Greenfield vs Brownfield Investment in Vietnam

Identify the investment perimeter

Start by naming the transaction object: a company, selected assets, an investment project, or access to a facility. Those objects carry different evidence and approval requirements. “Greenfield” and “brownfield” describe commercial investment patterns; they are not separate Vietnamese company forms or a choice between foreign and Vietnamese ownership.

In its discussion of entry modes, the Government of Canada describes brownfield investment as buying or leasing existing facilities, including through mergers and acquisitions. The OECD’s FDI classification separately distinguishes new investment, capacity expansion and acquisitions. These descriptions help frame a project, but neither establishes the Vietnamese legal route for your transaction.

The hybrid option is especially useful when the factory is suitable but the operating company is not. Conversely, buying a company may be worthwhile where customer approvals, a technical team and established processes are difficult to recreate. A new company does not necessarily mean a new factory. Keep the physical perimeter and the legal perimeter in separate columns of the investment paper.

Test what survives the transaction

Use a continuity ledger to remove advantages that exist only in a seller presentation. For each item, record the evidence inspected, its owner, the action needed at closing and the consequence if it fails. The ledger below is a planning tool, not a statement that every listed consent is legally required.

For a share purchase, the target remains the contracting entity, but that does not establish that every licence, finance agreement or customer arrangement is unaffected by a change of ownership. For an asset purchase, do not assume that the seller’s contracts or permits accompany the equipment. Check the underlying instrument and applicable rule for each critical item.

Mark each row “verified”, “fixable before operation” or “unresolved”. These are diligence conclusions, not official approval statuses. Give immediate operating value only to the first category. Assign a named action, cost allowance and dependency to the second. Where the investment thesis depends on the third, postpone the decision or compare a replacement plan. Unverified continuity is not a saving.

A route comparison becomes clearer when the same operating requirement is followed through both alternatives. The brownfield branch earns a time advantage only after reuse is established; the greenfield branch earns design freedom only if the startup plan can deliver it.

Check Vietnam’s approval gates

Foreign investors should screen access before negotiating an unconditional commitment. Article 8 of the 2025 Law on Investment makes market access dependent on the activity and relevant conditions, including permitted ownership and investment form. Reusing a Vietnamese business does not override those conditions. Align the proposed products, services and ownership chain with the market-access tests for the intended investment before treating either route as available.

New company and new project

Article 19 permits a foreign investor to establish an economic entity before the investment-certificate procedure, subject to market access. Decree 296/2026 , effective July 23, 2026, implements the company-first enterprise dossier exception, including the market-access commitment. This changes sequencing; it does not remove project approvals. Articles 26 and 29 still require an Investment Registration Certificate (IRC) before implementation for covered projects, and investment policy approval where applicable.

An Enterprise Registration Certificate (ERC) establishes the registered enterprise; an IRC records the investment project. For a new entity using an existing building, company formation requirements in Vietnam therefore remain relevant even though construction is reduced. Confirm the project, site and permitted operating scope separately from the company’s incorporation.

Equity acquisition and project transfer

Article 21 requires acquisition registration before member or shareholder changes in specified cases: increased foreign ownership in conditional-access activities; crossing from 50% or below to above 50%, or increasing an already above-50% holding in the specified ownership cases; and specified sensitive-land holdings. Article 26 excludes the equity investment itself from IRC issuance, which does not settle the target’s separate project obligations.

For an investment-project transfer, Articles 33–34 require the relevant transfer conditions and, for covered projects, project-adjustment procedures. Land, housing or real-estate conditions and existing project approvals can affect the result. An asset sale agreement cannot substitute for a required project transfer. Map the chosen transaction against these provisions before fixing its closing conditions.

A separate competition check

Merger control is another screen, distinct from foreign-investment registration. The Ministry of Industry and Trade confirms changes to notification thresholds from July 1, 2026 for the general regime, with financial-sector exceptions. The temporary resolution’s effective period runs through February 28, 2027, subject to the applicable transition and subsequent rules. Assess the proposed concentration and relevant group figures before closing; a modest target price alone does not establish that no filing is needed.

Compare cash and delay to readiness

Compare the routes at the same milestone: an operation able to deliver the required product or service with the necessary rights, people and systems. A company registration date and an acquisition signing date are not comparable endpoints. Neither proves operational readiness.

For greenfield, the cash model should include site access, fit-out or construction, equipment, professional and official charges, recruitment, commissioning and cash consumed before customer receipts. For brownfield, separate seller consideration from cash that actually reaches the operating business. Add due diligence, transaction work, refurbishment, compliance remediation, retention, systems integration and working-capital replenishment. Record VAT and transaction-tax treatment separately after deal-specific tax review; do not assume one blanket rate.

Keep purchase consideration and operating cash separate. Paying the seller for shares does not itself fund payroll, inventory or repairs. Equally, charter capital is company funding rather than a government fee. Avoid counting the same cash twice when reconciling equity, debt, available cash and planned capital injections.

Build a dependency schedule rather than assigning a generic number of weeks to each route. For brownfield, identify the latest of required approvals, critical consents, equipment acceptance and remediation completion. For greenfield, identify the dependencies around site readiness, project approvals, commissioning and customer qualification. These are planning milestones, not statutory processing periods.

Run a downside case by removing one supposedly inherited advantage, such as a key contract or a usable production line. Then recalculate cash needed before receipts and the operating start date. If the brownfield case only works when every optimistic assumption survives, its apparent speed or price advantage is fragile. Request scope-specific estimates instead of applying a universal Vietnam acquisition or setup price.

Turn findings into conditions and handover

Translate the ledger into a short responsibility schedule before negotiating the final documents. Every material gap needs a responsible party, evidence of completion, a deadline and a consequence if unresolved. Legal, tax, technical and environmental specialists should examine their respective risks; one commercial checklist cannot establish all of them.

1. Freeze the perimeter. List the equity, assets, contracts, project rights and excluded items precisely, with records that identify the legal owner.
2. Separate signing from implementation. Identify required registrations, approvals and critical consents; structure the agreement so parties do not implement the deal prematurely.
3. Allocate discovered exposure. Consider seller remediation, a price adjustment, retention or indemnity where legally appropriate; assess whether the protection is collectible and enforceable.
4. Specify the operating handover. Agree access to premises, equipment acceptance, records, systems, key people and customer communications, including authorised control of company accounts.
5. Verify the closing file. Reconcile executed transaction documents, applicable official outputs, updated company or project records, payment evidence and the agreed completion checklist.

For greenfield, use the same discipline with landlords, equipment vendors and contractors. Define acceptance tests and the documents needed to use the site and equipment as intended. This prevents a fresh start from becoming an open-ended construction or commissioning commitment.

For brownfield, a certificate folder is only part of the handover. Check that the operating team can access records and systems, understand outstanding obligations and manage the transition. Preserve supporting diligence records and assign owners for post-closing actions. Where an approval or critical right is missing, change the implementation plan rather than merely recording a promise to obtain it later.

Choose usable capacity over a route label

Choose greenfield when the scarce resource is a process, layout or control system that the available targets cannot supply economically. Choose brownfield when the scarce resource is proven usable capacity, a defensible commercial platform or an effective team that would take significant effort to recreate. Consider a new company in an existing facility when reuse is valuable but acquiring the operator is not.

Make the first investment decision conditional on evidence: a defined perimeter, an available foreign-investor route, a completed continuity ledger and a funded readiness plan. Stop if the business case relies on a licence, land right or revenue stream whose continued use cannot be established. The best route is the one that delivers the required Vietnam operation with risks you can identify, price and manage.