When foreign-invested enterprises (FDI companies) establish and operate in Vietnam, legal compliance quickly becomes one of the most critical aspects of business management. Investment regulations, enterprise law, labor compliance, tax-related legal issues, licensing conditions, and reporting obligations all require ongoing attention.
This leads many foreign investors to ask an important question: Is an FDI company legally required to have an in-house legal department in Vietnam?
And if not, what is the most effective way to manage legal risks on a daily basis?
This article clarifies the legal requirements and explains why many FDI companies choose ongoing legal consultancy instead of building an internal legal team.
Under Vietnamese law, there is no general legal requirement for FDI companies to establish an in-house legal department.
Vietnamese regulations do not mandate that enterprises—whether domestic or foreign-invested—must employ internal legal counsel as part of their organizational structure. In other words, an FDI company can legally operate in Vietnam without a formal legal department or in-house lawyer.
However, the absence of a legal obligation does not mean the absence of legal responsibility.
FDI companies are still required to:
Fully comply with Vietnamese laws and regulations;
Properly manage legal risks arising from daily operations;
Respond accurately to inspections, audits, and authority requests;
Ensure compliance with investment, labor, tax, and sector-specific rules.
The key issue is how these obligations are managed in practice.
Compared to local enterprises, FDI companies face additional layers of legal complexity, including:
Investment Registration Certificate (IRC) compliance
Enterprise Registration Certificate (ERC) obligations
Foreign ownership and market access restrictions
Mandatory investment reporting
Sector-specific licensing conditions
Cross-border payments and foreign exchange regulations
Employment of foreign employees
These requirements are not one-time tasks. They apply throughout the lifecycle of the business and often change due to new laws or evolving enforcement practices.
As a result, even though an in-house legal department is not mandatory, continuous legal oversight is essential for FDI companies operating safely in Vietnam.
Many FDI companies initially rely on accounting firms, HR staff, or management teams to handle legal matters. While this may work in the early stages, it often creates hidden risks over time.
Common issues include:
Operating beyond licensed business lines without realizing it
Using contracts that are unenforceable under Vietnamese law
Improper labor contracts or termination procedures
Missed investment reports or late submissions
Incorrect responses during inspections or audits
These problems rarely appear immediately. They often surface during labor disputes, tax inspections, or when the company plans to expand, restructure, or exit the market.
For many FDI companies—especially SMEs or newly established entities—hiring a full-time in-house lawyer is not cost-effective.
An in-house legal position involves:
Fixed salary and benefits
Recruitment and onboarding costs
Ongoing training and supervision
Limited coverage across specialized legal areas
Even with an in-house lawyer, companies often still need external law firms for specialized matters such as disputes, M&A, or regulatory issues.
This makes in-house legal teams a high fixed cost with limited flexibility, particularly for businesses with fluctuating legal needs.
Because an in-house legal department is not mandatory, many FDI companies in Vietnam choose ongoing legal consultancy as a more flexible and efficient solution.
Under this model, a law firm acts as the company’s outsourced legal department, providing continuous legal support on a monthly or annual basis.
The legal team becomes familiar with the company’s:
Business model and operations
Industry-specific regulations
Risk profile and compliance priorities
This allows legal advice to be proactive, practical, and aligned with business objectives.
An ongoing legal consultancy service typically supports FDI companies in the following areas:
FDI companies regularly face operational decisions with legal implications. Ongoing legal support allows management to seek advice before decisions are finalized, reducing compliance risks.
Contracts with suppliers, customers, partners, and headquarters require careful legal review to ensure enforceability under Vietnamese law, especially for bilingual or cross-border agreements.
FDI companies must comply with strict labor regulations, including employment contracts, social insurance, and foreign employee work permits. Ongoing legal support helps prevent labor disputes and penalties.
Changes in capital, shareholders, legal representatives, or business activities often require legal procedures. Ongoing legal consultants ensure timely compliance with IRC and ERC obligations.
FDI companies are subject to recurring investment reports and regulatory updates. Ongoing legal support helps ensure no reporting obligation is missed.
FDI companies choose ongoing legal consultancy because it offers:
Predictable legal costs through fixed monthly fees
Access to a legal team, not just one individual
Flexibility as legal needs change
Proactive risk prevention, not just reactive advice
Local legal expertise aligned with Vietnamese regulations
This model allows foreign investors to focus on business operations while maintaining strong legal compliance.
FDI companies should seriously consider ongoing legal consultancy when:
They begin daily operations after incorporation
They hire employees or expatriates
They sign contracts regularly
They operate in regulated sectors
They plan expansion, restructuring, or exit strategies
In practice, engaging legal support early significantly reduces long-term legal risks and costs.
DEDICA provides ongoing legal consultancy services tailored specifically for foreign-invested enterprises operating in Vietnam.
As an outsourced legal department, DEDICA supports FDI companies by:
Providing continuous legal advice for daily operations
Reviewing contracts and transactions proactively
Supporting labor, investment, and corporate compliance
Monitoring legal changes affecting foreign investors
Acting as a long-term legal partner for management teams
DEDICA’s approach is practical, bilingual, and prevention-focused, helping FDI companies operate confidently in Vietnam’s complex legal environment.
Vietnamese law does not require FDI companies to establish an in-house legal department. However, the legal responsibilities of foreign-invested enterprises are extensive and ongoing.
For many FDI companies, ongoing legal consultancy is the most effective way to manage legal risks without the cost and rigidity of hiring in-house counsel.
By outsourcing legal support to a trusted law firm, FDI companies gain continuous compliance protection, flexible expertise, and peace of mind.
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
Contact us today for a free initial consultation with our experienced lawyers!
Select a platform to view details
