Dear Clients and Partners,

The landscape of doing business in Vietnam has undergone a tectonic shift as we move through 2026. For years, corporate governance was often viewed by many enterprises: particularly foreign-invested legal entities: as a secondary administrative task, overshadowed by the immediate pressures of market entry and operational growth. However, the regulatory environment has matured. Today, robust corporate governance is no longer just a "best practice"; it is a fundamental requirement for legal resilience and sustainable profitability.

With Vietnam’s recent removal from international "grey lists" and the full implementation of the 2026 Corporate Governance Code, the rules of the game have changed. This guide is designed to help you navigate these complexities, ensuring your business remains compliant, transparent, and attractive to global investors.

1. The 2026 Paradigm Shift: From Gatekeeping to Monitoring

Historically, the Vietnamese government acted as a "gatekeeper," requiring extensive pre-approvals before a business could even begin operations. The 2026 Investment Law has fundamentally reversed this approach. We have transitioned into a "monitoring model."

While it is now significantly faster to obtain your Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC): with streamlined processes for sectors like green energy and digital infrastructure: this efficiency comes with a trade-off. In exchange for easier market entry, the government has intensified post-licensing audits and internal compliance requirements.

For your business, this means that "paper compliance" is dead. Authorities are no longer just looking at your initial filings; they are monitoring your operational reality through a centralized national digital portal. If your internal governance structures: such as board resolutions, appointment letters, and meeting minutes: are not maintained with "clockwork" precision, you risk swift administrative fines and potential "claw-back" of tax incentives.

2. Mastering the "Comply or Explain" Rule

One of the most significant introductions in the Viet Nam Corporate Governance Code 2026 is the "Comply or Explain" principle. While primarily targeted at public and listed companies, its influence is trickling down to private enterprises and large foreign-invested firms looking to maintain high standards for future M&A advice or financing.

What does "Comply or Explain" mean for you?

The framework provides a set of best-practice standards (such as board diversity and independent audit committees). Your business has two choices:

1. Comply: Fully implement the recommended governance structures.
2. Explain: If you choose not to follow a specific recommendation due to the scale of your business or industry-specific challenges, you must provide a transparent, substantive explanation in your annual reports.

At BLaw Vietnam, we assist our clients in conducting comprehensive governance audits to determine which path is most cost-effective while still building trust with the State Securities Commission (SSC) and international stakeholders.

3. Beneficial Ownership: Peering Through the Corporate Veil

In 2026, anonymity is a relic of the past. To align with international anti-money laundering (AML) standards, Vietnam has mandated strict Beneficial Owner (BO) disclosures.

The core requirement is the "Look-Through" principle. You can no longer simply list a holding company or a trust as the owner of your Vietnamese subsidiary. You must identify the natural person who ultimately controls the entity.

Key Considerations for BO Disclosure:

• The 5% Threshold and Beyond: While holding 5% or more of shares is a trigger, control is the ultimate metric. An individual with the power to appoint the majority of the Board or veto major decisions is a Beneficial Owner, regardless of their share percentage.
• The 30-Day Update Window: Disclosure is not a "one and done" task. Any significant change in ownership must be reported to the authorities within 30 days. Failure to do so can stall M&A transactions and trigger audits.
• Nominee Arrangements: Using "nominee" shareholders to simplify registration is now a high-risk strategy. Transparency regarding the true investor is mandatory.

4. ESG Integration: The Board's New Responsibility

The 2026 regulatory framework has officially elevated Environmental, Social, and Governance (ESG) issues from a marketing buzzword to a boardroom duty. The Board of Directors is now legally positioned as the central authority for overseeing material risks, including climate change and sustainable development.

Under the new Code, boards are expected to:

• Integrate ESG into the core business strategy.
• Assign ESG oversight to a specific board member or a dedicated Sustainability Committee.
• Ensure the accuracy of bilingual (Vietnamese and English) sustainability disclosures.

By optimizing your governance to include ESG, you don't just stay compliant; you unlock access to "green" financing and lower your cost of debt. Investors in 2026 are looking for well-governed firms that can prove their long-term resilience.

5. Digital Governance and the National Portal

Efficiency is the hallmark of the 2026 system. The government now mandates that company filings, board resolutions, and governance reports be logged through a centralized national digital portal.

This digital shift requires your internal legal and HR teams to be more synchronized than ever. For instance, updates to your Employment Law compliance or changes in your legal representative must be reflected digitally almost in real-time. This is where BLaw Vietnam’s "Clockwork" system excels: we help you automate these tracking processes so you never miss a deadline.

6. Actionable Advice: Building Your "Clockwork" Governance System

To help your business master the 2026 framework, we recommend the following strategic steps:

1. Conduct a Governance Audit: Review your current charter and internal regulations against the 2026 Corporate Governance Code. Are your "reserved matters" protecting your minority investors adequately?
2. Verify Beneficial Ownership Data: Ensure your organogram maps every shareholder back to a natural person with valid, legalized documentation.
3. Update Internal Regulations: Your Internal Regulations on Corporate Governance (IRCG) should clearly define the roles of the Board of Directors, the Audit Committee, and the Legal Representative.
4. Implement a Trigger-Event Checklist: Create a system that alerts your compliance officer the moment a shareholder sells a stake or a new control agreement is signed, ensuring you meet the 30-day reporting window.

Conclusion: Partnering for Excellence

Navigating Vietnam’s 2026 regulatory framework can be complex, but it also presents a significant opportunity. Businesses that embrace transparency and structured governance today will be the market leaders of tomorrow. At BLaw Vietnam, we pride ourselves on being more than just lawyers; we are your strategic partners in building a "Clockwork" legal system that protects your assets and accelerates your growth.

Whether you need assistance with Tax Settlements, Employment and Labor Law, or specialized Corporate Governance counsel, our knowledgeable attorneys are here to provide top-notch service tailored to your specific industry.

Are you ready to optimize your corporate governance for 2026?

Explore our services or contact us today for a consultation. For more insights on the latest legal trends, visit our Legal Blog or check our FAQ page.

Through the proactive management of your corporate structure, you ensure that your business in Vietnam is not just surviving, but thriving.

Sincerely,

The BLaw Vietnam Team
Your Excellence-Driven Legal Partners