The case against Mr Nguyen Duc Kien and its potential implication
The first hearings of the criminal cases against Mr Nguyen Duc Kien, former Board member of Asia Commercial Bank (ACB) and Ms Huynh Thi Huyen Nhu, former staff of Vietinbank, a large State-owned bank have raised many fundamental issues about the business law framework in Vietnam. Unfortunately, without a full transcript of the hearings, one cannot comment on the legal interpretation adopted by the courts.
That being said, newspaper reports about Mr Kien’s conviction of illegally doing business (tội kinh doanh trái phép) have shed some light about the court’s interpretation of “doing business” under Article 4.2 of the Enterprise Law. The background of the case is as follows:
Mr Kien set up two companies which do not register for the business lines of sale and purchase of shares but for other business lines;
These two companies acquire and/or sell shares in other companies;
The procurator takes the view that the two companies have illegally done business which are not recorded in their business registration certificates. Under Article 9.1 of the Enterprise Law, a company is required to do business within the scope of its business registration certificates;
Mr Kien takes the view that under Article 13 of the Enterprise Law, a company is entitled to acquire shares in another company. Therefore, there is no need for Mr Kien’s companies to register for the business lines of sale and purchase of shares. In practice, the approach taken by Mr Kien’s companies is widely common. Some business registration authorities even refuse to register the business line of sale and purchase of shares on the basis that this activity is permitted by the Enterprise Law already; and
The first instance court hold that because Mr Kien’s companies do not do any business other than sale and purchase of shares, these companies are considered as engaging in the business of sale and purchase of shares.
Article 4.2 of the Enterprise Law provides that “doing business” (kinh doanh) means the continuous conduct of one, several or all of the stages of the investment process, from production to sale of products or provision of services in the market for profits. There is no further interpretation of the term “continuous conduct”. Now, it seems that the court will consider a business conduct by a company to be a continuous conduct if such business conduct is the only business conduct of the company. In light of this interpretation, owners of companies in Vietnam will likely pay more attention to ensure that their companies will at least actually engage in some business lines as provided in their business registration certificates.
The State Bank of Vietnam (SBV) officially issued Circular 38/2026/TT-NHNN dated 31 July 2026 on foreign exchange management for foreign investment activities in Vietnam (Circular 38/2026). Effective from 18 August 2026, Circular 38/2026 replaces Circular 06/2019/TT-NHNN (Circular 06/2019) as amended by Circular 03/2025/TT-NHNN (Circular 03/2025), which has governed the direct investment capital account (DICA) regime since 2019. Circular 38/2026 also terminates Articles 11.3 and 11.4 of Circular 03/2025 on opening and use of VND-denominated accounts for conducting foreign indirect investment in Vietnam and amends Circular 16/2014/TT-NHNN on the use of foreign currency and Vietnamese dong accounts of residents and non-residents.