On the morning of May 25, 2026, the Pre-DAVAS 2026 Da Nang event organized by BRIDGENT officially took place in Da Nang. The event served as a high-level dialogue forum gathering leaders of Da Nang City, representatives of governmental authorities, and numerous domestic and international investors and economic experts to shape strategic directions and promote high-quality investment inflows into the region.
At the invitation of the Organizing Committee, Le Thi Dung – Doctor of Laws, Managing Director of Siglaw Firm, and Vice Rector of Dong Do University – attended the event and delivered a highly practical keynote presentation titled: “Operational Legal Issues Frequently Underestimated by Investors in Vietnam.”
At the forum, alongside the strategic development orientations and outstanding investment incentives introduced by the leadership of Da Nang City and the Investment Promotion and Support Board (IPA Da Nang), Dr. Lawyer Le Thi Dung provided an in-depth perspective focusing directly on the post-licensing operational stage of enterprises.
With more than 14 years of experience advising FDI projects and corporate governance matters, Dr. Le Thi Dung emphasized that while the openness and determination of local authorities create a solid foundation for investors, proactive compliance by enterprises themselves is the true cornerstone of sustainable investment. Once the initial licenses – the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) – are granted, the real business journey only begins. The subsequent operational phase contains critical issues that investors must pay close attention to, yet these are often overlooked:
Understanding local planning regulations and obtaining the necessary sub-licenses for the appropriate project type
Many foreign investors mistakenly believe that possessing an IRC and ERC allows them to commence operations immediately. In reality, project locations must strictly comply with urban planning, land-use planning, and local industry zoning regulations. Numerous FDI enterprises encounter deadlocks after leasing factories or offices, only to discover that their intended business lines cannot be registered because the location does not conform to local planning requirements. Furthermore, various “sub-licenses” (such as ENT licenses for retail, logistics licenses, educational permits, etc.) obtained after establishment are often the actual conditions required for lawful operations.
Strict standards relating to fire prevention and fighting and environmental permits
These are two sectors that Vietnamese authorities have tightened significantly in recent years. Technical regulations such as QCVN 06 on fire safety are continuously updated with increasingly stringent standards. The approval of fire prevention system designs, acceptance inspections, and completion of Environmental Impact Assessment (EIA) reports or environmental permits prior to operation now require substantially greater budgets and longer timelines than many investors initially anticipate. Investors should proactively complete these licensing conditions from the beginning to avoid project delays caused by lengthy approval procedures.
Human resource management and work permit regulations for foreign employees
Given that Vietnamese labor law strongly prioritizes employee protection, human resource management has become a legal challenge requiring exceptional precision from enterprises in order to optimize operating costs and prevent labor disputes. This strict regulatory framework is particularly evident in two key aspects:
Internal labor management (Internal Labor Regulations and disciplinary procedures): Issuing Internal Labor Regulations (ILRs) is not merely an internal corporate policy exercise. It is a mandatory process requiring registration with competent authorities and strict compliance with legal requirements in both form and substance. Labor disciplinary procedures in Vietnam are highly complex. If an enterprise misses even a minor procedural step – such as delayed notification to the trade union, incomplete meeting minutes, or failure to sufficiently prove employee misconduct – labor courts may immediately invalidate disciplinary or dismissal decisions. Consequently, enterprises may be required to reinstate employees and compensate for wages and emotional damages, resulting in extremely costly financial consequences.
Employment of foreign personnel (Work Permits): Vietnam’s tightening control over foreign labor is reflected in its rigorous two-tier approval process: labor demand explanation and work permit issuance. Authorities now scrutinize the alignment between the proposed job position, educational qualifications, and legalized professional experience documentation. A lack of deep understanding of this approval process often places FDI enterprises in difficult situations where they cannot deploy senior executives or technical experts to Vietnam on schedule, directly disrupting project operations.
Investors must proactively control transfer pricing and related-party transaction risks
For multinational corporations and large-scale FDI enterprises, internal transactions such as procurement of raw materials, leasing of assets, management service arrangements, or brand royalty transfers are essential components of global supply chain optimization. However, in Vietnam, these transactions are subject to strict tax oversight under Decree No. 132/2020/ND-CP on tax administration for enterprises engaging in related-party transactions.
One of the greatest practical risks today lies in the complacency of investors who equate intra-group cash flows with ordinary operational transactions, thereby neglecting the obligation to prepare Transfer Pricing Documentation, including Local Files, Master Files, and Country-by-Country Reports before annual tax finalization deadlines.
