Legal Due Diligence in Vietnam | FDI Advisory | ECOVIS Vietnam Law

A due diligence report is only as useful as the judgment behind it. In Vietnam, that judgment depends on knowing where the paper trail and the operational reality diverge — a distinction that generic corporate document review rarely surfaces. ECOVIS Vietnam Law approaches legal due diligence as a risk-mapping exercise for deal teams, not a document inventory, built around the specific ways Vietnamese licensing, land, labour, and tax regimes create exposure that doesn’t show up on the face of a certificate.

The gap between what a license says and what’s actually approved

An investment registration certificate or business license reflects what was filed and accepted at a point in time. It does not necessarily reflect the scope of activity a target company is actually carrying out today, nor does it confirm that subsequent expansions, product line changes, or site additions were properly registered with the relevant provincial authorities. This gap widens over time as companies grow faster than their paperwork, and it is where undisclosed exposure tends to concentrate. Our review traces each licensed activity against what the target is operationally doing, checks whether capacity or output has outgrown the scope originally approved, and confirms that any amendments were filed with — and accepted by — the correct authority rather than simply notified internally. Where a target has expanded into export processing, added production lines, or changed its business lines without a corresponding license amendment, that is a finding that needs to reach the deal team before signing, not after.

Labour liabilities in factory and manufacturing acquisitions

Workforce-heavy targets carry a distinct category of liability that document review alone will not catch. Social insurance, health insurance, and unemployment insurance contributions are frequently in arrears or calculated on an understated salary base, creating a liability that compounds with the size of the workforce and the length of the shortfall. Labour contracts for large factory workforces are often standardized in ways that do not track actual role, tenure, or overtime practice, and probationary or fixed-term contract usage sometimes extends well past what is defensible. Overtime hour caps, night-shift and holiday premium calculations, and internal labour regulations registered with local authorities are common areas where practice has drifted from policy. Because labour claims in Vietnam tend to surface after a change of control — when employees are most attentive to their entitlements — we treat labour liability quantification as a distinct workstream, not a subsection of a general compliance check, and flag whether identified gaps are remediable pre-closing or represent an ongoing cost the buyer should price in.

Environmental permits and fire safety compliance for industrial sites

For manufacturing facility transactions, environmental and fire safety compliance sit alongside labour as the categories most likely to generate a post-closing enforcement action. Environmental approvals need to match the facility’s actual production processes and waste streams, not just its original design — a plant that has added a new process line, changed inputs, or increased wastewater or emissions volume may have quietly outgrown its environmental permit. Fire safety certification is inspected on a periodic basis by local authorities and is one of the few compliance areas that can trigger an immediate shutdown order rather than a fine, which makes any lapsed or conditional certificate a priority item rather than a footnote. Industrial zone compliance adds another layer: many industrial parks impose their own internal rules on top of national requirements, covering everything from infrastructure connection fees to zone-specific environmental standards, and a target’s standing with its zone management board is worth verifying directly rather than assuming from the lease file.

How we prioritize findings for deal teams, not just list them

A due diligence report that lists every finding with equal weight is not useful to a deal team working against a signing deadline. We rank findings by realistic exposure — quantified where possible, described in ranges where it cannot be — and separate issues that affect the decision to proceed at all from issues that affect price or structure. A finding that calls the target’s underlying land use rights or core license into question sits in a different tier from a finding that a handful of labour contracts need updating. For each material finding we indicate whether it is best addressed as a condition precedent to closing, a specific indemnity, a price adjustment, or a post-closing remediation item the buyer’s own management can absorb — because a report that only says “risk identified” leaves the hardest part of the decision to someone reading it after we’re gone.

Due diligence in Vietnam rewards local, on-the-ground verification over reliance on the document set a seller provides. If you are evaluating an acquisition, joint venture, or real estate investment and want a due diligence process built for decision-making rather than box-checking, we would be glad to discuss scope and timeline.

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