Due diligence on a Vietnamese target: corporate and capital history, licences, land, tax, labour and social insurance, environment, IP and data, litigation and anti-corruption, and the practical limits of searching in Vietnam

What due diligence in Vietnam can and cannot do

Due diligence has the same purpose in Vietnam as anywhere else: to find out what the buyer is acquiring, to price the risks it finds, and to decide which of them must be cured before completion, which can be left to warranties and indemnities, and which make the deal unattractive. What is different is the evidence. Vietnam has an excellent public business registry, the National Business Registration Portal, and every company files tax returns, social insurance declarations and, if foreign-invested, audited financial statements and investment reports. But there is no central register of court proceedings, arbitrations are confidential, the land register is searched office by office and generally with the owner's cooperation, and most primary records, from board minutes to tax assessments, exist only in Vietnamese. A great deal therefore depends on what the target discloses, on interviews with management, and on written confirmations obtained from the tax office, the social insurance agency and the bank.

Two practical points follow. First, a data room prepared for a foreign buyer frequently contains translations or summaries prepared by the seller; the buyer's lawyers should review the Vietnamese originals of the documents that matter, because the original is the one a court, the tax authority or the registration office will read. Second, the scope should be risk-based. A manufacturing target in an industrial park, a distributor with hundreds of employees and a technology company holding personal data present very different risk profiles, and a checklist applied mechanically produces long reports and few useful findings. The sections below set out the areas a buyer of a typical foreign-invested or domestic Vietnamese company should cover, with the legal basis for each.

Corporate: registration history, capital, owners and charter

Start with the ERC history. The National Business Registration Portal shows the current registration and the published changes; the target should provide every version of its ERC and, if foreign-invested, every version of its IRC, so the buyer can trace changes of owners, capital, business lines, address and legal representative and match each to a resolution and a filing. Gaps, such as a change of owner that appears in the accounts but not in the registry, are common in older domestic companies and must be regularised before completion.

Charter capital deserves particular attention. Members and shareholders must pay the registered charter capital within 90 days of the ERC (FAQ 13), and Law No. 76/2025/QH15 made under-contributed capital a prohibited act. The buyer should match the capital recorded in the ERC with the bank evidence of each contribution and, for a foreign-invested company, with the statement of its investment capital account, because that statement is what later supports the repatriation of capital (FAQ 70). In-kind contributions need a valuation and evidence of transfer of title. Decree No. 296/2026/ND-CP now expressly bars holding capital in another person's name, so a nominee structure, often used in the past to hold a foreign investor's interest in a restricted sector, is a serious defect rather than an informality: it should be unwound, with the Article 21 registration if required, before the buyer acquires anything.

Finally, check the beneficial owner declaration under Law No. 76/2025/QH15 and Decree No. 168/2025/ND-CP as amended (Beneficial ownership and transparency), the charter and any shareholders' agreement, the approvals for past related-party transactions and major asset sales, and the authority of the legal representative, including any written authorisation to a resident where the representative lives abroad (Legal representative and governance).

Licences, conditional lines and the investment project

A foreign-invested target holds an IRC for each project, and everything in it is an undertaking: the capital contribution schedule, the implementation timetable, the objectives and any incentives. Check that capital has been contributed on schedule, that the project has not fallen 24 months behind without an approved extension (a ground for termination under Article 36 of Law No. 143/2025/QH15), that changes to the main contents were registered as adjustments, and that the quarterly and annual investment reports under Article 47 of the law and Article 94 of Decree No. 96/2026/ND-CP have been filed (Reporting and ongoing obligations). Incentives must be traced to their legal basis and their conditions tested, including separate accounting for incentivised income, because an incentive claimed without meeting the conditions is recovered with interest and penalties.

Then list every sector licence: the conditional lines under Article 7 of the law (142 from 1 July 2026 under Resolution No. 66.17/2026/NQ-CP; 137 from 1 March 2027) each carry a licence, certificate or post-inspection condition (FAQ 91). Confirm that each licence is valid, held by the target rather than by a related company or an individual, compatible with the post-completion foreign ownership, and not subject to a change-of-owner approval or notification. For trading and retail, check the business licence and retail outlet licences and the transition to Decree No. 342/2026/ND-CP from 18 October 2026. Environmental, fire safety and construction approvals for the target's facilities belong in the same list.

Land and real estate

Land is frequently the most valuable and most problematic asset of a Vietnamese target. A foreign-invested company holds land use rights only by State lease or allocation, by sublease in an industrial park, or by receiving rights from a land user in defined cases, and its rights depend on whether rent is paid annually or once for the whole term (FAQ 42). The buyer should verify each certificate against the register at the land registration office, check the land use purpose, term and payment method, recorded mortgages, unpaid land rent or land use fees, planning status and any recovery notice, and confirm that the land is being used on schedule, since land unused for 12 months, or 24 months behind schedule, can be recovered under Article 81 of the Land Law (FAQ 47). The method, the documents and the security over land are set out in Title due diligence and security over land; land in a border or coastal commune also triggers the Article 21 registration and a defence and security opinion (Acquiring a Vietnamese company).

