Vietnam’s economy in 2026 is a powerhouse. We’ve seen the landscape shift from a manufacturing-heavy hub to a diversified tech and renewable energy frontier. For foreign investors, the opportunities are massive, but as the saying goes, "the devil is in the details."
When you’re looking at an M&A deal or a major partnership, company due diligence in Vietnam is your primary shield. Yet, many investors: even the seasoned ones: still fall into the same traps. The regulatory environment has tightened this year, and what worked in 2023 or 2024 might get you penalized today.
At BLaw Vietnam, we’ve seen deals fall apart because of overlooked paperwork or "hidden" family ties. To help you navigate your next move, here are the seven most common mistakes we see in the Vietnamese market and, more importantly, how you can fix them.
1. Falling for the "Surface Level" Ownership Structure
In many Western markets, the person listed on the registration document is the person in charge. In Vietnam, it’s rarely that simple. Many local private enterprises are family-owned or held through complex nominee arrangements.
The Mistake: Relying solely on the Enterprise Registration Certificate (ERC). You might see a name on the paper, but the actual decision-making power: the beneficial ownership: could be held by a silent partner or a patriarch of a family who isn't even listed.
The Fix: You need to look beyond the certificate. Conduct deep-dive background checks on shareholders and their affiliations. In 2026, transparency laws have improved, but "informal" control is still a reality. Engage local experts to uncover these hidden interests before you sign the M&A Vietnam legal advice agreement.
2. Misunderstanding Land-Use Rights (LURs)
Real estate is often the most valuable asset in a deal, but in Vietnam, you don't "own" land in the traditional sense. You hold Land-Use Rights (LURs).
The Mistake: Assuming that because a company uses a factory or an office building, they have the perpetual right to it. Investors often fail to check the expiration dates of these rights or whether the land purpose (agricultural vs. industrial) matches the current business activity.
The Fix: Review the "Red Book" (LUR certificate) with a magnifying glass. Check the payment status of land rent: did the target company pay a lump sum or annual installments? This significantly impacts the value and your ability to mortgage the land. If you're looking at property-heavy deals, check our licensing services for deeper insights.
3. Ignoring Sector-Specific "Red Tape"
Vietnam’s regulatory environment is highly fragmented. While general business laws apply to everyone, industries like telecommunications, energy, banking, and logistics have their own sets of "sub-licenses."
The Mistake: Assuming a general business license covers everything. For instance, in 2026, renewable energy projects require specific approvals from the Ministry of Industry and Trade (MOIT) that are notoriously difficult to transfer during an acquisition.
The Fix: Create a regulatory map for the specific industry. Verify that every single permit: from environmental impact assessments to fire safety certificates: is current and in the company’s name. If you are starting from scratch, you might want to look at how to start your FDI business in Vietnam correctly from day one.
4. Overlooking the "Three Ledger" Accounting System
It is an open secret in Vietnam that some private businesses maintain multiple sets of books: one for the tax authorities, one for the bank, and one for the actual owners.
The Mistake: Accepting unaudited financial statements at face value. This can obscure massive hidden liabilities, unpaid taxes, or inflated revenue figures.
The Fix: Demand a full financial audit by a reputable firm that understands the local nuances of VAT, corporate income tax, and transfer pricing. With the 2026 updates to tax compliance, the authorities are much better at spotting discrepancies. Don't get caught holding the bill for the previous owner's "creative" accounting. Check out our tax services to see how we help bridge this gap.
5. Neglecting the New 2026 Labor Compliance Standards
Labor laws in Vietnam favor the employee, and the 2026 updates have only strengthened these protections.
The Mistake: Thinking that a signed employment contract is the end of the story. Many companies under-report salaries to save on social insurance contributions. If you acquire a company with a history of underpaying social insurance, you are inheriting a massive financial and legal time bomb.
The Fix: Audit the payroll against the social insurance receipts. Ensure the target company has a registered "Internal Labor Regulation" (ILR) and that all foreign workers have valid work permits. If there are labor disputes in the pipeline, you need to know now. Visit our labor law section for more details on compliance.
6. Underestimating Intellectual Property (IP) Vulnerability
In a manufacturing or tech-heavy deal, the IP is the crown jewel. However, IP enforcement in Vietnam is still a work in progress.
The Mistake: Failing to verify that trademarks, patents, and copyrights are actually registered in the company's name in Vietnam, rather than in the name of a founder or a third party.
The Fix: Conduct a thorough IP audit. Ensure that all "Work for Hire" clauses are in employment contracts so the company actually owns the code or designs produced by its staff. If you need to register new assets, our copyright and IP services can streamline the process.
7. The "Deal Fever" Rush
The biggest mistake isn't a technical one; it’s a psychological one. Investors get excited about the "Vietnam growth story" and want to close the deal before a competitor does.
The Mistake: Rushing the due diligence process. When you move too fast, you miss the subtle signs of related-party dependencies (e.g., the target company only survives because it buys materials at a discount from the CEO’s brother).
The Fix: Give the due diligence process the time it deserves. At BLaw Vietnam, we recommend a minimum of 4 to 8 weeks for a comprehensive review, depending on the company size. It’s better to lose a deal than to win a lawsuit later.
How to Move Forward
Conducting company due diligence in Vietnam is not just about checking boxes; it’s about understanding the local business culture and the specific regulatory hurdles of 2026. Whether you are looking at an M&A or just want to ensure your local subsidiary is compliant, professional guidance is non-negotiable.
Through the above points, it’s clear that the landscape is rewarding but complex. You need a partner who can provide not just legal advice, but a strategic roadmap.
Are you ready to secure your investment in Vietnam?
At BLaw Vietnam, we specialize in demystifying the local legal system for foreign investors. From corporate governance to M&A advisory, our team of highly qualified experts is here to ensure your business is built on a solid foundation.
Contact us today for a consultation, or browse our Legal Blog for more insights on navigating the Vietnamese market. Let’s make sure your next deal is a success, not a lesson.