The need to keep up to date with legal regulations and effectively manage compliance risks is becoming increasingly critical for businesses. Vietnam remains one of the most promising markets for both domestic and foreign enterprises and investors. However, alongside investment opportunities and growth potential lies a reality that many businesses are directly facing: the legal framework is being continuously refined, with a substantial number of new legal normative documents being issued, many existing regulations being amended, supplemented, or replaced, and an increasingly extensive and detailed system of implementing guidelines.
This is an inevitable trend in the process of institutional improvement and the strengthening of state governance effectiveness. However, from a compliance perspective, this reality also places considerable pressure on businesses to promptly update, accurately understand, and properly apply legal regulations related to investment activities, corporate governance, land use, real estate, labor, commercial transactions, and overall business operations.
For foreign-invested enterprises (FDI enterprises), this challenge is often even greater. It arises not only from language barriers or differences between legal systems, but also from the fact that the application of law in Vietnam typically requires businesses to simultaneously monitor laws, decrees, circulars, amending instruments, replacement regulations, and other relevant legal provisions, while each regulatory field involves its own distinct approach and compliance requirements.
Why Are Businesses Prone to Compliance Risks?
In practice, risks often arise not because businesses intentionally violate the law, but due to the following factors:
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- Failure to promptly update new regulations or amendments, supplements, and replacements to existing legal provisions;
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- Incomplete understanding of the relationship between legal documents within the same regulatory field;
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- Application of outdated regulations when the relevant legal basis has already changed;
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- Lack of regular review of investment structures, legal documentation, internal processes, or ongoing transactions to ensure alignment with current regulations.
As the number of legal instruments continues to grow, with increasingly specialized scopes of regulation and stricter compliance requirements, merely “knowing the rules” is no longer sufficient. What becomes more critical is the ability to identify which regulations are currently in force, determine which provisions must be applied in specific situations, and assess how those regulations may impact a company’s transactions or operations.
Certain Practical Situations Businesses Have Encountered
Ví dụ 1 – Giao dịch đầu tư nhưng chưa đánh giá đầy đủ yêu cầu điều chỉnh hồ sơ pháp lý đầu tư
Một nhà đầu tư nước ngoài thực hiện giao dịch nhận chuyển nhượng phần vốn trong doanh nghiệp tại Việt Nam và cho rằng sau khi hoàn tất giao dịch, doanh nghiệp có thể tiếp tục triển khai các thủ tục tiếp theo như kế hoạch kinh doanh thông thường. Tuy nhiên, trong quá trình rà soát hồ sơ, phát sinh yêu cầu phải thực hiện thêm các thủ tục điều chỉnh liên quan đến hồ sơ đầu tư và tình trạng pháp lý của doanh nghiệp theo quy định hiện hành. Việc không nhận diện sớm yêu cầu này đã làm chậm tiến độ giao dịch, ảnh hưởng đến kế hoạch triển khai tiếp theo và phát sinh thêm thời gian, chi phí tuân thủ.
Example 1 – Investment Transaction Without Fully Assessing the Need to Adjust Investment Legal Documentation A foreign investor carried out a capital acquisition transaction in a Vietnamese company and assumed that, once the transaction was completed, the enterprise could proceed with its subsequent activities in accordance with its normal business plan. However, during the legal review process, it was identified that additional procedures were required to adjust the investment documentation and the legal status of the enterprise in accordance with the applicable regulations. The failure to identify this requirement at an early stage delayed the progress of the transaction, affected the subsequent implementation plan, and resulted in additional time and compliance costs.
Such situations are not isolated. In many cases, the greatest risk does not arise from disputes that have already occurred, but from the fact that businesses carry out their operations based on an incomplete legal assessment or one that has become outdated compared to the regulations currently in force.
Key Considerations for Controlling Compliance Risks
To mitigate compliance risks in the context of a legal system that is continuously evolving and being updated, businesses should consider several key factors.
First, establish a regular and selective legal monitoring mechanism.
Second, legal provisions should not be interpreted in isolation. Understanding and applying Vietnamese law often requires reading provisions in conjunction with laws, decrees, circulars, as well as amending or replacement instruments. If a business relies on a single legal document alone, there is a high risk of misunderstanding or misapplying the law.
Third, periodically review existing legal documentation and structures. Many enterprises assume that documentation prepared at the initial stage of an investment or project can be used indefinitely. However, when regulations change, previously established legal structures, documentation, or internal procedures may no longer fully comply with the current legal framework.
Fourth, conduct legal due diligence before major transactions. For significant transactions such as M&A deals, capital transfers, project acquisitions, joint ventures, or corporate restructuring, legal reviews should be carried out early to identify compliance issues before risks materialize.
Fifth, engage legal advisors with the capability to assess issues beyond the literal wording of regulations. In many cases, the true value of legal advice does not lie merely in citing legal provisions, but in the ability to determine the applicable regulations, evaluate the interrelationship between different rules, and identify overlaps, gaps, or practical compliance risks.
DTLaw’s Perspective on Controlling Compliance Risks
At DTLaw, we believe that in a legal environment that is becoming increasingly comprehensive, detailed, and frequently updated, businesses need more than advisors who simply know the rules. What they require is a team that truly understands the legal system, how it is applied in practice, and how regulatory changes may affect real business operations.
This is also one of the foundations that enables DTLaw to deliver distinctive value.
DTLaw is led and managed by Lawyer Nguyễn Tất Thắng, who has more than 15 years of legal practice experience and over 10 years of service at the Ministry of Justice, where he was involved in advising on, reviewing, and examining legal normative documents. He previously served as Head of the Legal Document Review Division, Department for the Examination of Legal Normative Documents under the Ministry of Justice.
This experience is not merely a professional credential. More importantly, it provides the professional foundation that enables DTLaw to:
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- Assess legal issues from a systemic perspective, rather than approaching them solely through isolated regulatory provisions;
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- Identify potential risks early, including overlaps, amendments, replacements, or inconsistencies between different legal instruments;
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- Assist businesses in understanding the true legal nature of an issue and selecting a practical and feasible course of action consistent with operational realities.
In a legal environment characterized by constant change, businesses increasingly require legal advisors capable of anticipating risks and accompanying them in a proactive and practical compliance management process.
Conclusion
Vietnam continues to be an attractive market for investment and business activities. However, as the legal system continues to evolve and become more sophisticated, businesses must pay greater attention to compliance management and regulatory risk control.
For many companies—particularly foreign-invested enterprises—the challenge lies not only in the volume of regulations that must be followed, but also in correctly identifying the applicable rules, understanding the spirit and intent of those regulations, and implementing them appropriately in practice.
In this context, proactive legal review, continuous regulatory updates, and close collaboration with experienced legal advisors not only help businesses mitigate compliance risks, but also provide a more secure legal foundation for investment decisions and long-term operations in Vietnam.
Liên hệ tư vấn:
Email: thangnt@dtlaw.vn
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