As a result, the same trademark/patent, but when contributing to different businesses, it is recognized with different values, depending on the valuation of each place. This raises the question: who has the authority to determine the "true value" of that intellectual property. If businesses deliberately record the trademark value too high, they can benefit by increasing virtual capital, increasing depreciation costs to reduce CIT, or creating collateral to borrow capital... This is a loophole that can be taken advantage of, and in fact, it requires the authorities to soon legislate and clearly stipulate how to determine and record the value of intellectual property on the balance sheet.

Depreciation of intangible assets: Intangible fixed assets (fixed assets) formed from technological capital contributions shall be depreciated similar to other fixed assets if used for business activities. The tax and accounting law stipulates that enterprises are only allowed to calculate depreciation expenses for fixed assets used for production and business, have sufficient documents proving that they are owned by the enterprise, and are managed according to books. In case the assets contributed as capital have been re-evaluated when they are put into the company, the enterprise shall be depreciated according to the reassessed historical cost. Thus, after completing the procedures for transferring the ownership of the technology to the company, and the technology participates in generating revenue, the company is allowed to depreciate the value of capital contribution. The time and method of depreciation of intangible assets (usually by the straight line method) comply with the provisions of Circular 45/2013/TT-BTC and relevant documents. Note, if the intellectual property has a finite term (e.g. a 20-year patent), the depreciation period must not exceed the remaining useful life of the asset. As for assets such as software (copyright, 50-year protection period), businesses can estimate the useful life for appropriate depreciation. In special cases: if the contributed capital assets become unusable or the value declines rapidly (due to obsolete technology, expiration of protection, etc.), the enterprise needs to consider adjusting the residual value or recording a decrease in assets, corresponding to the adjustment of charter capital (if the contributed capital is no longer valid).

Tax obligations when contributing capital by technology: Most cases do not incur tax at the time of capital contribution. According to the current tax policy: contributing capital with assets (including technology, IP rights) to establish or increase the company's capital is not subject to VAT because this is not a normal purchase and sale activity. Therefore, the transfer of IP rights is not subject to VAT. Regarding corporate income tax (CIT), companies that receive contributed capital by technology are not required to declare taxable income for the value of contributed capital added to business capital. Simply put, capital contribution is a capital transaction, not the revenue or taxable income of the enterprise receiving capital. For individuals who contribute capital, income from giving up assets for shares is considered income from capital investment, and is not taxed at the time of contribution if the individual has not received any income (dividends or dividends have not been paid). Personal income tax is only incurred when the individual later receives dividends or profits from the investment or when transferring the contributed capital/shares to another person. In other words, technology capital contributions do not generate immediate taxable income for the contributor.

However, there are some notes on taxation: Firstly, the tax authority has the right to check the valuation of assets contributed as capital. If it is detected that the declared technology value is abnormally high compared to the market price, it can be considered tax fraud (in order to increase the cost of short depreciation). At that time, the tax authority can impose tax according to the Law on Tax Administration. Enterprises must value honestly and in accordance with the value of ordinary transactions to avoid the risk of tax arrears and sanctions. Secondly, when the technology contributed capital is from a foreign organization/individual, it is necessary to consider the factor of CGCN tax (subject to foreign contractor tax). However, if they contribute capital to get shares instead of collecting money, there is no payment to impose contractor tax. Income later paid abroad will be taxed like ordinary shareholders (currently the tax rate is 5% for foreign shareholders). Thirdly, license tax: the increase in charter capital due to technology capital contribution may change the license tax level (if it exceeds the threshold), enterprises need to declare and adjust the license tax payment rate according to the new charter capital.

From the perspective of finance – accounting, capital contribution by technology greatly affects the capital structure and financial statements of the company. Enterprises need to ensure that they are properly recorded, depreciated in accordance with regulations, and at the same time comply with accounting standards to avoid errors (for example, only intellectual property with sufficient legal grounds and economic interests will be recorded, avoiding blank recording of unprotected or unvalued brand assets). Tax issues mainly revolve around valuation control and compliance with obligations when capital transfers arise later. In general, the tax law has preferential provisions for capital contribution activities with assets, but enterprises still need to be careful in documents proving the value and ownership of assets contributed as capital.