The scope of legal due diligence before an acquisition transaction in Vietnam, the limits of publicly available sources of information, the seven groups of issues commonly identified, and how findings are addressed through contractual tools.
About this article
Due diligence carries more weight in Vietnam. In many markets, a purchaser can verify most material information independently through public databases. In Vietnam, the information that has a decisive bearing on the value of an enterprise, such as tax arrears, social insurance arrears, disputes under resolution, secured transactions and the actual shareholding structure, cannot be searched publicly. That information can be obtained only through documents supplied by the seller. That is why the contractual mechanism of representations and warranties and of indemnity plays a greater role than under international practice.
Information updated to September 2026. This article provides general information and does not replace legal advice for a specific case. The appropriate scope of due diligence depends on the business lines, the scale and the structure of each transaction.
1. Due diligence must cover all material legal areas
| Item | Material content |
|---|---|
| Legal status | The Enterprise Registration Certificate, the charter, the minutes and resolutions of the managing bodies, and the validity of each amendment of the registration |
| Capital and ownership | The status of full contribution of the charter capital, capital contribution vouchers, the register of members or of shareholders, shareholders' agreements, pre-emption rights and transfer restrictions |
| Licences | Conditional business lines, the validity of sub-licences, and the conditions for maintaining a licence after a change of owner |
| Land and assets | The form of land use, its duration, the conditions for transfer, assets attached to the land, and assets currently mortgaged |
| Material contracts | Contracts with major customers and suppliers, credit contracts and lease contracts, and in particular change of control clauses |
| Labour | Labour contracts, the registration status of the internal labour regulations, the salary scale and payroll, the collective labour agreement, and arrears of wages and of benefits |
| Tax | Tax inspection and examination minutes, tax amounts still payable, input invoices carrying risk, and tax incentives currently enjoyed together with the conditions for maintaining them |
| Intellectual property | The registration status of trademarks, whether the registered holder is the company or an individual, transfer contracts, and software and source code |
| Disputes | Cases before the courts and before arbitration, customer complaints, and administrative sanction decisions |
| Personal data | A new item from 2026; see section 2 |
| Environment | The environmental licence, monitoring reports, and waste treatment |
2. Personal data protection compliance is a new due diligence item
The Law on Personal Data Protection No. 91/2025/QH15 and its implementing Decree No. 356/2025/ND-CP took effect on 1 January 2026. The framework lifts data protection obligations from decree to statute and adds several mandatory procedures.
During due diligence, the buyer should check:
- whether the enterprise has prepared and filed its personal data processing impact assessment;
- the dossier for transferring personal data abroad, if the enterprise has systems abroad or uses a foreign cloud provider;
- whether the enterprise has appointed a unit or staff responsible for personal data protection;
- evidence of data subjects' consent (silence does not count as consent);
- the procedures for handling data subjects' requests and for notifying incidents.
Because the obligation is new, most Vietnamese enterprises do not yet fully comply. The buyer should treat this as a risk area by default and cover it with a separate indemnity, rather than include it in the general warranties.
3. Every public source of information has its limits
| Source | What can be searched | Limits |
|---|---|---|
| The National Business Registration Portal | Name, tax code, head office, business lines, legal representative, charter capital and operating status | No shareholder list for JSCs and no beneficial owners. Details cost a fee. Data lags behind reality |
| The portal for the publication of court judgments and decisions | Judgments and decisions that have taken legal effect | Incomplete; many judgments are unpublished. No pending cases. No arbitral awards, as arbitration is private. Searching by company name is unreliable |
| The digital library on industrial property | Trademarks, inventions and industrial designs for which an application has been filed or a grant made | Published with a delay. Does not show unregistered licence agreements. Does not cover copyright or trade secrets |
| The land information system | A search of files by file code or by certificate code | No free search by land user name. Does not show mortgages or disputes |
No public source exists for secured transactions searched by company name, detailed tax debts, social insurance arrears, pending cases or the actual shareholding structure. For all of this information, the buyer depends on the seller's documents and warranties.
4. Seven groups of issues commonly found
4.1. Charter capital is often not fully contributed
The time limit for contributing capital is 90 days from the date of issue of the Enterprise Registration Certificate. In practice, it is common for an enterprise to declare a high level of charter capital in order to project an image but not to contribute it in full, or to contribute in cash without supporting vouchers. The consequences include the personal liability of members and shareholders for the portion not contributed, the possibility of having to adjust the charter capital downwards, and a direct effect on valuation.
4.2. Land may not meet the conditions for transfer
To transfer a land use right, the enterprise must meet the following conditions: a land use right certificate has been issued; the land is not subject to a dispute; the land use right is not under distraint and is not subject to a measure securing the enforcement of a judgment; the land use term has not expired; and no interim emergency measure applies.
For land leased with annual rent, the enterprise cannot transfer the land use right; it can transfer only its lease rights under the land lease contract, if it meets the conditions set by land law. This is often misunderstood, because enterprises treat the leased area as an asset they can value and sell freely.
4.3. Labour records are often not fully compliant
Common breaches include repeated seasonal contracts used to avoid insurance, no insurance for probationers who should be insured, unregistered internal labour regulations, no salary scale and payroll, and an expired collective labour agreement.
