“Shadow” Directors
In other jurisdictions, a shadow director is commonly understood as a person in accordance with whose directions or instructions the directors of the company are accustomed to act. The concept of shadow director is to capture those who are not formally directors of a company but actually control such company through actions of the directors of such company.
Vietnamese law does not contain the concept of shadow directors. Instead, Vietnamese law adopts a “form over substance” approach whereby a person is regarded as a Director of a public Joint Stock Company (Public JSC) if:
- such person satisfies the conditions of being a Board Member and a General Director; and
- such person is appointed by the Shareholders Meeting as a Board Member or by the Board as the General Director of the Public JSC.
In Vietnam, it is not an uncommon practice for controlling or influential shareholders of a Public JSC to interfere the operation of the Public JSC through the Board of such Public JSC. For example,
- the State Capital Investment Corporation (SCIC), a large holding State-owned company with controlling stakes in many companies in Vietnam, expressly requires its representatives who sit on the Board of a joint stock company to vote according to instructions given by the SCIC on various matters; and
- Certain Large Public JSCs such as Asia Commercial
Bank and FPT
Corporation
in Vietnam have also created “Founding Committee” (Hội đồng Sáng lập) comprising of former Board Members or influential shareholders of the relevant Public JSC. The Founding Committees of these Public JSCs are entitled to attend meetings of the Board, make recommendation and advice to the Board.
If the Boards of these Public JSCs regularly act in accordance with instructions of SCIC or the Founding Committee then SCIC or members of the Founding Committee may be regarded as shadow directors of these Public JSCs under the law of other jurisdictions. However, the lack of provisions regulating shadow directors under Vietnamese law would make it more difficult for imposing statutory duties of a Director to controlling or influential shareholders of Public JSCs to interfere the operation of a Public JSC through the Board of such Public JSC.
That being said, in theory, under certain provisions of Vietnamese law, a shadow director of a Public JSC may still potentially be subject to liabilities of the Directors of such Public JSC:
- Under Article 8 of the Enterprise Law, a Public JSC is entitled to operate and run its business in its own discretion. In addition, Article 11.7 of the Enterprise Law prohibits any action, which prevents shareholders of a joint stock company from exercising their rights in accordance with the Enterprise Law and the charter of the company. If a controlling or influential shareholder interferes the operation of a Public JSC through the Board of such Public JSC then such controlling or influential shareholder may be arguably regarded as preventing other shareholders from exercising their shareholders’ right or interfering the right of the Public JSC to run its business in its own discretion.
- Article 80.5 of the Enterprise Law provides that a shareholder holding ordinary shares in a joint stock company must bear “personal liability” where such shareholder performs one of the following acts in any form in the name of the company: (1) to breach the law; (2) to conduct business and other transactions for the personal benefit of itself or other organisations or individuals; or (3) to pay premature debts where the company is likely to be in financial danger.
- Article 147 of the Enterprise Law prohibits a parent company from interfering with the operation of its subsidiaries other than by exercising the right of a shareholder in its subsidiaries. If a manager of a parent company interfering with the operation of its subsidiaries then the manager may be jointly liable for the damages caused to the subsidiaries.
On 15 May 2026, the Government issued Resolution No. 66.17/2026/NQ-CP (the Resolution 66.17 or the new), slimming down the list of conditional business sectors currently set out in Appendix IV of Investment Law 2025 (the old).
Resolution 66.17 will take effect on 1 July 2026 and is set to expire on 28 February 2027, by which time the Government expects the National Assembly to formalise these adjustments through an amendment to Appendix IV. Although there would be a question about the effectiveness of the Resolution 66.17 over the Appendix 4 of Investment Law 2025 and how the investment authority will apply in practice, the investor may, in the meantime, treat the Resolution 66.17 as the working text for the next 9–10 months while following up on the law amendments.
Under Article 41 of the Law on Real Estate Business 2023 (Real Estate Business Law), a real estate project (Project) eligible for transfer may follow one of two sets of legal procedures, depending on how it was approved. While the difference may appear procedural at first glance, it has significant implications for when the transfer transaction is legally completed, and for what the parties can (or cannot) do if the transaction ultimately falls through. This post discusses the two procedures and the practical implications arising from the distinction between them.
Vietnam has temporarily raised several general economic concentration notification thresholds under Resolution No. 66.18 of the Government dated 18 May 2026 (Resolution 66/2026), a practical change for M&A transactions as fewer deals should be caught solely by Vietnamese assets, Vietnamese turnover or transaction value.
On 3 September 2025, the Ministry of Finance (MOF) released the Official Letter no. 13629 addressing questions related to difficulties and obstacles arising from legal regulations in the finance and investment sector. This correspondence has several notable issues that are summarized below. While some of the MOF’s guidance offers welcome flexibility and operational reassurance, others fall short of providing clear or comprehensive clarification, leaving important gaps unresolved and inconsistencies with other legislation unaddressed.
