Disputes over Administrative Penalty Decisions Involving FDI Enterprises in Vietnam
In an increasingly open and globally integrated investment environment, FDI enterprises (foreign direct investment) in Vietnam face not only business opportunities but also legal challenges, among which disputes over administrative penalty decisions are a prominent issue. This article updates the latest legal regulations, practical situations, and provides guidance for resolving disputes to help FDI enterprises understand how to protect their lawful rights and interests.
1. New Legal Regulations on Administrative Sanctions for FDI Enterprises
1.1. Legal Grounds and Key Amendments
Investment Law 2020 and Decree 122/2021/ND-CP
Decree 122/2021/ND-CP regulates administrative penalties in the field of planning and investment – a crucial document for FDI enterprises penalized for violations in investment activities (e.g., late capital contributions, failure to report on investment or monitoring activities).
According to this Decree, fines and remedial measures apply for violations such as failure to prepare or submit periodic investment monitoring reports on time; failure to adjust investment projects when significant changes occur; failure to contribute capital as committed.
Law on Handling of Administrative Violations (Amended 2020)
The law explicitly provides that enterprises and individuals have the right to complain about administrative penalty decisions. If disagreeing with such decisions, the organization or individual may initiate an administrative lawsuit in court.
Fines and appeal rights are clearly outlined to ensure fairness.
Regulations on Investment Monitoring Reports – Circular 05/2023/TT-BKHDT, Decree 29/2021/ND-CP
FDI enterprises must submit periodic reports (semi-annually and annually), or upon project adjustment, using specific forms and within defined timelines. Failure to comply may result in fines ranging from VND 20 million to 30 million for organizations.
At the same time, violators may be required to take remedial actions: supplement missing content, submit reports in accordance with regulations, and maintain proper legal document storage.
1.2. Common Challenges FDI Enterprises Face When Receiving Administrative Penalties
Lack of legal clarity: Some administrative decisions lack clear legal justification, fail to describe the violation clearly, or are issued by the wrong authority or to the wrong subject. Courts have overturned such decisions due to procedural or evidentiary errors.
Violation of legal time limits: Delayed issuance of violation reports or invalid delivery of penalty decisions are frequent causes of annulment in court.
Insufficient legal knowledge: Many FDI businesses are unaware of their right to complain or litigate, or lack strategies to legally defend themselves when penalized.
2. How FDI Enterprises Should Handle Disputes over Administrative Penalty Decisions
2.1. Complaint and Litigation Procedures
Administrative Complaint
According to the Law on Handling of Administrative Violations and other relevant laws, enterprises have the right to file complaints against administrative penalty decisions, initially to the same authority that issued the decision.
Complaints can be submitted in writing or in person. The complaint must state: the date the decision was received, the legal basis, the content of the decision, the reason for the complaint, and the request to annul or reconsider the decision.
Complaint deadline: usually within 90 days from the date of receiving the decision or becoming aware of the decision/violation.
Administrative Litigation
If unsatisfied with the complaint resolution (first or second instance), the FDI enterprise may initiate an administrative lawsuit at the competent People’s Court.
The Law on Administrative Procedures 2015 details the litigation process: preparing a petition, submitting documents, and court acceptance based on jurisdiction and timeliness.
Courts often review procedural errors, legal basis, authority, and description of the violation to determine whether to uphold or annul the penalty decision.
2.2. Preventive Measures and Strategic Advice for FDI Enterprises
Before any issues arise, FDI companies should fully understand their commitments under the investment registration certificate, enterprise registration certificate, and the provisions of Decree 122/2021/ND-CP, Investment Law 2020, and the Law on Administrative Violations.
Build a robust internal governance system to ensure timely and complete reporting on investment monitoring; adjust project information when required to avoid penalties for non-compliance.
Seek legal counsel early when there are signs of inspections: carefully review the administrative violation report, penalty decision – check for proper names, dates, locations, description of the conduct, and legal basis; confirm whether the issuing authority has proper jurisdiction.
If a penalty decision is received, the business should consider filing a complaint or appeal before pursuing litigation – this is often a required step to preserve legal rights. Prepare evidence such as inspection records, copies of the penalty decision, correspondence, internal documents, and any other relevant records.
3. Conclusion
Disputes over administrative penalty decisions are a persistent legal risk for FDI enterprises in Vietnam. Despite reforms in the Investment Law 2020, amended Law on Handling of Administrative Violations 2020, and Decree 122/2021/ND-CP, practical gaps remain regarding procedures, authority, and compliance.
To protect their lawful interests, FDI businesses should proactively enhance their legal understanding, strengthen internal systems, and develop a strategic response when penalized – through complaints or litigation.
If your FDI enterprise is facing an administrative penalty, reach out to a team of experienced legal professionals for a thorough evaluation and an effective plan to complain or litigate and safeguard your legal rights.
Contact DEDICA Law Firm for expert legal consultation!
📞 Hotline: (+84) 39 969 0012 (Available on WhatsApp, WeChat, and Zalo)
🏢 Head Office: 144 Vo Van Tan Street, Xuan Hoa Ward, Ho Chi Minh City (144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City)
🕒 Business Hours: Monday – Friday (8:30 AM – 6:00 PM)
Reach out today for a free initial consultation with our team of professional lawyers!
