7 Reasons to Set Up a Subsidiary in Vietnam Now: A Powerful and Timely Move Amid Global Shifts

 

Introduction: The World Is Changing Fast, So Should Your Strategy

When the world becomes unpredictable, the winners are those who adapt first. For foreign businesses facing mounting U.S. tariffs, geopolitical tensions, and inflationary pressures, the question is urgent: Where do we go next? Still, one of the option is to set up a subsidiary in Vietnam.

Vietnam is no longer just “emerging.” It’s surging, with a government committed to economic transformation, a favorable geographic position, and a legal environment evolving rapidly to support foreign investment.

In here, amid new US tariffs annoucement that shock the world, we look into compelling reasons foreign investors still consider to set up a subsidiary in Vietnam now and how to do it right.

Vietnam Offers a Safe Harbor Amid Global Trade Storms

The global trading environment is increasingly volatile. U.S. tariffs on Vietnamese exports and many of US long term trading partners are sending shockwaves through established supply chains. But companies need to adapt quicly.

Vietnam, with its network of free trade agreements (EVFTA, RCEP, CPTPP), allows companies to hedge against protectionist pressures. When you set up a subsidiary in Vietnam, you gain preferential access to many markets while anchoring your operations in a stable, low-cost, business-friendly country.

Regulatory Reforms Are Opening Doors Faster Than Ever

Vietnam’s government has made it a national priority to streamline investment procedures. Laws have been updated, digital systems are expanding, and provinces are competing to attract foreign capital.

If you plan to set up a subsidiary in Vietnam, here’s what’s new and improved:

- Faster licensing with clearer guidance on Investment Registration Certificates (IRC) and Enterprise Registration Certificates (ERC)

- Simplified digital submissions and fewer paper-based approvals in major cities

- Clearer definitions of conditional business lines and legal rights of foreign-invested enterprises

- Enhanced dispute resolution channels, including more support for arbitration and mediation

Legal Structure Gives You Full Ownership and Control

Unlike many jurisdictions, Vietnam allows 100% foreign ownership in most sectors. Your company does not need to hire local director or local corporate secreterials. When you set up a subsidiary in Vietnam, you retain control while operating under local law with the full rights of a domestic enterprise.

The preferred vehicle is a Limited Liability Company (LLC), which gives you:

- A separate legal identity from your parent company

- Limited liability protection

- The right to lease property, hire staff, import/export, and sign contracts

- Repatriation of profits under clearly defined regulations

This legal clarity is a big reason why major global players have chosen to set up subsidiaries in Vietnam instead of relying on third-party distributors or setting up representative offices in Vietnam.

The Compliance Landscape Is Tough, but Manageable with the Right Support

Vietnam’s legal system is evolving quickly. That’s good for investors, but also means companies must stay sharp.

After you set up a subsidiary in Vietnam, ongoing compliance will require attention to:

- Corporate income tax (CIT) at 20%

- Value-added tax (VAT), typically 10%, with industry-specific exemptions

- Transfer pricing rules aligned with OECD standards

- Labor laws that favor employees and require labour contracts, insurance, and work permits for expats in Vietnam

- Customs and import/export documentation that must be precise and timely

Good news is, if you use your consulting partner then your company can not only stay compliant, but leverage incentives you might otherwise miss.

Political Will Is Driving Pro-Business Reforms

Vietnam is one of the few emerging economies where economic growth is a political mandate.

Over the last five years, Vietnam’s leadership has made foreign direct investment (FDI) a strategic pillar. It’s not just policy, it’s priority.

If you follow the polical news in Vietnam, there has been quicker changes in positive direcions more than ever.

When foreign companies set up a subsidiary in Vietnam, they benefit from:

- Central-local coordination to facilitate big projects

- Industrial parks with tailored incentives

- Infrastructure investment backed by government bonds and public-private partnerships

- Trade promotion efforts that connect investors with local partners

The system isn’t perfect, but it’s functional, improving, and committed to growth. That’s more than can be said for many investment destinations in today’s fractured world.

Vietnam Offers Strategic Legal Flexibility in Structuring Operations

One of Vietnam’s quiet strengths is the flexibility it gives foreign companies to shape their operations, within the legal framework.

When you set up a subsidiary in Vietnam, you can:

- Choose between 100% foreign-owned, joint venture, or multi-tiered holdings

- Structure investment capital and charter capital in a phased or conditional approach, aligned with your expansion plans

Few countries in the region allow this level of tailored legal structuring. Vietnam does, especially for companies that know how to negotiate their setup terms early.

The Timing Has Never Been Better

Every investor knows timing is everything. Now, the window is wide open to set up a subsidiary in Vietnam. But:

- Tariff rules may change, and early movers will adapt faster

- Industrial zone availability is shrinking as more investors pour in

- Incentives are tightening as Vietnam matures and no longer needs to offer steep discounts

- Legal complexity increases over time, especially with new sector-specific rules

Make Vietnam Part of Your Global Risk Strategy

To set up a subsidiary in Vietnam today is to do more than enter a new market. It’s a powerful, timely, and emotionally intelligent move toward resilience, control, and long-term opportunity.

