Vietnam Investment Law 2025: A Smoother Entry, Clearer Compliance

  For foreign investors who have been following Vietnam’s development and considering Vietnam as one of the choices for their investment decision, they usually ask one practical question before entering, especially from the year 2026, that if the Vietnam investment Law 2025 makes this easier, or more complicated for investing and doing business here. 

The Vietnamese lawyers’ answer is as ironic and interestingly the same: both.

Let us explain why.

The Vietnam investment Law 2025, effective in 2026, aims to make the entry path more workable, but it also makes the compliance more strict and less forgiving.

For our positive thinking mindset, that is good news if your scope of business is clear, and your setup is realistic.

It will be challenging if you start with vague activities, minimal capital, and a fix later mindset plan.

Quick Reference of Vietnam Investment Law 2025

• The Vietnam investment Law 2025 takes effect March 1, 2026 and the conditional business list will be narrowed from July 1, 2026.
• Legal entry can be easier, but you need to early check if the investment areas belong to the list of prohibited, conditional, or non-conditional area lists.
• In practice, starting with low capital often collide with Vietnam’s expectations of a quality FDI project, especially if investor residence planning matters.
• The investment amount of USD 120k (VND 3 billion) remains a key practical threshold with DT3 visa and is eligible for Temporary Residence Card (TRC) validity up to 3 years. 

When Does Vietnam Investment Law 2025 Apply?

•       From March 1, 2026, the Vietnam investment Law 2025 generally takes effect and becomes the main baseline for investment related procedures and compliance expectations.
•       From July 1, 2026, the regulation on list of conditional business lines take effect.

This matters because many foreign investors enter Vietnam in phases. They may start with steps to set up a legal entity, rent an office, hire a small team, and begin testing the market, then expand once the business model proves itself.

With the above timeline of regulation coming into effect, it means you can set up early in the year and use that period to validate your scope to answer questions if you are truly operating in an unconditional business area and are you clear on market access rules for foreign investors.   

How Entering Vietnam is Easier?

A more workable entry sequence for foreign investors

The Vietnam investment Law 2025 supports a more flexible sequence where a foreign investor may establish an entity and apply for ERC in connection with implementing a project before completing certain IRC issuance or adjustment procedures while still meeting market access conditions at establishment.

This helps because it can reduce early dead time when the business needs to lease, hire, and set up operations.

Special investment procedures in designated zones

The Vietnam investment Law 2025 provides for special investment procedures for projects located in certain zones for instance industrial parks, high-tech parks, digital tech zones, Free Trade Zones, international financial centers, etc.

This depends on location and project characteristics, not for every project.

Why Compliance in Vietnam Investment Law 2025 Matters More?

At the start of the setting up of company in Vietnam, the investors need to be specific about its business activities. Even if the list of conditional business lines becomes more streamlined, investors still need to verify their real activities are being properly categorized into:

1. Not prohibited or banned business lines
2. Not conditional or if conditional, you need to comply with the conditions and apply for licenses.
3. Not restricted under foreign investor market access conditions for instance ownership limits, scope limits, licensing requirements.

With the Vietnam investment Law 2025, a trend across is going focusing on:

• fewer permission steps upfront in some areas,
• stronger expectation that you can show records and consistency later.

That means, contracts, invoices, staffing, and actual operations must align with what you registered and what you claimed.

That pushes companies to set up internal compliance basics earlier.

Minimal Capital Mindset Not Suitable in Vietnam

We come across investors with a very positive mindset and wish to incorporate companies with minimal capital, because in developed markets they can start lean, prove the model, then raise funds and increase capital later.

Not in Vietnam.

That approach often creates friction. Vietnam has relied heavily on FDI, and regulators and counterparties frequently expect capital that matches the project plan. When the capital looks too small for the stated scope, the project may face extra questions, slower processing, and practical limits, especially if the investor expects a longer stay plan.

Is VND 3 billion still a meaningful threshold for investor to apply for TRC for two to three years?

Yes.  VND 3 billion remains the key threshold in the investor classification framework.

• DT3 commonly applies where investment capital is VND 3 billion to under VND 50 billion. 
• DT3 is commonly associated with temporary residence card (TRC) validity up to 3 years. 
• DT4 (under VND 3 billion) is typically shorter term and often does not support the same TRC profile. 