During tax inspections, if enterprises fail to provide sufficient documentation proving that related-party transactions comply with the arm’s length principle, tax authorities may entirely reject the internal pricing structure. As a result, enterprises may face reassessment of revenue, costs, and taxable profits, leading to massive corporate income tax arrears, escalating late payment penalties, and significant reputational damage regarding legal compliance in the Vietnamese market.
Foreign exchange control and capital flow management through DICA accounts
Vietnam’s foreign exchange control regime is designed to closely supervise capital flows in order to protect monetary stability and manage the balance of international payments. For foreign investors, the financial lifeline of every FDI project must operate through a single Direct Investment Capital Account (DICA) opened at a licensed commercial bank in Vietnam. All capital contributions, foreign loan disbursements, profit remittances, and loan repayments must pass through this designated account.
A common practical risk arises from technical errors in fund transfer methods due to misunderstanding the nature of DICA accounts. Many investors, following international practices, transfer charter capital or shareholder loans directly into ordinary current accounts or even personal accounts of founding members in Vietnam.
The legal consequences of this mistake can be extremely severe: such funds may not be recognized by banks and regulatory authorities as legitimate investment capital. Consequently, enterprises may be unable to complete capital increase procedures or register foreign loans with the State Bank of Vietnam, causing future financial flows to become effectively blocked. Enterprises may then be unable to remit profits overseas, repay foreign loans, or withdraw capital upon project liquidation.
Compliance with Personal Data Protection (PDPD) and cybersecurity regulations
Decree No. 13/2023/ND-CP on Personal Data Protection (PDPD) represents a major legal milestone bringing Vietnam closer to strict international standards comparable to the EU’s GDPR. The regulation imposes substantial compliance obligations on FDI enterprises, particularly those operating in technology, retail, or multinational corporate structures utilizing centralized cloud-based HR and customer data systems.
The primary compliance risks revolve around two core activities that enterprises often conduct habitually but which may constitute serious legal violations under Vietnamese law.
Basic personnel and customer information – including medical data, financial information, salary details, and location data – may be classified as sensitive personal data. Processing such information requires enhanced security measures and far stricter consent procedures compared to ordinary data.
In addition, storing Vietnamese employee data on overseas servers or allowing parent companies and foreign third parties to access internal Vietnamese data systems constitutes cross-border data transfer activity.
To lawfully conduct these activities, enterprises are required to complete and submit dossiers assessing the impact of personal data processing and cross-border data transfers to the Department of Cybersecurity and High-Tech Crime Prevention (A05 – Ministry of Public Security) within the prescribed statutory timeline. Failure to establish these compliance systems may expose enterprises not only to administrative penalties and potential suspension of data processing activities, but also to serious reputational damage at the global corporate level during cybersecurity inspections.
Strategic Guidance from Siglaw Experts
Amid the strong investment facilitation efforts of the Da Nang City government, establishing a proactive legal risk management strategy has become the decisive factor in protecting investment capital and transforming opportunities into sustainable business success. During the discussion session at Pre-DAVAS 2026, Dr. Lawyer Le Thi Dung proposed a fundamental solution aimed at reshaping the legal mindset of foreign investors: shifting from a reactive to a proactive approach by establishing a legal risk management system from the pre-investment stage onward.
This practical governance tool acts as a strategic roadmap, analyzing and dissecting the project’s legal structure into core management pillars. It clearly allocates responsibilities to relevant departments or specialists, preventing overlaps and procedural omissions. It also identifies precise timelines for completing post-licensing approvals (such as fire safety, environmental permits, and sub-licenses) and renewal cycles, thereby minimizing penalties for delays while enhancing transparency in dealings with governmental authorities, optimizing implementation schedules, and controlling unforeseen operational costs.
As Da Nang continues to roll out the red carpet for FDI inflows through transparency, sincerity, and decisive leadership, proactive legal risk management serves as the strongest safeguard for enterprises. Under the leadership of Dr. Lawyer Le Thi Dung, Siglaw Law Firm proudly goes beyond the traditional role of legal consultancy, positioning itself as a strategic partner accompanying the city’s leadership in building a safe and sustainable investment environment while guiding international corporations toward long-term success in Vietnam through practical legal expertise.
Siglaw Firm sincerely extends its gratitude to the Organizing Committee of Pre-DAVAS 2026 Da Nang, the city leaders, partners, and investors for creating such a valuable and meaningful platform for dialogue and cooperation.