Vietnam isn’t perfect, but it’s open, it’s moving, and it’s making room for global business.

The companies that thrive in the next decade will be the ones that recognized the shift and took bold steps early.

Vietnam is shifting from “interesting” to “essential.” Make your move while the momentum is still on your side.

Read More

The Guide to Legal Due Diligence in Vietnam: 7 Key Insights

 Things move fast.

Vietnam changes every day.

Growth brings opportunity, and hidden pitfalls.

You can’t rely on assumptions in this market.

Sharp analysis, trusted advice, and strong local insight are your best defense. And that defense begins with a deep, thorough legal due diligence in Vietnam on transactions.

Legal due diligence in Vietnam is a critical process in mergers and acquisitions (M&A), especially in a constant growing economy like Vietnam.

As foreign direct investment (FDI) continues to surge, understanding the intricacies of legal due diligence in Vietnam becomes paramount for investors.

This guide provides an analysis of the process of the legal due diligence in Vietnam, tailored specifically to the Vietnamese market.

Why Legal Due Diligence is Crucial in Vietnam

Vietnam’s rapid economic growth, favorable investment climate, and strategic location in Southeast Asia have made it an attractive destination for foreign investors.

The M&A trend in Vietnam offers a quick route for foreign investors to penetrate an established market. However, to ensure a successful transaction, thorough legal due diligence in Vietnam is essential.

This process helps in identifying potential legal risks, ensuring compliance with local laws, and ultimately protecting the investment.

Understanding Legal Due Diligence in Vietnam

Definition and Key Objectives

Legal due diligence is a thorough investigation into the legal aspects of a potential investment or acquisition.

The primary objectives of legal due diligence in Vietnam are to:

1. Assess legal risks and liabilities.
2. Verify the legal standing of the target company.
3. Ensure compliance with relevant laws and regulations.
4. Facilitate informed decision-making for the investor.

Importance in M&A Transactions

In the context of M&A, legal due diligence in Vietnam is indispensable. It helps investors:

– Identify any legal impediments to the transaction.
– Understand the contractual obligations and rights.
– Evaluate intellectual property assets.
– Ensure labor and employment law compliance.

Legal Due Diligence vs. Other Types of Due Diligence

While financial and operational due diligence focus on financial health and business operations, legal due diligence scrutinizes the legal framework within which the business operates. This distinction is crucial as legal issues can significantly impact the overall value and feasibility of the transaction.

The Legal Due Diligence Process

Initial Steps

Preparing a Comprehensive Checklist

The first step in the legal due diligence process is preparing a comprehensive checklist. This checklist should cover all legal areas relevant to the target company, including corporate governance, contracts, intellectual property, employment matters, and compliance with local laws.

Assembling the Due Diligence Team

Assembling a team of experts, including legal professionals with experience in the Vietnamese market, is crucial. This team will be responsible for conducting a thorough review and analysis of all legal documents and issues.

Key Areas of Focus

Contracts and Agreements

A detailed review of all contracts and agreements is essential. This includes examining the terms and conditions, identifying any potential liabilities, and ensuring the enforceability of contracts under Vietnamese law.

Compliance and Regulatory Issues

Ensuring compliance with Vietnamese laws and regulations is a critical aspect of legal due diligence. This involves checking for any regulatory approvals, licenses, and permits required for the business operations.

Litigation and Disputes

A review of any ongoing or potential litigation and disputes is necessary to assess the legal risks. This includes analyzing the history of disputes and their potential impact on the business.

Intellectual Property

Intellectual property (IP) is a valuable asset for many companies. Legal due diligence in Vietnam involves verifying the ownership and validity of IP assets, as well as assessing any potential IP disputes.

Employment and Labor Matters

Ensuring compliance with Vietnamese labor laws is vital. This includes reviewing employment contracts, employee benefits, and any potential labor disputes.

Specific Considerations in Vietnam

Local Legal Environment

Overview of Vietnamese Legal Framework

Vietnam’s legal framework is influenced by its socialist legal system. Understanding the nuances of this system is crucial for effective legal due diligence. Key aspects include the role of the government, the importance of obtaining necessary approvals, and the potential impact of changes in regulations.

Common Legal Issues in Vietnamese M&A Transactions

Common legal issues in Vietnamese M&A transactions include restrictions on foreign ownership, complex regulatory approval processes, and the need for careful structuring of transactions to comply with local laws.

Challenges and Solutions

Navigating Vietnamese Regulatory Landscape

Navigating the regulatory landscape in Vietnam can be challenging due to frequent changes in laws and regulations. Engaging local legal experts who are up-to-date with the latest developments is essential.

Mitigating Risks with Local Legal Expertise

Mitigating legal risks requires a deep understanding of the local market. Experienced legal professionals can provide valuable insights and help in structuring transactions to minimize risks.

Benefits of Professional Legal Services

Advantages of Hiring a Law Firm

Expertise and Local Knowledge

Hiring a law firm with expertise in Vietnamese law provides a significant advantage. These professionals have a deep understanding of local regulations and can navigate the complexities of the legal system effectively.

