Dear Clients and Partners,

As we approach the critical mid-point of 2026, the Vietnamese regulatory landscape is undergoing a profound transformation. For businesses operating within this dynamic market: particularly foreign-invested enterprises (FIEs): the 2026 audit season is not merely a routine check; it is a rigorous test of your corporate governance and transparency frameworks.

With the full implementation of the Vietnam Corporate Governance Code 2026 and the latest amendments to the Law on Enterprises, the stakes for compliance have never been higher. At BLaw Vietnam, we are thrilled to guide you through these complexities, ensuring your business is not just compliant, but optimized for long-term growth. This comprehensive guide will outline the essential shifts in the 2026 framework and provide actionable strategies for a seamless audit season.

The Paradigm Shift: Vietnam’s 2026 Legal Framework

The 2026 audit season is the first full cycle under the "monitoring model" established by the 2026 Investment Law. Vietnam has shifted away from traditional pre-approval gatekeeping toward a more robust, post-licensing compliance environment. This means that while entering the market may be faster, staying in the market requires a "clockwork" internal system that can withstand intense regulatory scrutiny.

1. The 'Comply or Explain' Rule

Central to the Vietnam Corporate Governance Code 2026 is the "Comply or Explain" principle. Aligned with G20/OECD standards, this rule requires public and listed companies: and increasingly serves as a benchmark for large FIEs: to either follow high-level governance recommendations or provide a transparent, expert-backed explanation for why they have not.

Key requirements under this rule include:

• Board Independence: Ensuring that at least one-third of your Board of Directors consists of independent members.
• Separation of Roles: Maintaining a clear distinction between the Chairman of the Board and the CEO to prevent a concentration of power.
• Audit Committees: Establishing a functional, independent committee to oversee financial reporting and internal controls.

2. Mandatory Beneficial Ownership Disclosure

One of the most significant changes in the 2026 legal framework is the mandatory identification and disclosure of Beneficial Owners (UBO). Under the updated Enterprise Law, companies must peel back layers of complex shareholding structures to identify the natural persons who ultimately control the entity. Failure to accurately disclose UBO information can lead to significant delays in license renewals and potential financial penalties.

Preparing for the 2026 Audit Season: A Strategic Checklist

To ensure your business is prepared for the upcoming audit and Annual General Meeting (AGM) season, your management team should focus on these five critical areas:

Step 1: Conduct a Governance Audit

Before the external auditors arrive, perform an internal review of your board structure and company charters. Do they align with the latest Decree No. 245/2025/ND-CP? At BLaw Vietnam, our Corporate Governance services include a comprehensive gap analysis to identify potential red flags before they become liabilities.

Step 2: Refine Your Risk Management Framework

The 2026 framework emphasizes emerging risks that were previously considered secondary. Your risk register must now explicitly address:

• Climate and ESG Risks: Investors and regulators now demand clarity on environmental impact and social responsibility.
• Cybersecurity and AI: With the digitalization of reporting, data protection has become a core pillar of legal compliance.
• Tax Optimization Transparency: Ensure that your tax settlements and transfer pricing strategies are documented and defensible under the new Global Minimum Tax rules.

Step 3: Implement Digital Governance Integration

The Vietnamese government has mandated that company filings, board resolutions, and governance reports be logged through a centralized national digital portal. Ensuring your internal documentation is digitized and easily accessible is no longer an option: it is a requirement for operational efficiency.

Step 4: Validate Related-Party Transactions

Auditors in 2026 are placing extreme focus on transactions between related parties. You must provide a clear "paper trail" that proves these transactions were conducted at arm’s length. This is particularly vital for FIEs that engage in cross-border intra-group lending or service agreements.

Step 5: Update Shareholder Engagement Protocols

With the rise of hybrid AGMs and e-voting, your corporate secretary must ensure that all shareholders: regardless of location: have the tools to participate effectively. This enhances your reputation and reduces the risk of shareholder disputes.

Beyond Compliance: The Value of "Clockwork" Systems

At BLaw Vietnam, we believe that corporate governance should not be a burden. When implemented correctly, it becomes a "Clockwork" system: a self-sustaining mechanism that protects your assets and enhances your market value.

Through our years of experience, we have seen that well-governed firms enjoy:

• Lower Cost of Debt: Banks and lenders view transparent companies as lower-risk investments.
• Enhanced Reputation: In a crowded market, a "flawless" compliance record is a powerful competitive advantage.
• Resilience: Strong internal controls allow your business to navigate economic volatility with confidence.

Whether you are navigating an M&A transaction or managing daily operations, having a robust governance framework is the foundation of your success.

Avoiding Common Pitfalls in 2026

Through the above article, it is clear that the 2026 audit season is more rigorous than ever. However, many businesses still fall into common traps:

1. Boilerplate Explanations: Using generic text in your "Comply or Explain" reports will likely trigger a deeper investigation by the State Securities Commission (SSC).
2. Ignoring ESG: Sustainability is now a core pillar of governance. Failing to disclose your ESG metrics can alienate international investors.
3. Lack of Evidence: Regulators are looking for the reality of governance, not just the policy. Ensure you have minutes, charters, and internal audit reports ready for review.

How BLaw Vietnam Can Support Your Business

Navigating the Vietnam legal framework in 2026 requires more than just a lawyer; it requires a strategic partner who understands the intersection of law, finance, and corporate strategy. Our team of highly qualified attorneys and tax settlement experts is dedicated to streamlining your compliance processes.

From conducting governance audits to drafting expert-backed "explain" statements, we offer top-notch legal services tailored to your specific industry and scale. We invite you to explore our legal blog for more insights or read our ultimate guide to 2026 board requirements to stay ahead of the curve.

Contact Us Today

Are you ready to transform your corporate governance into a competitive asset? Don’t wait for the audit season to begin. Reach out to BLaw Vietnam today for a consultation. Let us help you build a "Clockwork" system that secures your business's future in Vietnam.

BLaw Vietnam – Excellence in Legal Services.
Visit us at: blawvn.com