In our practical opinion, if the investor wants the government and the market to consider the project as quality, and if investor residence planning is part of the roadmap, VND 3 billion is often the planning baseline, unless there are clear sector reasons to justify a lower figure.

With the transformation and transition of policy of Vietnam to encourage AI, chip making, automation, digital assets, international financial center, free trade zones, the expectation of capital is much more.

Step-by-Step Entry Plan and Comply in Vietnam

Step-by-Step Entry Plan and Comply in Vietnam

Step 1: Define the Vietnam scope

You should be able to explain the business activities in simple terms.  This single sentence define market access conditions, licensing, contracts, staffing, and capital logic.

Step 2: Check the business lines against conditions

This will help ensure if the business activities belong to:

• prohibited lines
• conditional lines
• market access conditions for foreign investors

Step 3: Choose the right company structure

Most foreign investors use one of these:

• Single-member LLC
• Two-or-more-member LLC
• Joint Stock Company (JSC), which is useful for multi-shareholder governance and future fundraising.

Step 4: Check the registration procedures

Check the procedures to start entity establishment and apply for ERC and whether IRC related steps is needed.

Step 5: Set capital that matches the plan

Most of the time, there is no requirement on minimum capital for every business line.  But the immigration and credibility ecosystem make certain thresholds practically important. DT3 starts at VND 3 billion and is commonly linked to TRC validity up to 3 years. 

Step 6: Remember to comply strictly to avoid fine

Remember to ensure compliance post setting up, and during the operation in Vietnam on regular basis.  The compliance will be needed on various aspects including but not limited to taxes, regular reporting, labour.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/update/vietnam-investment-law-2025-smoother.html

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Contract Disputes in Vietnam: 8 Contract Matters Foreign General Counsels Must Get Right

  

Introduction: Contract Disputes in the Recognition and Enforcement of Foreign Arbitral Awards in Vietnam

When you discuss about contract disputes in Vietnam, most of the time, you might think about what happens when a deal goes wrong.  You could go on and discuss breaches, delays, non payment, termination, or damages.

We now take a different starting point.

We talk about what happens after a dispute has already been decided, often by arbitration, and one party believes it has won and now proceed to recognition and enforcement stages in Vietnam.

Contract Disputes in Vietnam: 8 Contract Matters Foreign General Counsels Must Get Right

In practice, many foreign companies in Vietnam follow a familiar path:
1. A contract is signed and performed.
2. A dispute arises.
3. The parties go to arbitration.
4. An arbitral tribunal issues an award.
5. The winning party moves to enforce or recognize and enforce that outcome in Vietnam under New York Convention.

At this final stage, something unexpected would happens.

Vietnamese courts do not simply look at the arbitral award.
They may look back at the contract itself, sometimes in detail, to assess whether the agreement was valid, properly authorized, and compliant with Vietnamese law.

This means that even when:
• the contract has been used for years,
• the parties have fully performed,
• and an arbitral tribunal has ruled on the merits,

the contract can still become the central issue again at the recognition and enforcement stage in Vietnam.

Why Need To Think Early About Enforcement in Contract Disputes in Vietnam

When it comes to the time to enforce an arbitral awards issued by Vietnam arbitration or to recognize and enforce a foreign arbitral awards in Vietnam, the issue would arise.  Although many contract disputes in Vietnam do not fail on commercial merits, they fail because the contract itself cannot survive judicial review.

Vietnamese courts and arbitral tribunals emphasize:

• authority,
• written consent,
• legal form,
• and documentary integrity.

As a result, contract disputes in Vietnam often shift away from who breached question to more basic questions:

• Did a valid contract exist?
• Who had authority to bind the company?
• Can the agreement be proven cleanly?

For foreign general counsels, it is important to think about enforceability long before a dispute arises.

How Contract Design Shapes Contract Disputes in Vietnam

International arbitration theory emphasizes autonomy, separability, and minimal court intervention. But in contract disputes in Vietnam, decision makers often apply a stricter, document driven approach.

Vietnamese courts typically ask:

1. Was the contract validly formed?
2. Was it signed by the right person?
3. Is the arbitration clause clearly binding?
4. Does the contract comply with mandatory law?
5. Can the contract be proven without ambiguity?

If any answer is uncertain, the dispute escalates regardless of commercial fairness.

