Vietnam M&A 2025: Hotspots Global Investors Are Targeting
July 4, 2025
Land Isn’t the Deal: Why Paperwork Is More Valuable Than Property in Vietnam
July 8, 2025In Vietnam’s fast-evolving M&A landscape, the party across the negotiation table often isn’t the one who truly holds the keys. Proxy structures, nominee arrangements, and opaque shareholding layers can obscure who really controls an asset. For foreign investors, failing to identify the ultimate decision-maker is among the most common—and costly—reasons deals fall apart.
The Hidden Layers Behind Most Transactions
Many first-time investors assume that the person introducing a deal, signing a term sheet, or presenting a land certificate is the legal owner. In practice, the reality is far more complex. Vietnam’s legal framework allows shares and land-use rights to be held through nominees. While these arrangements are often legitimate, they create layers of separation between the foreign buyer and the true seller.
This opacity introduces three critical risks. The first is authority risk—negotiating with someone who lacks power to approve or execute. The second is valuation drift, as each intermediary adds expectations or seeks to capture value. The third is regulatory exposure. When beneficial owners remain undisclosed, approvals from ministries or provincial authorities can be delayed or denied.
In a mid-sized logistics acquisition, initial documentation identified a local holding company as the owner. However, deeper due diligence revealed that 51% of the shares had been pledged to a financial cooperative that retained veto rights over any transfer. This relationship had not been disclosed during early negotiations, which disrupted the buyer’s timeline and financing model. By the time the actual controlling party was engaged, valuation expectations had shifted by over 15%.
The lesson is simple: in Vietnam, real control and apparent control are often very different. Failing to distinguish the two is the fastest route to a failed transaction.
Why Nominee Structures Persist—and Why They Matter
Nominee arrangements are neither rare nor inherently improper. In many sectors—particularly real estate, logistics, and regulated industries—companies adopt nominee holdings to navigate foreign ownership restrictions or maintain operational continuity. Sometimes, nominee shareholders help local partners retain an interest while raising capital. Other times, they serve as a convenient method to hold land-use rights or licenses.
However, these structures pose serious challenges for foreign investors.
Even when corporate filings show a Vietnamese entity as the owner, the ultimate controlling party may be offshore, unknown, or fragmented among multiple interests. Nominee directors often lack clear mandates to commit the beneficial owner to warranties, indemnities, or exclusivity periods. If authorities suspect that nominee structures obscure true foreign ownership, they may scrutinize the transaction more intensely or withhold approvals.
A striking example involved a foreign buyer seeking a majority stake in a food production company operating near Hanoi. Negotiations proceeded smoothly for six months. Due diligence later showed that the land certificate remained in the name of a retired relative, held under a nominee agreement drafted informally years prior. Rectifying the discrepancy required a fresh transfer process, which delayed the deal by 11 months and resulted in material price adjustments.
In this environment, real owner access isn’t a procedural detail—it is the foundation of any credible valuation and timeline.
How Proxy Negotiations Undermine Deal Certainty
Beyond the paperwork, proxy negotiations introduce a host of operational and financial risks. When the person presenting the opportunity is not the true decision-maker, misalignment is almost inevitable.
First, expectations diverge. Proxies may promise timelines or valuation ranges that the actual owner has never endorsed. These informal assurances create false confidence and lead buyers to commit time and resources prematurely. When real owners appear late in the process, re-negotiation is all but certain.
Second, momentum erodes. Each layer of communication adds delays, mistranslations, and omissions. The longer it takes to secure clarity, the higher the risk of regulatory changes, currency shifts, or competing bids.
Finally, governance becomes fragile. Even after signing, transactions can collapse if the beneficial owner disputes the proxy’s authority. One high-profile example involved a planned acquisition of a hospitality portfolio in Da Nang. The deal fell apart after signing because the nominee director lacked authority to grant warranties over environmental liabilities. The fallout cost the buyer months of effort and several million dollars in sunk expenses.
These scenarios highlight a simple but often ignored fact: no matter how appealing an asset may be, a negotiation without direct ownership confirmation is speculation, not execution.
Case Study: Bypassing Layers to Secure Real Control
In 2023, a listed foreign conglomerate pursued the acquisition of a logistics hub serving Vietnam’s southern industrial corridor. A local advisory group presented the opportunity, claiming exclusive mandate. While the initial documentation pointed to a mid-sized Vietnamese company as the owner, inconsistencies in signatures and shareholder disclosures raised red flags.
The investor’s team launched a parallel verification process, reviewing the company’s charter, beneficial ownership filings, and internal shareholder resolutions. This revealed that the true controlling interest belonged to a private holding entity linked to a family office in Ho Chi Minh City. That group had not participated in discussions and was unaware of the proposed terms.
To mitigate risk, the buyer restructured its approach. It paused due diligence with intermediaries and initiated direct engagement with the actual controlling shareholders. The resulting framework included a phased acquisition model, initial escrow pending confirmation of beneficial ownership, milestone-based drawdowns tied to regulatory approvals, and contractual warranties provided by the controlling entity itself.
This shift reduced the signing timeline from nine months to 4.5 months. Regulatory processes advanced without objection, and the buyer secured the asset at the originally targeted valuation—protected by enforceable terms aligned with the true economic owner.
This example illustrates why gaining access to the real decision-makers is not simply advantageous in Vietnam—it is often essential to closing.
Building a Framework for Ownership Clarity
For foreign investors, success in Vietnam’s opaque ownership environment requires more than standard diligence. It demands a structured approach that anticipates nominee and proxy complexity:
Ownership verification is essential. Always request notarized shareholder registers, beneficial owner declarations, and power of attorney documents. These should be validated independently rather than relying on representations from intermediaries. Insist on meeting the real owners early. Even in culturally sensitive contexts, face-to-face alignment prevents costly misunderstandings. Link funding to verifiable control transfer. Milestones protect buyers and incentivize sellers to resolve documentation gaps swiftly. Include clauses allowing the buyer to withdraw without penalty if ownership cannot be confirmed by a specified date. Finally, partner with firms that maintain verified networks with actual owners—not just brokers.
A Forward-Looking Perspective: Turning Transparency Into Advantage
Vietnam’s real estate and M&A markets continue to attract global interest. But as competition intensifies and regulations evolve, the premium will increasingly accrue to investors who invest in transparency as rigorously as they invest in assets.
Hidden ownership is not an anomaly—it is a structural reality. Proxy negotiations are not always malicious, but they are inherently risky. In this environment, the discipline to verify, the patience to engage real owners directly, and the foresight to structure protections define successful investments.
Land, facilities, and brands may headline a transaction, but true value lies in unambiguous control. At Lotus Venture, we believe that clarity is not a cost—it is the source of durable advantage in Vietnam’s dynamic market.
For further insights, explore our full library of market perspectives and transaction strategies here.
