For foreign businesses in Vietnam, legal compliance runs throughout the company's entire operating life, across numerous obligations relating to investment, labor, tax, and contracts. Without an in-house legal team, ongoing legal services (a legal retainer) help a business avoid missing any obligation and avoid signing any contract that has not been reviewed.
Have the contracts your company signs each month been legally reviewed? Is your business keeping pace with the new regulations taking effect in 2026, now that both the Law on Investment and the Law on E-Commerce have just changed? These are the issues most easily left unattended at companies without someone responsible for legal matters, and the consequences typically surface only once a dispute arises or a penalty is imposed. The analysis below examines the legal obligations foreign businesses bear, how ongoing legal counsel helps address them, and how the cost compares with the risk.
The web of legal obligations facing foreign businesses in Vietnam
From the moment it is established, a foreign-invested enterprise enters a legal framework different from that of a domestic one. The Law on Investment 2025, effective from 1 March 2026, sets out the concept of market access conditions, meaning that in certain sectors foreign investors must satisfy additional conditions that domestic investors do not.
Compliance does not end at market entry; it follows the business throughout its operations, and most obligations recur on a periodic basis. One of the obligations that foreign-invested enterprises most often forget is the investment reporting regime.
Investment alone already carries deadlines that must be met every quarter and every year. Layered on top are obligations in other areas. In labor, the Labor Code 2019 requires businesses employing 10 or more workers to issue written internal labor regulations and register them with the labor authority, with the filing due within 10 days of issuance. In enterprise registration, when changing details such as the address, legal representative, or charter capital, a business must notify the authority within 10 days. If it operates in a conditional business line, it must also obtain and maintain the corresponding license, alongside the obligation to declare and pay taxes on a monthly, quarterly, and annual basis.
Taken together, this is a web of obligations spanning multiple laws, most of them recurring on a schedule and frequently changing. For a foreign business not yet familiar with Vietnam's legal system and administrative procedures, and facing a language barrier as well, missing a link in the chain is easy to do.
How ongoing legal counsel works and how it differs from hiring a lawyer per matter
Ongoing legal counsel, also known as an outsourced legal department, is an arrangement in which a law practice accompanies a business continuously, acting almost as an in-house legal team but without being on the payroll. Rather than appearing only when a specific matter arises, the lawyer stays close to the company's day-to-day operations.
The biggest difference from hiring a lawyer per matter lies in being proactive. A lawyer engaged per matter is usually called in after the event, once the contract has been signed and the dispute has arisen, so the role is mainly to deal with the aftermath, and the cost of an incident that has already erupted is usually far higher than the cost of prevention. Ongoing counsel takes the opposite direction: the lawyer is present before the problem occurs and, understanding the business over time, spots risks early and handles them while they are still small.
In practice, ongoing counsel is usually implemented in the following sequence:
- Reviewing the company's current legal status: its template contracts, labor records and internal regulations, licensing status, and level of compliance with periodic obligations.
- Agreeing on the scope of work, communication channels, and points of contact, together with bilingual support for teams working in English or Chinese.
- Handling day-to-day matters as they arise: answering queries, drafting and reviewing contracts, advising on labor, internal regulations and discipline, and handling procedures with state authorities.
- Monitoring new regulations that directly affect the business and giving early warning of compliance deadlines, such as the quarterly investment report or the deadline to notify changes to enterprise registration.
The scope of work focuses on ongoing legal support and preventing operational risk, while licensing procedures are usually treated as a separate service.
The risks that accumulate when no one is watching the legal side
Encountering legal risk is common for FDI enterprises, small and medium-sized businesses, and startups, and it usually stems not from doing something wrong but from having no one dedicated to watching. A few situations come up often:
In labor, at many small companies the day-to-day legal work, such as employment contracts, handling discipline, or issuing internal regulations, is left to administrative or HR staff to manage using templates downloaded online. A business employing 10 or more workers that fails to register its internal labor regulations may face an administrative fine of up to VND 20 million for an organization under Decree 12/2022/ND-CP. Where discipline or dismissal follows the wrong procedure, the business also risks losing a labor lawsuit and having to pay compensation or reinstate the employee.