Delegation by the General Meeting of Shareholders endorsed in principle (Query no. 29)
Query/Issue raised:
Current regulations regarding delegation/authorisation (both could be translated to/from "uỷ quyền" in Vietnamese) by the General Meeting of Shareholders (GMS) to the Board are unclear and conflicting. […]
A recurring issue in Vietnam corporate governance is whether a former member of the Board of Directors can be appointed as an “independent” Board member in the subsequent term, provided that all other statutory criteria are satisfied. This typically arises where companies want to retain a former board member while still complying with independence requirements under Article 155.2 of the Enterprises Law 2020 as amended in 2025 (Enterprises Law 2020).
Under Article 155.2(dd) of Enterprises Law 2020, an independent Board member must “not hold the position of member of the Board of the company within the last 05 years or longer unless he/she was designated in 02 consecutive terms.”
Vietnamese law currently lacks a formal definition of “latent defect” (khiếm khuyết ẩn) and a clear mechanism for allocating liability once such defects arise. This regulatory vacuum often leads to prolonged disputes between the Employer and the Contractor, particularly when the construction contracts do not include explicit risk allocation.
For the purpose of our discussion below, a “latent defect” is defined as a fault or flaw in construction works/item that is not discoverable through a reasonably thorough inspection at the time of handover.
When companies think about data protection, they usually focus on “visible” data like names, email addresses, or bank details. However, there is a hidden layer called metadata - essentially “data about data” - that often gets ignored.
Under Vietnam’s new personal data protection rules, overlooking metadata is a major risk. If metadata can be used to identify a specific person, it falls under the same strict rules as regular personal data.
What is Metadata? The “Digital Footprint”
Metadata is information that describes the context of a file or a message rather than the content itself. Even if you remove a person’s name from a file, the metadata can still point directly to them.
Vietnam is currently at a pivotal stage of infrastructure modernization. To meet the immense demand for capital, the State has moved to revitalize private sector participation, most notably through the “Build – Transfer” (BT) model.
In a typical BT arrangement, a private investor finances and constructs an infrastructure project, then transfers it to the State upon completion. In return, the State “pays” the investor with land funds, allowing them to develop a “reciprocal project” (dự án đối ứng) to recover their capital and generate profit. While this mechanism is essential to stimulate private sector participation, the recent new legal framework for BT projects may raise significant concern regarding the land access privileges granted to BT investors compared to their counterparts in the general real estate market. In particular,
The recently issued Case Law No. 81/2024/AL (CL 81) introduces a precedent that allows creditors to bypass the standard statute of limitations by re-characterizing an unpaid contractual debt as a property reclamation claim upon the mutual termination of the contract and an agreement on the payable amount. Below are a few of our observations regarding CL 81.
Summary of the Case
The dispute originated from a service contract between Company M (the Service Provider) and Company A (the Client). After the Service Provider performed its services, the parties mutually agreed to terminate the contract. Subsequently, the Client explicitly confirmed in writing the specific amount of the service fee it owed to the Service Provider and the late payment interest but ultimately failed to make the payment. When the Service Provider filed a lawsuit to recover the unpaid amount, the Client requested the court to dismiss the case, arguing that the 3-year statute of limitations for a contractual dispute had already expired.
For investors in Vietnam, "contributing capital" to a company can mean two very different things: becoming a legal owner (member/shareholder of a company) or simply being a business partner. A recent case law no. 78/2025/AL clarifies this distinction and indicates that several pieces of evidence may be considered to prove company member/shareholder status.
Case Summary
In this dispute, Mr. H, the plaintiff, provided significant funds to D Limited Liability Company, which was managed by his relatives. Although Mr. H received the profit distribution for over a decade and signed minutes acknowledging his contribution, Mr. H was never officially recorded as a member of the company in the enterprise registration certificates (ERC) or the company’s charter.
When partnering with government agencies (G2B), the risks often come from policy changes and the adoption of new legislation, causing obstacles, delays, and payment backlogs in PPP contracts (especially BT contracts). Following the establishment of Steering Committee 751 (Ban Chỉ Đạo 751) to resolve investment projects with pending legal issues, the Government has recently prepared a Resolution Draft (the Draft) to address approximately 160 transitional BT projects still facing legal obstacles (such projects, “Pending BT Project”).
Focusing specifically on Pending BT Projects where land-use rights serve as the State’s payment mechanism, the following analysis highlights critical issues arising from the proposed changes introduced by this Draft:
On 31 December 2025, the Government issued Decree 356/2025 guiding the implementation of the PDPL 2025, which took effect on 1 January 2026. Decree 356/2025 provides critical detailed guidance and, notably, resolves several ambiguities under the PDPL 2025 framework. This post highlights the key takeaways from this new regulation.
