The number of foreign enterprises in Vietnam is increasing rapidly. Alongside attractive business opportunities, however, are numerous hidden legal risks. Are you sure your company is fully compliant with Vietnamese law, or will problems only surface when inspections, penalties, or even suspension of operations occur?
Vietnam is an attractive destination for foreign investors thanks to its dynamic business environment, competitive costs, and favorable FDI policies. In practice, many foreign enterprises in Vietnam face difficulties not because of the market, but because they fail to anticipate legal risks from the outset.
These risks often do not arise immediately upon establishment but gradually accumulate during operations. When disputes, inspections, or regulatory changes occur, enterprises may suddenly realize they are facing serious risks such as loss of rights, heavy penalties, or damage to their reputation.
Many foreign enterprises believe that obtaining an Investment Registration Certificate is sufficient to operate legally. However, this is only the first step.
Common legal risks include:
Incorrect or incomplete registration of conditional business lines.
Capital contribution not made on time or not in the registered form.
Choosing an investment structure that does not align with long-term objectives.
Inconsistencies between investment licenses and enterprise registration documents.
These mistakes may require foreign enterprises in Vietnam to amend their licenses, face administrative penalties, or encounter difficulties in business expansion and profit remittance abroad.
Once operations commence, legal risks often arise from failing to keep up with Vietnam’s frequently changing regulations.
Foreign enterprises commonly face issues such as:
Failure to promptly update tax, labor, and social insurance regulations.
Employment contracts and internal policies that do not comply with Vietnamese law.
Related-party transactions or transfer pricing without adequate legal documentation.
Non-compliance with investment reporting and periodic statistical reporting obligations.
Such violations may lead to inspections, tax reassessments, administrative penalties, or even suspension of operations. Notably, many enterprises only become aware of these risks when it is already too late for easy correction.
Identifying risks is only the first step. More importantly, foreign enterprises in Vietnam need an appropriate legal strategy to proactively prevent and manage risks.
Instead of taking a “firefighting” approach, many enterprises choose long-term legal solutions from the beginning to protect their interests.
One of the most effective solutions is to establish an internal legal compliance system.
This includes:
Reviewing all investment dossiers, licenses, charters, and contracts.
Standardizing templates for commercial, labor, and cooperation contracts.
Establishing legal approval procedures before entering into key transactions.
Conducting periodic compliance reviews across different legal areas.
For foreign enterprises in Vietnam, regular legal reviews help identify issues early and make timely adjustments before government inspections occur.
Many foreign investors rely on accountants or handle legal matters internally to save costs. However, this approach carries significant risks when disputes or inspections arise.
Ongoing legal advisory services offer clear benefits:
Continuous updates on the latest legal regulations.
Legal support for critical business decisions.
Reduced risk of violations and lower costs for resolving consequences.
Enhanced transparency and credibility with partners and authorities.
This is often referred to as an “outsourced legal department,” a solution increasingly adopted by foreign enterprises in Vietnam to optimize costs while ensuring legal safety.
When disputes arise, having lawyers who understand both Vietnamese law and international practices is crucial.
Corporate lawyers can:
Quickly assess risk levels and the likelihood of success.
Propose appropriate negotiation, mediation, or litigation strategies.
Represent enterprises in dealings with partners, authorities, and courts.
Protect the enterprise’s legitimate rights to the fullest extent.
In many cases, early involvement of lawyers helps foreign enterprises in Vietnam avoid prolonged disputes, minimize financial losses, and protect their brand reputation.
In reality, legal risks are not a matter of “if,” but “when” if enterprises are not well prepared. For foreign enterprises in Vietnam, differences in legal systems, language, and enforcement practices make these risks even more complex.
Are you concerned about legal risks when investing and doing business in Vietnam?
Is your enterprise truly legally secure?
Let DEDICA Law accompany you in building a sustainable legal strategy, preventing risks, and resolving disputes effectively from today.
Contact DEDICA Law Firm for in-depth legal consultation!
📞 Hotline: (+84) 39 969 0012 (WhatsApp, WeChat & Zalo available)
🕒 Working hours: Monday – Friday (8:30 – 18:00)
Contact us now to receive a free initial consultation from our professional legal team.
Select a platform to view details