In contracts, when documents with partners are drafted and signed for years by people without the relevant expertise, the flaws tend to lie dormant and surface at the worst possible moment, once a dispute has arisen, when the cost of resolving it can be many times the amount that a review at the outset would have cost.
Another situation is falling behind on new regulations. In 2026 alone there have been major changes: the Law on Investment 2025 took effect on 1 March 2026, and the Law on E-Commerce 2025 took effect on 1 July 2026. For businesses selling through digital platforms, the new law imposes a series of parallel compliance obligations.
A business with no one tracking this stream of regulations can easily violate the rules or miss a compliance deadline without realizing it. For startups and fast-growing companies, when each month brings more contracts signed and more people hired but no one reviewing the legal side, risk accumulates quietly until it crosses a threshold.
Cost and benefit: ongoing counsel, building an in-house team, or hiring per matter
There is no single right choice for every business; the point is to choose the model that fits the company's size and stage of development. Building an in-house legal team offers a fast response, but an experienced legal professional is expensive, while hiring a junior to save money carries the risk of missing important issues, such as reviewing a contract without spotting an unfavorable clause. Hiring a lawyer per matter suits large, one-off tasks, but it is reactive and often costly once an incident has erupted. Ongoing counsel sits in between, at a stable cost, providing someone who stays close and prevents problems continuously.
| Criterion | In-house legal department | Lawyer hired per matter | Ongoing counsel |
|---|---|---|---|
| Proactiveness | High | Reactive, matter by matter | Proactive, preventive |
| Understanding of the business | Deep | Limited, matter by matter | Deepening over time |
| Cost | High and fixed | Variable, high for major incidents | Fixed, moderate |
| Best suited to | Large enterprises | Large, one-off matters | SMEs, startups, mid-sized FDI |
Set the cost of ongoing counsel against the risks a business may face, an administrative fine of a few tens of millions of dong, a labor dispute, or a flawed contract that causes loss, and the spend on prevention is usually many times smaller than the cost of dealing with the consequences. The notion that only large companies need legal support is therefore a misconception, because it is precisely small and medium-sized businesses, where no one is dedicated to watching risk, that are the most vulnerable.
DEDICA as your outsourced legal department
Ongoing legal counsel is one of DEDICA Law Firm's core services, accompanying a business like an in-house legal department at a lower cost than building one internally. The difference lies in how the team is organized: legal staff work alongside experienced lawyers, and the product delivered to the client, whether an advisory opinion or a reviewed contract, is always checked by an experienced lawyer before hand-over, which is safer for the business than relying on a single junior legal hire.
The scope of support ranges from answering and handling day-to-day issues, drafting and reviewing contracts, and advising on labor, internal regulations and discipline, through to compliance review and updates on new regulations that directly affect the business. When larger matters arise, such as disputes, mergers and acquisitions, license adjustments, or intellectual property, clients are connected to DEDICA's other specialized services, together with bilingual English and Chinese support for foreign businesses.
Conclusion
In Vietnam, a company's legal obligations recur and stack up: quarterly and annual investment reports, issuing and registering internal labor regulations once it has 10 or more employees, notifying changes to enterprise registration within 10 days, periodic tax filings, along with a constant stream of new regulations such as the Law on Investment 2025 and the Law on E-Commerce 2025. The three most common risks when no one is watching are handling labor matters through the wrong procedure and being fined or losing a lawsuit, flawed contracts accumulating until a dispute exposes them, and missing compliance obligations by failing to keep up with new regulations. A practical path is to review the current legal status once to see it clearly, then maintain a single lawyer contact who stays close to the business, rather than waiting until an incident occurs to find someone to handle it.
If your business is operating in Vietnam without anyone dedicated to watching legal risk, DEDICA Law Firm can quickly review your current status and propose a scope of ongoing counsel suited to your company's size and stage, with bilingual English and Chinese support. Contact DEDICA to start with a conversation about the specific risks your business is facing.
This article is for reference based on the law in effect at the time of writing. Each business faces a different level and type of legal risk; please consult a DEDICA lawyer for advice specific to your situation.
