VIETNAM Law and Practice Contributed by: Thang Nguyen, Minh Nguyen and Nguyet Le, ACSV Legal
1. Legal System 1.1 Legal System and Judicial Order Vietnam’s legal system follows the civil law tradi - tion, noticeably influenced by continental Euro - pean models (particularly the French Civil Code). It comprises various legal instruments published in the official gazette, with decrees and circu - lars guiding implementation. Local governmental agencies may also issue official letters for further guidance on the implementation of any of these pieces of legislation. The judiciary consists of people’s courts (exer - cising judicial power) and people’s procura - cies (exercising prosecutorial and supervisory power), operating at local, regional and national levels. Under the current Law on Amendment to the 2024 Law on People’s Court Organisation that took effect on 1 July 2025 (“2025 Amend - ment Law”), the Supreme People’s Court serves as the highest judicial authority, followed by the Provincial-Level People’s Courts and the Regional People’s Courts. These courts handle appeals, cassation and retrials based on legal effect and protest status. While no specialised first-instance courts for bankruptcy, labour, or IP exist yet, the 2025 Amendment Law envi - sions establishing them within Regional Courts in major cities to enhance judicial specialisation. 2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments Foreign investment into Vietnam requires approval and licensing by the local authorities, with the scope and shape largely dependent on the nature of the envisaged business. The 2020 Law on Investment, which entered into force on 1 January 2021 and was amended in 2025,
retains a clear distinction between foreign and Vietnamese investors. A variety of different pro - cedures apply to foreign investors, defined by the volume and type of their desired Vietnamese engagement. Foreign investors are required to register their investment or obtain certain docu - ments before they can start with their investment projects. According to the law, when assessing the invest - ment conditions and procedures, a foreign investor is, or is considered as such: • an individual with a foreign nationality; • an organisation incorporated in a foreign jurisdiction; or • a Vietnamese-incorporated enterprise in the following cases: (a) more than 50% of its charter capital is held by one or more foreign investors, or a partnership that has a majority of partners who are foreign individuals in the case of a partnership enterprise; (b) more than 50% of its charter capital is held by one or more enterprises pre - scribed in (a) above; or (c) more than 50% of its charter capital is held by one or more foreign investors and one or more economic organisations prescribed in (a) above. From the perspective of a foreign investor, Viet - namese investment law makes a general dis - tinction between “conditional/restricted” and ”unconditional/unrestricted” business lines. The conditional/restricted lines, to which cer - tain additional requirements may apply, are for - eign activities in Vietnam in industries that are considered “sensitive” or ”crucial to the national interests of Vietnam”. Some restricted business lines may not be performed under foreign own - ership at all.
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