Ensuring Thoroughness and Compliance

Professional legal services ensure thorough due diligence and compliance with all relevant laws. This reduces the risk of legal issues arising post-transaction and provides peace of mind to investors.

Specifics of a Case under Due Diligence by a Law Firm in Vietnam

Consider the example of a multinational company looking to acquire a local Vietnamese business. By engaging a local law firm, the company was able to identify potential legal risks, navigate the regulatory landscape, and successfully complete the transaction. This underscores the importance of professional legal services in ensuring a successful M&A deal.

Summary

Legal due diligence in Vietnam is a critical component of the M&A process. It helps in identifying legal risks, ensuring compliance with local laws, and protecting the investment. Given the growing economy and increasing FDI, understanding and conducting thorough legal due diligence is essential for investors.

This article provides a comprehensive overview of legal due diligence in Vietnam, emphasizing its importance in the M&A process and the benefits of engaging professional legal services. By understanding the unique legal environment in Vietnam and conducting thorough due diligence, investors can mitigate risks and ensure successful transactions.

Read More

5 Inspiring Reasons Why Vietnam Needs a Strong Vietnam Legal Framework for Digital Assets Today

 

Global Momentum and Why Vietnam Needs a Legal Framework for Digital Assets

In recent years, the world has witnessed an unprecedented surge in digital assets. From cryptocurrencies like Bitcoin and Ethereum to financial derivatives such as security tokens, and even NFTs in art and entertainment, digital assets are no longer futuristic fantasies. They’ve become a present day force reshaping finance, technology, and innovation.

The concept of digital assets is no longer confined to tech enthusiasts or speculative investors. It has drawn the attention of leading economies, precisely because digital assets are a product of the 4.0 Industrial Revolution, a fusion of blockchain, artificial intelligence, cloud computing, and big data infrastructure. These assets not only symbolize innovation but also unlock new markets for digital services, financial products, and global investment.

Vietnam Riding the Global Digital Wave

Vietnam has been swept up in this wave of global digital transformation. Despite a lack of formal regulation, the country has seen a boom in underground crypto exchanges, local tech companies experimenting with token issuance, blockchain platforms, and digital asset wallets. On the demand side, an increasing number of young investors are actively participating in digital asset markets, driven by high returns, despite high risks and regulatory uncertainty.

Several studies place Vietnam among the top countries globally in terms of cryptocurrency adoption. Despite the vibrant growth, the Vietnam legal framework for digital assets remains practically nonexistent. Digital asset transactions are neither fully legal nor explicitly banned, putting both investors and regulators in a legal limbo.

The Risks of a Legal Vacuum

Without a Vietnam legal framework for digital assets, risk is inevitable. Investors fall prey to scam projects, fraudulent exchanges, and tokens that vanish in value overnight. The government misses out on taxable revenue from lucrative trades. Law enforcement agencies struggle to handle disputes or crack down on money laundering conducted through blockchain channels. This legal void not only causes financial damage but also undermines market credibility and the country’s digital economy goals.

Global pressures compound the challenge. Many countries have already issued legislation to regulate digital assets. While their approaches vary, they all share one conclusion: delay is not an option.

Vietnam’s Policy Shift Toward Digital Asset Regulation

In light of these trends, the Vietnamese government has made building a Vietnam legal framework for digital assets a policy priority.

- March 6, 2025: The Office of the Government issued Notice No. 81/TB-VPCP summarizing the Prime Minister’s conclusions during a cabinet meeting on accelerating digital asset regulation.

- March 9, 2025: The Prime Minister issued Official Dispatch No. 22/CĐ-TTg, calling for streamlined administrative procedures and a pilot mechanism for digital asset issuance and transactions.

- March 11, 2025: The Ministry of Finance submitted Proposal No. 64/TTr-BTC to the government, outlining a pilot resolution for issuing and trading digital assets. This marks Vietnam’s first formal step toward officially recognizing and managing digital assets, even if it’s just a trial phase.

Legal Framework Matters

Why does Vietnam need a legal framework for digital assets?

Because no market can thrive without rules. Laws are not just tools for control, they’re platforms for transparent, fair, and sustainable growth.

A Vietnam legal framework for digital assets should include legal provisions, technical guidelines, and management policies governing the entire lifecycle of digital assets, from identity, issuance, transaction, storage, and transfer to dispute resolution and user protection.

It draws the line between what’s legal and what’s not. Who can issue tokens? Who can trade them? What taxes apply? How are disputes resolved?

More critically, this framework empowers the state to manage macroeconomic risks and shield the national financial system from technological disruptions. Strategically, it’s a move Vietnam must take to stay competitive in the global digital economy race.

The Vietnam legal framework for digital assets is no longer a “nice-to-have”, it’s a must-have. With global markets moving rapidly, Vietnam has a unique opportunity to take actions responsibly, protect its citizens, and position itself as a forward-looking digital economy. By doing so, Vietnam would join the race in a proactive ways.

Read More