Vietnam is entering a new phase of state-owned enterprise reform. But investors should not mistake it for a repetition of the high-profile equitisation wave of 2016–2018.
The earlier cycle was remembered internationally for transactions involving highly recognizable and commercially accessible businesses, including major consumer, food and beverage, and financial-sector assets. Companies such as Sabeco and Vinamilk offered business models that international investors could readily understand, benchmark and value.
The new phase is fundamentally different.
Decision 40/2026/QĐ-TTg, effective from 5 August 2026, signals a more mature and strategically differentiated approach to state ownership. Rather than treating divestment primarily as the disposal of state assets, Vietnam is increasingly asking a more important question:
Where does the State genuinely need to retain control, and where can private capital allocate resources more efficiently?
That distinction could define the next chapter of Vietnam’s economic transformation.
From Equitisation to Strategic Capital Allocation
The significance of Decision 40 lies in its differentiated approach to state ownership.
The framework establishes varying levels of state ownership—including 100%, at least 65%, and between 50% and 65%—depending on the strategic importance of the relevant sector and enterprise.
This represents more than an administrative classification exercise. It reflects a deliberate attempt to redraw the boundary between the State and the market.
Vietnam intends to preserve substantial state influence in sectors considered essential to national security, critical infrastructure, public services and other strategically important areas. At the same time, the State can progressively reduce its footprint in sectors where private capital, competition and commercial management may deliver greater efficiency.
The philosophy is therefore changing.
The question is no longer simply: What can the State sell?
Increasingly, it is: Where should state capital remain invested, and where could that capital be deployed more productively elsewhere?
This is an important evolution from administrative ownership toward strategic capital management.
A Different Investor Universe
The change in the assets coming to market will inevitably change the universe of potential buyers.
During the previous major equitisation cycle, consumer-facing businesses and financial institutions could attract a relatively broad range of strategic investors, private equity firms and portfolio investors.
Energy, infrastructure, logistics, telecommunications and other capital-intensive businesses are different.
These assets require longer investment horizons, greater technical expertise, substantial capital commitments and, frequently, a sophisticated understanding of Vietnam’s regulatory environment.
The natural investors are therefore likely to include global infrastructure funds, sovereign and pension capital, energy developers, industrial groups and strategic investors seeking long-term exposure to Vietnam rather than short-term financial returns.
The buyer universe may consequently be narrower—but potentially also deeper and more sophisticated.
For the right investor, access to strategic infrastructure in one of Asia’s most dynamic economies can be considerably more valuable than acquiring another conventional consumer business.
The Minority Investor Problem
The central challenge, however, is not simply whether international investors find these assets attractive.
It is whether they will be comfortable investing substantial capital without obtaining meaningful operational control.
Where the State retains 65% or another controlling interest, foreign investors may remain structurally minority shareholders. That creates an obvious tension.
International investors—particularly infrastructure funds and strategic operators—typically expect strong governance rights, transparent decision-making, protection against related-party transactions, predictable dividend policies, access to management information and meaningful participation in major corporate decisions.
The issue therefore extends beyond the percentage of shares being offered.
A 35% interest with robust governance protections may be considerably more attractive than a larger economic interest with limited influence over how the company is actually managed.
Vietnam’s next SOE reform challenge is consequently not only ownership reform. It is governance reform.
The more the State wishes to attract sophisticated international capital while retaining control, the more important minority shareholder protections, board governance and commercial autonomy become.
Energy and Infrastructure Raise the Bankability Test
This issue becomes particularly important in energy and infrastructure.
Global developers and lenders do not invest on the basis of policy ambition alone. They invest in projects that are bankable.
That requires predictable regulation, commercially workable contracts, credible revenue mechanisms, manageable permitting risk and sufficient operational flexibility.
Vietnam’s evolving Direct Power Purchase Agreement framework illustrates the point. International energy investors increasingly evaluate opportunities not simply according to installed capacity or market growth, but according to whether electricity can be sold, financed and contracted under structures capable of satisfying lenders and investment committees.
If a state-controlled enterprise remains subject to lengthy approval processes, overlapping administrative requirements or limited managerial autonomy, private investors may discount the asset regardless of its strategic importance.
The success of this divestment cycle will therefore depend partly on whether Vietnam can combine continuing state ownership with genuinely commercial corporate governance.
Why the Assets Can Still Be Highly Attractive
Despite these challenges, the investment proposition remains compelling.
Vietnam continues to benefit from the restructuring of global supply chains and multinational companies’ efforts to diversify manufacturing and sourcing beyond China.
That makes infrastructure, logistics, energy, ports, industrial services and digital connectivity increasingly valuable.
These are not merely individual companies. They are part of the operating architecture supporting Vietnam’s next phase of industrialisation.
For a strategic investor, obtaining an equity position in such businesses can provide long-term exposure to Vietnam’s economic expansion that may be difficult to replicate through greenfield investment alone.
