In August 2026, Vietnam’s Ministry of Industry and Trade released a draft decree to replace Decree No. 35/2020/ND-CP detailing certain articles of the Competition Law (Decree 35). The key changes under the draft decree and their implications for M&A transactions in Vietnam are summarized below.

Definition of “Management Body”

Decree 35 uses the term “management body” (bộ phận điều hành) as one of the criteria to determine the group of affiliated enterprises for the purpose of merger filing. However, there is no definition of the term, leaving enterprises without a basis on which to apply it consistently. The draft decree introduces a statutory definition of “management body,” being a person or group of persons who (i) own more than 50% of charter capital or voting shares; (ii) hold ownership or use rights over more than 50% of an enterprise’s assets; (iii) are an enterprise manager under enterprise law; or (iv) have decision-making power over the enterprise’s resolutions, daily business operations, or business and investment plans. This helps enterprises better assess the scope of merger filing.

Determination of Relevant Product Market

Under Decree 35, the relevant product market is defined solely by reference to goods and services interchangeable in characteristics, intended use, and price without accommodating digital or zero-price products. The draft decree expands the relevant product market to include “products” (sản phẩm) in addition to traditional “goods and services,” which captures digital information products, AI products, and other novel offerings. Additionally, it adds “other relevant competitive factors” such as quality of products, goods, and services for determining the relevant product market, supplementing the existing factors of characteristics, intended use, and price. This addresses cases where price substitutability is not meaningful for certain consumers or users, i.e., zero-price products.

Determination of Relevant Geographic Market

Under Decree 35, only physical geographic area is referenced for determining the relevant geographic market. The draft decree introduces the concept of “spatial scope” (phạm vi không gian) alongside geographic area, recognizing that competition in digital markets transcends physical borders. In addition, it also looks at the ability of customers to access, purchase, and use products in adjacent areas or spatial scopes. These two new additions help address businesses on digital platforms.

More importantly, the assessment methodology shifts from evaluating “each of” the listed factors to “some of” them, granting the National Competition Commission (NCC) flexibility to select factors appropriate to each case.

Principles for Determining Enterprise Market Share

Decree 35 prescribes methods for determining market share but provides no underlying definitions. The draft decree provides that market share may be determined using “one or more” methods prescribed in the Competition Law, rather than “one of” them. The draft decree further defines “purchase turnover,” “sales revenue,” and, notably, “transaction value,” including a specific provision for digital platforms (total value of transactions conducted on the platform).

Other Forms of Economic Concentration

Decree 35 contains no provisions on “other forms of economic concentration,” leaving a regulatory gap despite an enabling provision under Article 29.1(dd) of the Competition Law. The draft decree defines other forms of economic concentration as referred to in this provision to include (i) joint control—where two or more enterprises agree to jointly decide over another enterprise without any single enterprise having unilateral decision rights; (ii) establishment of a common management body; and (iii) acquiring control through agreements or other means besides purchasing equity or assets. These new transaction types will be subject to merger filing requirements.

Exemptions from Merger Filing Requirements

Decree 35 provides no exemptions from the merger filing requirements, with the result that all transactions meeting the reportable thresholds are subject to merger filing. The draft decree introduces four exemptions from the notification requirement: (i) where the acquirer already owns more than 50% of voting capital of the target; (ii) where all participating enterprises are owned (>50% voting capital) by the same parent; (iii) where JV partners already own more than 50% of each other’s voting capital; and (iv) where the prime minister has already approved the transaction. Item (iv) is intended to apply where the prime minister approves transactions for state interests. These carve-outs address intra-group restructurings with no change to market structure.

Reportable Thresholds

To reflect Vietnam’s GDP growth, the reportable thresholds are substantially increased compared to Decree 35. The thresholds for total assets and revenue in Vietnam rise from VND 3,000 billion to VND 6,000 billion, and the transaction value threshold rises from VND 1,000 billion to VND 2,000 billion. However, the combined market share threshold remains at 20%. These changes make permanent the temporary administrative relief provided in Resolution 66.18/2026/NQ-CP dated May 18, 2026.

Preliminary Review of Economic Concentration (Phase 1)

Currently, Decree 35 provides Phase 1 clearance for any transaction where:

• The parties’ combined market shares are below 20% of the relevant market;
• The parties’ combined market shares are 20% or more, but the post-transaction Herfindahl-Hirschman Index (HHI—calculated as the sum of squared market shares) is below 1,800;
• The parties’ combined market shares are 20% or more and the post-transaction HHI is more than 1,800, but the increase in HHI is less than 100;
• The parties are related to each other in the production, distribution, or supply chain for a particular type of goods or services, or the business lines of the parties that serve as inputs or are complementary to each other and each party’s market share is less than 20% of the relevant market.

The draft decree expands and reorganizes the categories of transactions eligible for Phase 1 clearance. First, it allows Phase 1 clearance for transactions where the parties neither operate in the same relevant market nor participate at different levels of the same production, distribution, or supply chain, and where their businesses are neither inputs to nor complementary with one another.

Second, it allows Phase 1 clearance for transactions where parties operate in the same relevant market and participate at different levels of the same production, distribution, or supply chain for a particular type of goods or services, or the business lines of the parties serve as inputs to or are complementary to each other, only when the transaction simultaneously satisfies both of the following:

• Each party’s market share is less than 20% of the relevant market; AND
• Any of the following: (i) the parties’ combined market shares are below 20% of the relevant market; (ii) the parties’ combined market shares are 20% or more, but the post-transaction HHI is below 1,800; or (iii) the parties’ combined market shares are 20% or more and the post-transaction HHI is more than 1,800, but the increase in HHI is less than 100.

The new language provides guidance for parties to self-classify their transactions and focuses on the NCC’s assessment to ensure speedy resolution of the Phase 1 review.

Amendment or Termination of Conditional Merger Approvals

The draft decree introduces a mechanism for enterprises to petition the NCC to amend or terminate conditions imposed in a conditional merger approval. Accordingly, the enterprises may argue that (i) a change in law renders conditions impossible or inappropriate; (ii) the enterprise’s market share falls below 20% for two consecutive years post-merger; or (iii) the HHI on the relevant market falls below 1,800 for two consecutive years. The NCC must consider and respond within 60 days.

Outlook and Practical Implications

The draft decree is scheduled to be submitted to the government by the end of October 2026. The new decree is expected to be promulgated and take effect before February 28, 2027, when Resolution No. 66.18/2026/NQ-CP expires, to maintain continuity.

Under the draft decree, fewer filings will be required, but the regime will cast a wider net. The higher thresholds and new exemptions will cut the volume of notifiable transactions, particularly for intra-group reorganizations, while the new forms of economic concentration and the newly defined management body and group of affiliated enterprises concepts pull in transactions that previously sat outside the regime, including control acquired without any purchase of equity or assets.

The introduction of the two additional circumstances for Phase 1 clearances also enhances legal certainty by providing clearer guidance, allowing parties to better assess their filing strategy and anticipate review process at an early stage.

The new petition mechanism gives holders of conditional approvals a route to ask the NCC to amend or terminate conditions when the implementation is impossible or the parties no longer hold market power.