8 Contract Matters That Define Contract Disputes in Vietnam

1. Authority to Sign the Contract

One of the most frequent triggers of contract disputes in Vietnam is lack of signing authority.

We see in many cases, contracts are often signed by sales managers, project leaders, or foreign executives without valid authorization.

Vietnamese law applies a strict test that authority must exist at the time of signing.

For instance, in a Hanoi court case, an arbitral award was annulled because the contract was signed by a project director without proper authorization. The company had performed the contract for years, but the court focused solely on authority at signing, not later conduct.

Therefore, the general counsels need to make sure they verify the legal representative or require a valid Power of Attorney before execution. Authority risk is dispute risk.

2. Power of Attorney: Form, Scope, and Legalization

In cross border contract disputes in Vietnam, defective Powers of Attorney are a recurring problem.

Common issues include:

• expired POAs,
• POAs lacking arbitration authority,
• foreign POAs not consularly legalized.

Vietnamese courts treat representation capacity as a foundational legal requirement.

For instance, a Ho Chi Minh City court set aside an arbitral award after finding that a foreign Power of Attorney used in the arbitration had not been properly legalized. The court viewed this as a violation of basic legal order.

Therefore, the company’s general counsels should treat POAs as jurisdictional documents, and not forget to legalize, authenticate properly.

3. Contract Formation: Clear Written Consent Matters More Than Performance

Foreign companies often assume that performance proves agreement.

In contract disputes in Vietnam, this assumption is risky.

Problems arise when:

• contracts are unsigned,
• arbitration clauses appear only on invoices or many times in small letters in terms and conditions,
• email exchanges are treated as final agreements.

Vietnamese courts prioritize clear written consent.

For instance, in a dispute involving long term supply, a court rejected arbitration jurisdiction because the arbitration clause appeared only on delivery notes. Continuous performance did not cure the lack of formal agreement.

Therefore, if it is not clearly agreed in writing, the general counsels expect it to be challenged in a contract dispute in Vietnam.

4. Arbitration Clause Quality and Party Binding

Defective arbitration clauses are a major source of escalation in contract disputes in Vietnam.

Typical issues include:

• incorrect party names,
• references to affiliates instead of contracting entities,
• conflicting dispute resolution clauses.

Vietnamese courts could interpret arbitration clauses narrowly and literally.

For instance, a Vietnamese court refused to recognize arbitration jurisdiction where the clause named a parent company instead of the actual contracting party, even though the commercial relationship was clear.

Therefore, general counsels would note that arbitration clauses are not boilerplate

5. Contract Scope and Dispute Scope Alignment

Many contract disputes in Vietnam arise when tribunals are asked to decide matters outside the contract’s scope.

Examples include:

• reliance on side letters,
• NDAs not covered by the arbitration clause,
• claims based on improperly executed amendments.

Tribunal authority derives strictly from party consent.

For instance, in one annulment case in Vietnam, a court held that the tribunal exceeded its mandate by deciding issues not expressly submitted by the parties, even though the issues were commercially connected.

It is important for the general counsels to remember to align contract scope and dispute scope carefully.

6. Mandatory Vietnamese Law and Contract Legality

Some contract disputes in Vietnam arise because the contract violates mandatory law.

High risk areas include real estate, financial, banking and other conditional sectors.

Even a favorable arbitral award cannot legitimize illegality.

For instance, a court in Vietnam declined to support an arbitral outcome where the underlying contract involved an unlicensed business activity, holding that enforcement would violate fundamental legal principles.

Therefore, for general counsels, compliance review is part of contract governance, not a post dispute exercise.

7. Contract Amendments and Post-Signing Governance

Disputes often arise from what happens after signing.

Common issues include:

• amendments signed by unauthorized persons,
• side letters contradicting the main contract,
• informal email modifications.

Courts may question whether such changes were validly made.

Therefore, for general counsels, it is necessary to apply the same authority and execution standards to amendments as to the original contract.

8. Contract Execution and Documentary Integrity

In Vietnam, a contract must not only exist, it must be provable.

This is not about litigation evidence created later.

It concerns execution discipline from day one.

Weaknesses include:

• inconsistent language versions,
• missing annexes,
• poor document retention.