The attraction should therefore be viewed over a ten- or twenty-year horizon rather than through the lens of a conventional private-equity exit cycle.
The Emerging-Market Effect
There is also a broader capital-market dimension.
Vietnam’s anticipated transition under the FTSE Russell market-classification process has the potential to alter the profile of international capital entering the country.
The significance extends beyond the immediate passive inflows associated with index inclusion. A stronger emerging-market profile can increase Vietnam’s visibility among global institutional investors, asset managers, pension funds and other long-duration investors.
This could be particularly important for partially privatised SOEs.
Well-governed companies operating in infrastructure, energy transition, logistics, telecommunications, digital infrastructure and advanced industries could become attractive vehicles through which international institutional investors obtain exposure to Vietnam’s structural growth.
SOE reform and capital-market development should therefore not be viewed separately. Properly executed, they can reinforce each other.
Valuation Remains the Hardest Problem
There is, however, one issue capable of frustrating even the strongest investment thesis: valuation.
SOE valuations are inherently sensitive because the authorities and individuals involved must ensure that state assets are not transferred below their proper value.
That objective is entirely understandable.
The difficulty is that public-sector and private-sector investors may approach valuation from very different directions.
State valuations frequently place considerable emphasis on historical assets, book values and tangible property. Land-use rights can be particularly difficult because their legal, accounting and commercial treatment may materially affect the valuation.
Private investors, by contrast, are principally interested in future cash flow.
They ask different questions:
What return can the business generate?
How much additional capital expenditure will be required?
What operational efficiencies can be achieved?
What regulatory risks remain?
What is the value of the company’s market position?
And, crucially, what discount should be applied if the investor acquires a minority position without operational control?
The resulting valuation gap can be substantial.
Land Can Become the Deal Breaker
Land deserves particular attention.
Many Vietnamese SOEs have accumulated significant land-use portfolios over decades. Their underlying operating businesses may therefore be relatively straightforward to value, while the land attached to them creates enormous complexity.
Investors need certainty regarding land-use purposes, duration, payment arrangements, redevelopment possibilities, historical compliance and the consequences of equitisation or ownership changes.
Without that clarity, land can transform from an attractive balance-sheet asset into a transaction risk.
A successful divestment framework must therefore establish credible mechanisms for dealing with land before assets are brought to market rather than leaving fundamental land questions to emerge during investor due diligence.
Bridging the Valuation Gap
Vietnam does not need to choose between protecting state assets and attracting private capital.
It needs mechanisms capable of achieving both.
Greater reliance on internationally recognized independent valuation methodologies could help bridge the divide between public-sector accountability and market reality.
Transparent competitive processes are equally important. Ultimately, one of the strongest indicators of value is what credible, properly informed investors are prepared to pay through a competitive process.
But valuation cannot be separated from transaction structure.
If the State wishes to retain control, the value of the minority interest will depend heavily on the governance rights accompanying it. Board representation, reserved matters, information rights, dividend policy, transfer rights and exit mechanisms can materially influence what sophisticated investors are willing to pay.
Governance therefore becomes part of valuation.
What Vietnam Should Do Next
For this new SOE divestment phase to achieve its full potential, Vietnam should focus on five priorities:
- Prepare assets before bringing them to market. Land, licensing, tax, corporate and regulatory issues should be identified and resolved as far as possible before investors begin due diligence.
- Strengthen minority shareholder protections. If the State retains control, credible governance rights will be essential to attracting sophisticated strategic and institutional capital.
- Use internationally credible valuation methodologies. Valuation must protect state assets while reflecting future cash flows, commercial realities and the economic consequences of minority ownership.
- Increase management autonomy. Partially privatised SOEs must be able to operate commercially rather than simply reproducing public-sector administrative processes within a corporate structure.
- Treat divestment as part of Vietnam’s wider capital-market strategy. SOE reform, infrastructure investment, energy transition and Vietnam’s emerging-market ambitions should form part of one coherent investment narrative.
The Bigger Story
Decision 40 should ultimately be viewed as part of a much larger transformation.
Vietnam’s economic success over the coming decade will depend not simply on how much state capital it sells, but on how intelligently capital is allocated across the economy.
The most successful SOE reform will therefore not necessarily be the one producing the highest immediate proceeds for the State.
It will be the one that places assets with investors capable of improving productivity, technology, governance and competitiveness while allowing state capital to be redirected toward areas where it is genuinely needed.
That is the fundamental difference between privatisation as an asset sale and divestment as economic strategy.
Vietnam has an opportunity to move decisively toward the latter.
If it succeeds, this new divestment wave could prove considerably more important than the headline transactions of a decade ago—not because the assets are easier to sell, but precisely because they sit closer to the foundations of Vietnam’s future economy.
***
For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under [email protected]. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.