Unregistered internal labour regulations are more serious than they look: without them, the enterprise has no basis for disciplinary dismissal, so every past dismissal risks being treated as unlawful.
4.4. Social insurance arrears may lead to criminal liability
The Law on Social Insurance No. 41/2024/QH15, in force from 1 July 2025, draws a clear distinction between two forms of conduct. Late payment means paying late or paying an insufficient amount after the time limit, or failing to register for participation within 60 days. Evasion of payment means failing to register or registering incompletely for more than 60 days, or failing to pay the amount registered for more than 60 days after a notice has been issued.
Sanctions include a charge of 0.03% per day on the amount paid late or evaded, an administrative fine, and possible criminal liability under the Criminal Code. Amounts outstanding up to 30 June 2025 fall under the old rules; the new rules apply from 1 July 2025.
4.5. Risky input invoices may be disallowed as deductible expenses
Input invoices from suppliers that have left their business address or stopped operating may be excluded from deductible expenses. The tax authority then recovers corporate income tax and VAT, plus late payment interest and fines. The buyer should therefore check the main suppliers against the tax authority's list of high-risk enterprises.
4.6. Sub-licences may have expired or never been obtained
The list of conditional business lines was reduced to 142 lines from 1 July 2026, and a number of lines have moved from a licensing mechanism to a mechanism of publication and post-licensing inspection. The purchaser needs to determine which group the business lines of the target enterprise fall within as at the time of the transaction, rather than relying on the former list.
4.7. Capital may be held through a nominee
This is common in sectors restricted for foreign investors. The law does not recognise nominee arrangements, which risk being treated as sham civil transactions. With beneficial owners now declared at the 25% threshold, such structures are hard to maintain and will come to light when the enterprise amends its registration after the deal.
5. Findings must be turned into contract terms
| Tool | Used where | Points of practice |
|---|---|---|
| Representations and warranties | The risk cannot yet be quantified | Separate warranties on capital contribution, tax, social insurance, land, personal data and the absence of nominee arrangements |
| Price reduction | The risk has been quantified and is all but certain to materialise | Settles the issue once, with no obligations surviving the deal |
| Escrow or retention of part of the price | The risk may arise in the future | Hold the amount for as long as tax can be recovered. Route escrow through the correct capital account |
| Conditions precedent | The issue can be remedied before closing | Approval of the share or capital purchase, economic concentration notice, completing unpaid capital, paying social insurance arrears |
| Indemnity | The specific risk is already known | Separate indemnities for tax and social insurance, outside the general cap |
6. The tax recovery period outlasts usual warranty periods
| Type | Limitation period |
|---|---|
| Recovery of tax | 10 years back from when the breach is detected |
| Recovery from a taxpayer who has not registered for tax | No time limit |
| Sanction of breaches of tax procedures | 02 years from the date on which the conduct took place |
| Sanction of tax evasion and incorrect declaration | 05 years from the date on which the conduct took place |
| Contractual disputes under civil law | 3 years from when the claimant knew of the infringement |
Tax warranties need their own survival period. The 10 year limitation period for the recovery of tax is much longer than a usual escrow period and is longer even than the statute of limitations for initiating a lawsuit over a contractual dispute. If a single survival period is applied to all the representations and warranties, the purchaser will lose the right to bring a tax claim precisely during the period in which the tax risk remains live. Tax representations therefore need a separate survival period that is longer.
The form of the deal determines succession to liability: if the purchaser takes a transfer of capital contributions or shares, the legal entity does not change, so the enterprise succeeds to all obligations, including obligations that have not been identified; in the case of a merger or consolidation, the acquiring company or the consolidated company succeeds to all rights and obligations; whereas if assets are purchased, the purchaser in principle does not succeed to the debts, but obligations towards employees still follow the assets.
7. The seller should run its own due diligence before negotiating
A transaction is completed only once the purchaser has passed through the administrative procedures, so the seller also has legitimate reasons to examine the purchaser. The matters the seller commonly verifies include the nationality of the investor and the effect of that nationality on market access conditions under international treaties; whether the business lines of the target enterprise fall within a restricted group; whether the purchaser is treated as an indirect foreign investor; financial capacity and the lawfulness of the source of funds; the ownership chain down to the ultimate individual, for the purposes of the declaration obligation after the transaction; and the ability to complete the procedures for opening an account at a bank.
A buyer that has these documents ready will shorten negotiations considerably, because these points delay deals more often than the due diligence findings do.
8. Due diligence underpins valuation and risk allocation
Legal due diligence in Vietnam has a feature that differs from many markets: most of the material risk lies not in publicly available sources of information but in documents controlled by the seller. That places the emphasis on three things. First, the purchaser needs to request the right documents in sufficient quantity from the outset, in particular tax inspection minutes, social insurance reconciliation minutes and capital contribution vouchers. Second, matters that cannot be verified need to be converted into representations and warranties backed by a sanction. Third, the survival period of the representations needs to be set by reference to the actual legal limitation periods, rather than by reference to commercial practice.