Tax

Tax is the area where a Vietnamese target most often carries hidden liabilities. Law No. 108/2025/QH15 on Tax Administration, in force from 1 July 2026, allows the tax authority to collect underpaid tax for up to ten years back, and late payment attracts interest of 0.03% a day (FAQ 30). The buyer should obtain the tax account statement showing no overdue amounts, every tax audit and examination report for the open years and how it was settled, and the CIT finalisations. The recurring problem areas are: input VAT claimed on invoices from suppliers that turn out to be non-compliant or on purchases of VND 5 million or more paid in cash; expenses disallowed for lack of lawful invoices; incentives claimed without meeting their conditions; foreign contractor tax not withheld on fees, interest and royalties paid abroad, including to the seller's own group (Foreign contractor tax and tax treaties); and transfer pricing, where the related-party disclosures, local and master files and the 30% EBITDA cap on net interest must comply with Decree No. 255/2026/ND-CP for 2026 and its predecessor for earlier years (Transfer pricing, interest and the global minimum tax).

Two transaction-specific points close the tax review: who will declare and pay the seller's tax on this sale, and whether earlier indirect transfers in the target's ownership chain were declared, since Law No. 108/2025/QH15 places the obligation on the Vietnamese entity. A tax due diligence checklist is in Tax on share transfers and dividends.

Labour, social insurance and foreign staff

Review the employment contracts, internal labour rules and their registration, collective agreements, salary scales, the grassroots employee representative organisation or union, and pending disputes. The most common liability is social insurance: under-declared salaries, employees on service contracts who are in substance employees, and arrears of contributions. Late contributions under Law No. 41/2024/QH15 on Social Insurance attract interest at 0.03% a day, deliberate evasion is an offence, and from 1 July 2026 the social insurance agency may petition for the bankruptcy of an employer that has not responded to its demands for three consecutive years (Article 38(3), Law No. 142/2025/QH15). A written confirmation of the contribution position from the social insurance agency is the best evidence. Check also severance and job-loss allowance exposure for long-serving staff (Termination, severance and redundancy), work permits or exemptions for every foreign employee and manager, and, where the deal will lead to restructuring, the labour usage plan that Article 43 of the Labour Code requires on a change of ownership, merger or sale of assets.

Environment, intellectual property and personal data

For any target with physical operations, confirm the environmental impact assessment approval or registration and the environmental licence required under Law No. 72/2020/QH14 on Environmental Protection, as simplified by Law No. 146/2025/QH15 from 1 January 2026, inspection records, wastewater and hazardous waste arrangements and any penalties (FAQ 89). Contamination and non-compliant discharge are liabilities of the operator and do not disappear with a change of owner.

Vietnam is strictly first-to-file for trademarks, so confirm that the marks the business uses are registered in Vietnam in the target's name rather than the founder's or a distributor's, and that patents, software and copyright are owned or properly licensed, with technology transfer agreements registered where the law requires (Trademarks and brand protection). For personal data, Law No. 91/2025/QH15 has applied since 1 January 2026: check the processing impact assessment and, for transfers abroad including to group servers, the transfer impact assessment filed with the Ministry of Public Security, together with breach history and the data localisation position under Law No. 116/2025/QH15 on Cybersecurity (Personal data protection). Fines for unlawful cross-border transfers can reach 5% of prior-year revenue under Decree No. 330/2026/ND-CP (FAQ 83).

Litigation, anti-corruption, related parties and the limits of searching

There is no central register of litigation in Vietnam. The Supreme People's Court publishes many judgments and decisions online, but not all, and they are often anonymised; arbitral proceedings at VIAC and other centres are confidential; and enforcement matters sit with the civil judgment enforcement agencies. The buyer therefore relies on a disclosure schedule from the target, a management interview, searches of the published judgments, enquiries of the target's lawyers, and a written statement of pending claims. The secured transactions registry of the Ministry of Justice can be searched online for registered security over movable assets (FAQ 80), while mortgages over land use rights appear only in the land register.

On anti-corruption, Law No. 36/2018/QH14, amended by Law No. 132/2025/QH15 from 1 July 2026, requires enterprises to adopt codes of conduct and internal controls, and the Penal Code criminalises bribery of public officials and of office-holders in private organisations from a VND 2 million threshold, though only individuals can be convicted (FAQ 88). Review payments to intermediaries, licensing agents and customs brokers, gifts and hospitality to officials, and the target's dealings with State-owned customers; a buyer subject to the US Foreign Corrupt Practices Act or the UK Bribery Act carries its own exposure for past conduct it fails to address. Banks apply the Law on Anti-Money Laundering, and Vietnam remains on the FATF increased-monitoring list, so source-of-funds questions will be asked of the buyer too. Finally, related-party dealings with the sellers, their families and companies, such as supply contracts, leases, loans and guarantees, must be identified, approved under the Law on Enterprises, priced at arm's length and, where they will continue, put on documented terms.