1. Expansion of "sensitive personal data": ID Cards and login credentials
As compared to the Draft PDPL Decree, Decree 356/2025 expands the scope of sensitive personal data to explicitly include:
On 11 December 2025, the National Assembly adopted new investment law (Investment Law 2025). On this blog, we discuss some key changes in the new Investment Law 2025.
Clarification of business investment conditions
The Investment Law 2025 refines the definition of business investment conditions (Điều kiện đầu tư kinh doanh) by introducing an explicit exclusion: these conditions no longer encompass technical standards and regulations issued by competent authorities concerning product or service quality. This addition narrows the scope of what constitutes a "conditional business line", distinguishing administrative market-entry conditions from mere technical product standards.
In a significant move to streamline the execution of the Land Law 2024, the National Assembly of Vietnam recently passed Resolution 254/2025 on specific policies and mechanism to resolve obstacles in implementation of the Land Law 2024. Effective from 1 January 2026, Resolution 254/2025 is intended to apply alongside the Land Law 2024 and prevails in case of conflict. In essence, Resolution 254/2025 could be considered as an amendment to the Land Law 2024.
In this post, we will summarize the key changes introduced under Resolution 254/2025.
1. Expanded Scope for Land Recovery
Resolution 254/2025 introduces three additional scenarios under which the State may recover land to promote socio-economic development. Specifically, it now includes:
On 18 December 2025, the Vietnamese government issued Decree 323/2025 on the establishment of Vietnam International Financial Center (VIFC). Decree 323/2025 takes effect immediately and provides guidance for Article 8 and 9 of Resolution 222/2025 of the National Assembly on VIFC. In this post, we discuss some interesting points of Decree 323/2025
1. Single or multiple units
The National Assembly intends that VIFC is one single unit. To confirm this intention, Decree 323/2025 provides that VIFC is a unified legal unit (thực thể pháp lý thống nhất in Vietnamese). However, Vietnamese law does not have definition of legal unit (thực thể pháp lý). In addition, this provision of Decree 323/2025 also seems to contradict with Resolution 222/2025 which defines VIFC as an area with defined geographical boundaries.
However, by locating that single unit into two separate location, putting it under management of multiples authorties, and giving each location a different set of priorities, it is doubtful on how the operation of VIFC can be unified. This is evidenced by:
The VIFC is oddly named as “Viet Nam International Financial Center in Ho Chi Minh City (VIFC-HCMC) and Viet Nam International Financial Center in Da Nang City (VIFC-DN)” which compries two individual names within one single entity name.
The Operating Authority and Supervisory Authority of VIFC have legal person status, which implied that these authorities’ legal responsibility is independent with VIFC’s legal responsibility.
The Law on Artificial Intelligence (AI Law), which was passed by the National Assembly on 10 December 2025, is arguably among the most anticipated pieces of legislation of Vietnam in 2025.
Unfortunately, similar to the Law on Digital Technology Industry, Vietnam’s AI Law still feels like a half-baked legislation, which makes it hard to clearly identifying the key players in the artificial intelligence (AI) value chain. This article would examine several key terminologies under the AI Law.
To retain talent after investing in expensive training, employers often require employees to sign a training contract covering, among other things, work commitment and reimbursement of training costs. In that context, the critical legal question arises if there is a conflict between the provisions of the training contract and the employment contract which of the two will prevail. For example, if an employee exercises their right to terminate the employment contract under the Labor Code, can they disregard the work commitment and avoid reimbursement penalties stipulated in the training contract?
Under Data Law 2024 and the Law on Personal Data Protection 2025 (PDPL 2025), several data-related services, including “personal data processing service” (dịch vụ xử lý dữ liệu cá nhân), personal data protection service (DPO Service), data intermediary service, data trading floor and data synthesis and analysis service (collectively, New Data-Related Services) are now designated as conditional business sectors. The New Data-Related Services (which could include dozen of sub-services) are subject to specific licenses and operational conditions. In the past, data processing or exploitation services in Vietnam were not classified as conditional business lines, allowing providers to operate with limited regulatory prerequisites.
In short, the Government has arguably created (or at least intended to create) more than just a regulatory system; it has established a complex compliance economy. This new framework tethers businesses to a costly ecosystem of mandatory intermediaries, from licensing consultants to training centers and credit rating agencies. To remain operational, enterprises must now absorb the dual burden of initial licensing fees and the recurring costs of maintaining qualified staff and ratings. As these obligations mount, the pressing question remains: will this expensive bureaucracy actually reduce the daily scam calls and messages suffered by Vietnamese citizens, or simply increase the cost of doing business?