For instance, in Vietnam, a court questioned enforcement where the parties submitted inconsistent versions of the contract, with unsigned annexes and unclear signing sequences. The dispute shifted from breach to existence.

Therefore, for the general counsels, documentary integrity is a contract issue, not a litigation issue.

Step-by-step: Manage Contract Disputes in Vietnam

Step-by-step: Manage Contract Disputes in Vietnam

Step 1: Confirm the parties and the signing authority

• Verify the Vietnamese counterparty’s legal name, registration number, and legal representative.
• Decide who will sign on your side and whether a Power of Attorney is needed.

Step 2: Lock the commercial deal terms

• Scope of work.
• Acceptance criteria.
• Payment milestones.
• Delivery terms.

Step 3: Choose governing law and dispute resolution strategy early

• Governing law of the contract.
• Arbitration vs court; if arbitration, specify institution, seat, language, number of arbitrators.

Step 4: Draft the arbitration clause like it’s the most valuable paragraph

• Ensure the clause binds the correct entities
• Ensure it covers contract, non contract claims, side letters, and amendments.

Step 5: Check Vietnam mandatory law

• Conditional sectors, foreign exchange, payment flows, interest, penalties, data protection and privacy regulations if relevant.
• If something is sensitive, add compliance representations and a lawful performance clause.

Step 6: Control amendments and side communications

• Make sure no amendment unless in writing and signed by authorized representatives.

Step 7: Execute cleanly and preserve documentary integrity

• Signed signature pages, stamped where used, annexes initialed, signed.
• Consistent bilingual versions and specify which language prevails.
• Centralized storage, originals and signing evidence.

Step 8: Build a dispute ready record while the relationship is still friendly

• Delivery, acceptance records, change orders, meeting minutes, payment confirmations.

FAQ: Questions Relevant to Contract Disputes in Vietnam

Q1: What causes contract disputes in Vietnam most often?

Authority issues, unclear formation, weak arbitration clauses, amendment chaos, mandatory law conflicts, and poor documentary integrity.

Q2: Can we sign a contract by email or scanned PDF in Vietnam?

Often yes in practice, but enforceability depends on clear evidence of mutual consent and authority. For higher risk deals, use clean execution formalities and preserve a reliable signing trail.

Q3: If we performed the contract, can the other side still argue the contract is invalid?

Yes. In contract disputes in Vietnam, performance does not always cure defects in authority, formation, or mandatory legal requirements.

Q4: What is the number one signing mistake foreign companies make in Vietnam?

Letting a counterparty’s commercial head sign without verifying legal authority or a valid Power of Attorney.

Q5: Do we need a Power of Attorney for a foreign director or manager to sign?

If the signer is not the legal representative shown on the business registry, a Power of Attorney is typically needed.

Q6: Should we choose Vietnam law or foreign law as governing law?

It depends on value of contract, deal type, regulatory exposure, assets location, and enforcement strategy. If performance and assets are in Vietnam, Vietnam law may reduce friction; but many cross border deals choose foreign governing law with a Vietnam seat or offshore seat depending on risk tolerance and of course the cost of disputes in relation to the value of the contract.

Q7: Where should we seat the arbitration (Vietnam vs others)?

Vietnam seat can be efficient for Vietnam centric disputes but is more formalistic. In the region, Singapore and Hong Kong are benchmark pro-arbitration seats with strong non intervention traditions. Choose based on where enforcement will happen and how much court supervision you can accept. 

Q8: Do Vietnamese courts enforce arbitration awards?

Vietnam is a New York Convention state, and enforcement is available, but outcomes depend heavily on clean procedure and strong contract documents.

Q9: What makes an arbitration clause invalid or risky in Vietnam practice?

Wrong party names, conflicting clauses, unclear seat, institution, clauses hidden in unsigned documents, or lack of proof both parties agreed.

Q10: Can a side letter or email change the contract?

It can unless your contract does not allow it.

Conclusion: Contract Governance Is Dispute Strategy

In Vietnam, contract disputes are rarely won by arguments alone.

They are decided by preparation, formality, and discipline.

Strong contracts:

• reduce jurisdictional challenges,
• simplify arbitration,
• improve enforceability.

For foreign general counsels, mastering these eight contract matters is the most effective way to manage contract disputes in Vietnam.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/disputes/contract-disputes-in-vietnam-8-facts.html

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