Competition Law in Vietnam | Legal Advisory | ECOVIS Vietnam Law

Beyond the notification and compliance obligations already flagged, competition law in Vietnam functions as a live operating risk rather than a one-time filing exercise. The Vietnam Competition and Consumer Authority (VCCA) sits inside the Ministry of Industry and Trade and has grown into an active regulator, not a dormant one — which means the practical questions foreign investors and manufacturers face are less “does this law apply to us” and more “when in our deal cycle, our distribution contracts, and our internal reporting lines does it bite.” The sections below walk through those pressure points in more operational detail.

When an M&A deal needs merger control notification

Merger control in Vietnam is triggered by economic concentration thresholds set under the Competition Law 2018 and Decree 35/2020/ND-CP, and the analysis is not limited to the target company’s own revenue or asset base in isolation. Regulators look at the combined market position of the acquirer’s group and the target, which means a foreign buyer with an existing Vietnam footprint — a manufacturing subsidiary, a distribution joint venture, an existing minority stake — can trip the threshold on a deal that looks small when viewed only through the target’s financials. This is one of the most common blind spots in inbound M&A: deal teams assess the target in a vacuum and miss that the acquirer’s own group presence pushes the transaction into notifiable territory. A second frequent pitfall is timing — treating merger control as a closing-condition afterthought rather than building the notification and review window into the transaction schedule from term sheet stage, which can force renegotiation of long-stop dates when the filing surfaces late.

Distribution and agency agreements: where vertical restraints creep in

Vertical restraint risk rarely enters through a clause labeled as such — it enters through standard-looking distribution and agency terms that were drafted for a different jurisdiction and copied into the Vietnam agreement without adaptation. Resale price maintenance provisions, exclusive territory carve-outs, minimum purchase commitments tied to penalty clauses, and non-compete obligations extending past the term of the agreement are the recurring categories that draw scrutiny. For manufacturers building out a distributor or agent network across Vietnam’s provinces, the risk compounds when the same restrictive template is rolled out to multiple distributors, because a pattern across the network reads differently to a regulator than an isolated clause in one contract. A practical compliance program treats the distribution agreement template itself as the control point — reviewing it before network rollout, not after a regulator or a disgruntled distributor raises it — and keeps a defensible rationale on file for any territorial or pricing restriction that is commercially necessary.

Market dominance thresholds and what they mean in practice

The 30% market share marker is often treated as a bright line, but in practice the harder question is defining the relevant market in the first place — product scope and geographic scope both shape whether a company sits above or below the threshold, and reasonable people can disagree on where the line falls for a given product category. Foreign manufacturers with a strong position in a narrow product niche sometimes assume they are safe because their overall Vietnam revenue is modest, without realizing that the relevant market for dominance purposes may be defined narrowly around their specific product line, where their share looks very different. Once a company is assessed as dominant, the exposure shifts from merger-style pre-clearance to ongoing conduct risk: pricing behavior, refusal to deal, and terms imposed on distributors or customers all get evaluated against a different, stricter standard than they would for a non-dominant player. Companies approaching or near this threshold benefit from a periodic market-position review rather than a one-off assessment, since market share shifts with competitor entry, exit, and the company’s own growth.

The VCCA’s expanded investigative powers

The Competition Law 2018 gave the VCCA broader investigative tools than its predecessor regime, and companies operating in Vietnam should plan for the possibility of inquiry rather than treat investigation as a remote scenario reserved for market leaders. In practice this means document retention discipline matters well before any inquiry begins — pricing decisions, distributor communications, and internal competitive analysis should be capable of withstanding scrutiny on their own terms, because they may be requested and reviewed months or years after they were written. Companies that are contacted informally, whether through a request for information or a preliminary inquiry, gain the most from having internal escalation protocols already in place: who receives the request, who coordinates the response, and when outside counsel is brought in. Treating an early-stage inquiry as routine correspondence rather than escalating it promptly is one of the more damaging missteps we see, since the tone and completeness of the first response often shapes how the rest of the process unfolds.

Aligning Vietnam compliance with EU parent-group competition obligations

German and other European parent groups typically operate under compliance programs built around EU competition rules, and a common mistake is assuming those policies translate directly to the Vietnam subsidiary without local adaptation. The thresholds, notification triggers, and enforcement priorities differ enough that a distribution clause cleared under EU vertical restraint guidance may still need separate review under Vietnam’s framework, and vice versa. The more durable approach is a two-layer compliance structure: group-wide principles set centrally, with a Vietnam-specific overlay that translates those principles into locally accurate thresholds and reporting lines for the local subsidiary or joint venture. This also matters for internal audit and group reporting — where a European head office expects standardized competition risk reporting across subsidiaries, the Vietnam entity needs a reporting format that reflects local law accurately rather than a generic template that assumes EU concepts apply unchanged.

Competition law exposure in Vietnam tends to surface at the worst possible moment — mid-negotiation on a deal, mid-rollout of a distribution network, or mid-response to a regulator’s letter. Building the assessment into deal and contract processes earlier avoids that. ECOVIS Vietnam Law works with foreign investors and manufacturers to identify these exposure points before they become live issues.

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