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As Vietnamese businesses look beyond national borders to expand their operations, Thailand, Indonesia, Laos, Cambodia, and China emerge as strategic destinations for investment. These markets offer significant growth opportunities but also present unique legal landscapes that investors must navigate carefully.
Following the success at the GC Summit 2024 event where ASL LAW presented on the topic of “Navigating M&A in Vietnam: Compliance with New Regulations on Personal Data Protection, IP Law, and Global Minimum Tax“, at the GC Summit 2025 event, held in collaboration with Legal500, ASL LAW has provided an overview of the essential legal factors that Vietnamese businesses should consider when investing in these five dynamic economies.
THE FULL PRESENTATION SLIDE CAN BE DOWNLOAD HERE.
During the presentation at the Legal500 GC Summit 2025 event, ASL LAW focuses on 4 main keypoints, including: Market Entry Strategies & Legal Formalities, Mitigating Legal Risks & Managing Disputes, Intellectual Property (IP) Protection in Foreign Markets, Trade Remedies & Anti-Dumping Risks for Vietnamese Businesses.
Market Entry Strategies & Legal Formalities
With the total oversea investment capital of USD 664,8 million FDI from Vietnamese investors flowing abroad in 2024, Laos, Indonesia, India are the 3 countries with the largest proportions to receive that investment, contributing to a total of 63% investment capital (the rest is other countries).
These investments are divided to professional activities in science and technology, manufacturing and processing industry, electricity production and distribution, and others, specifically into 164 new projects and 26 existing ventures abroad, up 57.7% in value as compared to the previous year, according to the Ministry of Planning and Investment’s Foreign Investment Agency.
The forms of oversea investment are:
- Establishing an economic organization in accordance with the regulations of the host country.
- Contributing capital, purchasing shares, or acquiring capital contributions in an economic organization abroad to participate in its management.
- Investing under contractual arrangements abroad.
- Buying and selling securities, other valuable papers, or investing through securities investment funds and other intermediary financial institutions abroad.
- Other investment forms as prescribed by the host country (if applicable).
For business lines, the prohibited sectors in general are:
(i) Narcotic substances, explosives, business activities related to human cloning, etc., as stipulated by investment laws and international treaties to which Vietnam is a signatory.
(ii) Sectors and industries involving technologies or products subject to export bans under Vietnam’s foreign trade management regulations, such as weapons, ammunition, endangered wildlife specimens, certain chemicals, etc.
(iii) Sectors and industries prohibited from business investment under the laws of the host country.
Investors may invest abroad in any sector or field that is not prohibited by Vietnamese law.
Banking, insurance, securities, journalism, broadcasting and television, or real estate business must obtain written approval from competent state authorities and/or relevant agencies as required by specialized laws governing each sector.
The common pitfalls for Vietnamese investors are:
- Long approval process
- Industry-Specific Restrictions
- Tax Audits & Investigations
- Foreign Exchange Control
- Other Legal & Compliance Risks
Mitigating Legal Risks & Managing Disputes
Vietnamese businesses expanding into Thailand, Indonesia, Laos, Cambodia, and China normally face legal challenges including differences in legal systems, oversea investment regulations, dispute resolution, and exit strategies.
Three main areas covered are:
- Choosing the Right Business Partner
- Contract Enforcement & Legal Disputes
- Exit Strategies & Closing a Business
Choosing the Right Business Partner
- A wrong partner can lead to fraud, misrepresentation, and legal non-compliance.
- Choosing the wrong partner can lead to significant risks, including fraud, misrepresentation, or violations of local legal regulations.
- Legal due diligence is crucial to minimizing risks.
Contract Enforcement & Legal Disputes
a) Arbitration
- Preferred for international commercial contracts due to efficiency and fairness.
- Key arbitration centers:
- SIAC (Singapore International Arbitration Centre)
- HKIAC (Hong Kong International Arbitration Centre)
- VIAC (Vietnam International Arbitration Centre)
- Benefits: faster, cost-effective, binding decisions, confidentiality.
b) Litigation in Local Courts
In some cases, businesses may need to resolve disputes through local courts. This method is typically applied to disputes related to:
- Real estate, as international arbitration may not always have jurisdiction.
- Labor, particularly when disputes involve local employees.
- Public regulations, such as taxes and business licenses.
However, Vietnamese companies may encounter some risks such as:
- Local courts may favor local businesses.
- Litigation may be time-consuming and costly.
- Enforcement of judgments in foreign countries can be challenging.
c) Mediation and Negotiation
- Encouraged before arbitration or litigation.
- Benefits: cost-saving, maintains business relationships, flexible and less adversarial.
- International arbitration is the most effective dispute resolution method.
- Contracts should include clear governing law clauses.
Careful contract drafting helps avoid legal conflicts and ensures smooth dispute resolution.
Exit Strategies & Closing a Business
As Vietnamese businesses expand into international markets, executing expansion strategies and maintaining business operations is not always smooth. In some cases, businesses may need to consider dissolving, restructuring, or withdrawing from international markets.
Particularly when operating in countries such as Thailand, Indonesia, Laos, Cambodia, and China, legal considerations related to closing or restructuring operations must be studied and carefully executed in compliance with local laws and international agreements.
Intellectual Property (IP) Protection in Foreign Markets
Trademark Registration is Essential: Businesses should proactively register trademark in Vietnam in key markets to prevent unauthorized third parties from claiming brand ownership.
Contractual Protections Matter: Formal agreements should clearly outline intellectual property rights and usage restrictions to prevent disputes and ensure enforcement.
Unfair Competition Risks: Unauthorized trademark registrations by business partners can lead to legal conflicts and brand dilution. Companies must monitor their trademarks to detect and challenge bad-faith filings promptly.
Enforcement Mechanisms: If a third party wrongfully registers a trademark, the rightful owner can challenge the registration, citing prior use, bad faith, or contractual violations – Please note that careful/meticulous documentation of the interaction between distributors can be a boon for trademark enforcement.
First-to-file implication: Given Vietnam’s first-to-file trademark system, it is essential to register first and be careful when hand over trademark to business partners whom may decide to steal the mark or use it in bad-faith, damaging the rights of rights holders.
International Trademark Strategy: Expanding businesses should register their trademarks internationally under systems like the Madrid Protocol to ensure broader protection and avoid regional disputes.
Trade Remedies & Anti-Dumping – Risks for Vietnamese Businesses
Antidumping and countervailing measures are being aggressively employed by major economies, and the number of investigations and instances of these measures worldwide has been on the rise.
In 2023, foreign authorities initiated 15 new trade remedy cases against Vietnamese exports. As of the end of August 2024, 257 trade remedy investigations conducted by 24 markets and territories on Vietnamese exports.
Vietnam’s proactive use of FTAs and the expansion of its export scale have enabled its products to be highly price competitive in the global market. In addition, the rapid growth in export volumes has generated intense competition against domestic industries in importing countries, leading to investigations and trade remedy measures.
Consequently, trade remedy investigations and the application of trade remedy measures may rise in the near future.
To counter and prepare for upcoming obstacles, Vietnamese businesses need to proactively update information from domestic authorities, coordinate with foreign partners, and prepare comprehensive records and data to be ready for the investigation process.
Most importantly, Vietnamese businesses should contact a reliable law firm specialized in oversea investment practices to receive real-time advice that best suits their activities.
THE FULL PRESENTATION SLIDE CAN BE DOWNLOAD HERE.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is the top-tier Vietnam law firm for Investment Services. If you need any advice, please contact us for further information or collaboration.
