Pricing and payment methods for technology transfer under Vietnamese laws: What enterprises should note during contract negotiations?

On 31 March 2026, the Government officially issued Decree 101/2026/ND-CP providing detailed regulations on several articles and measures to guide the implementation of the Law on Technology Transfer, effective from 01 April 2026 (“Decree 101”).

In this article, BLawyers Vietnam presents key notes from Decree 101 regarding pricing and payment methods in technology transfer, helping domestic and foreign enterprises gain a clearer understanding during the contract negotiation stage, as this is crucial content for investment and Merger and Acquisition (M&A) activities, among others.

1. Why are regulations on technology transfer price and payment methods particularly important?

According to Vietnamese laws, technology transfer is not merely the assignment or transfer of the right to use technology. In practice, this activity is tied to the long-term development strategy of an enterprise aimed at applying technology to create products, services, or new production methods. Transfer price and payment methods are also vital factors, as they directly affect cash flow, tax obligations, capital structure, and even the ability to control the technology-receiving enterprise.

Previously, many technology transfer contracts in Vietnam were drafted quite loosely regarding payment mechanisms, leading to disputes or difficulties in tax finalization, or being questioned by regulatory authorities regarding transfer price. Although not explicitly defined here, it can be understood that transfer price typically occurs in cross-border affiliated transactions, or within a country, to conduct transactions at non-market prices in order to minimize tax obligations. Therefore, the introduction of Decree 101 at this time aims to increase transparency and standardize the aforementioned transactions.

2. Technology transfer payment methods permitted by law

According to Decree 101, parties involved in a technology transfer contract may agree to choose payment via one or several different methods, provided they comply with the law. These methods include:

1. First, a lump-sum payment or installment payments in cash or goods, which includes payments calculated based on each unit of product manufactured from the transferred technology. This is a common model in manufacturing technology transfer contracts.
2. Second, converting the value of technology into capital contribution to an investment project or into the capital of an enterprise. This method is increasingly popular in joint ventures, tech startups, or M&A transactions. However, if the capital contribution is made using technology that uses state capital, the technology must undergo a valuation in accordance with the law.
3. Third, payment based on a percentage, using 03 different financial indicators, including:
   1. Payment based on a percentage (%) of net selling price: Net selling price is determined by the total selling price of products or services created with the application of the transferred technology (based on sales invoices) minus items such as taxes, sales costs, transportation, and specified advertising costs.
   2. Payment based on a percentage (%) of net revenue: Net revenue is determined by the revenue from selling products or services created with the transferred technology, minus revenue deductions including trade discounts, sales rebates, and sales returns. However, this point raises a question: How can the transferor have a mechanism to monitor the transferee’s revenue?
   3. Payment based on a percentage (%) of pre-tax profit: Pre-tax profit is determined by net revenue minus total reasonable costs to produce products or services applying the transferred technology that have been sold on the market. Additionally, parties may agree on payment based on a percentage of after-tax profit. One potential risk is: What constitutes “reasonable costs” for auditing and verifying relevant data?
4. The Government also allows enterprises to combine the above methods for flexibility in payment or have other agreements consistent with the law. In reality, enterprises are flexible in payment methods to balance interests and risks in transactions. This also means that contracts need to be carefully designed.

3. What should be noted regarding valuation when transactions involve state capital or parent-subsidiary relationships?

Articles 18.2 and 18.3 of Decree 101 specify two cases requiring strict control over technology transfer price:

1. First, in cases where technology is created using state capital or purchased using state capital, and is transferred between parties where one or more parties involve state capital, the valuation must be performed based on technology valuation consultancy in accordance with the law.
2. Second, in cases of technology transfer between parties with a parent-subsidiary relationship and parties with an affiliated relationship under tax law. In these cases, upon request from the tax management authority, a price audit will be conducted through technology valuation.

Accordingly, the parties’ agreement to select a technology valuation organization is crucial in preparation activities. According to the Law on Technology Transfer 2017, technology valuation is one of the types of technology transfer services, and it is a consultancy activity to determine the value of the technology being valued at a specific location and time for a certain purpose, performed by a valuation enterprise or a valuation council in accordance with Vietnam Valuation Standards. Organizations performing this activity are science and technology organizations or enterprises operating in the fields of assessment, valuation, and inspection of technology; they must meet specific conditions regarding human resources, facilities, and possess a certificate of eligibility for such operations.

Support from BLawyers Vietnam: What should enterprises prepare?

With experience as a legal consultant and representative for clients in dispute resolution, BLawyers Vietnam has observed that many risks in technology transfer contracts do not stem from the technology itself, but from the design of pricing mechanisms and payment methods appropriate to the characteristics of the parties. Accordingly, enterprises should note the following points, as well as the legal support from our side:

1. At the negotiation stage, parties should choose a payment method suitable for their business model and cash flow. At this stage, BLawyers Vietnam will provide legal advice based on the parties’ business records and data, as well as the actual needs and orientation of the enterprise.
2. At the contract drafting stage, it is necessary to clearly define revenue, profit, and costs. Accordingly, BLawyers Vietnam will support drafting, reviewing contracts, and negotiating content to ensure client interests and compliance with Vietnamese law.
3. Establishing auditing, reporting mechanisms, and data inspection rights. Based on advice from BLawyers Vietnam, as well as our relationships with accounting and auditing service providers, clients will easily identify “reasonable costs” from data to determine the appropriate payment method.
4. Fulfilling valuation obligations in cases involving state capital or parent-subsidiary relationships. BLawyers Vietnam assists in finding legitimate organizations, verifying valuation data, and supporting the accurate reporting of this information to clients.

The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at info@blawyersvn.com. BLawyers Vietnam would love to hear from you.

Date: 05 May 2026

Writer: Thanh Huynh