Dear Clients and Partners,
As we navigate the mid-point of 2026, the Vietnamese capital market has reached a new level of sophistication. For many enterprises, private placements remain the most efficient vehicle to raise capital without the exhaustive requirements of a public offering. However, with the implementation of the recent amendments to the Securities Law, the regulatory "safety net" has narrowed significantly.
In the current landscape, what used to be a standard administrative oversight can now lead to severe administrative penalties, the suspension of offerings, or even criminal liability for corporate officers. At BLaw Vietnam, we have observed a recurring pattern of pitfalls that even seasoned issuers fall into. Whether you are looking to issue private bonds or equity, understanding these common mistakes is essential to safeguard your business's reputation and financial stability.
1. Misjudging the "Professional Securities Investor" (PSI) Status
The Amended Securities Law has introduced much stricter criteria for who qualifies as a Professional Securities Investor. A frequent mistake businesses make is relying on outdated certifications or failing to verify the "active" status of an investor’s portfolio.
Under the current framework, simply holding a high-value trading account is no longer sufficient. The law now requires a more rigorous verification of the investor’s financial standing and experience. If you sell to an investor who is subsequently deemed non-professional by the State Securities Commission (SSC), the entire placement could be declared void.
The Mistake: Failing to implement a robust KYC (Know Your Customer) and portfolio verification process at the time of subscription.
The Consequence: You may be forced to repurchase the issued securities and pay substantial fines.
To gain a deeper understanding of how these specific requirements have shifted, we invite you to review our detailed analysis on why Vietnam’s new PSI rules will change the way you invest in private bonds.
2. Over-Reliance on Generic Private Placement Memorandum (PPM) Templates
One of the most dangerous errors in the 2026 regulatory environment is the "copy-paste" approach to the Private Placement Memorandum. Many companies attempt to save on legal costs by using templates from previous years or foreign jurisdictions without adapting them to the specificities of the amended Vietnamese law.
A PPM is not just a marketing brochure; it is a legal shield. Research into global securities trends highlights that the most serious mistakes involve material misstatements or omissions. In Vietnam, the SSC has increased its scrutiny of the "Risk Factors" section. If your PPM fails to disclose specific operational risks: such as land-use right complexities or pending litigation: investors have a legal basis to claim fraud if the investment underperforms.
Common PPM Failures Include:
- Inadequate Risk Disclosure: Failing to list industry-specific risks or regulatory changes.
- Overly Optimistic Projections: Providing financial forecasts that lack a logical basis or fail to include sensitivity analysis.
- Missing Documentation: Neglecting to attach mandatory exhibits such as audited financial statements or legal opinions on the validity of the issuance.
By treating the PPM as a mere formality, you expose your board of directors to personal liability. You can find more insights on compliance best practices in our legal blog.
3. Violating the "Transfer Restriction" Rules
Private placements are designed for a limited group of investors, and as such, the law imposes strict lock-up periods. A common mistake among issuers is failing to communicate these restrictions clearly to the investors, or worse, facilitating secondary market trades before the legal timeframe has expired.
Typically, shares or bonds issued via private placement are restricted from transfer for at least one year for professional investors (and often longer for strategic investors). Some issuers mistakenly believe that "internal transfers" between affiliates of an investor are exempt. They are not. Any change in ownership must comply with the lock-up period and be reported to the Vietnam Securities Depository and Clearing Corporation (VSDC).
4. Failure to Synchronize with Corporate Governance Codes
In 2026, securities compliance is no longer an isolated task for the finance department; it is a core function of the Board of Directors. The Amended Securities Law works in tandem with the updated Corporate Governance Code.
Many businesses make the mistake of approving a private placement through a Board resolution that doesn't meet the new transparency standards. For instance, if the purpose of the capital raise is not clearly defined or if there is a conflict of interest that hasn't been disclosed, the issuance can be challenged by minority shareholders.
We highly recommend that your board reviews the ultimate guide to the 2026 Corporate Governance Code to ensure your internal approvals are as bulletproof as your external filings.
5. Utilizing Unlicensed "Finders" or Intermediaries
In an effort to close a funding round quickly, some businesses employ "finders" or consultants to identify investors. While this seems efficient, using an intermediary that is not a licensed securities brokerage is a direct violation of Vietnamese law.
The Amended Securities Law explicitly states that only licensed entities can provide securities brokerage or investment advisory services. If your "finder" is unlicensed:
- The SSC may refuse to acknowledge the placement.
- Your company could be investigated for aiding unauthorized securities activities.
- Any fees paid to such intermediaries might be considered illegal and non-deductible for tax purposes.
Pro-tip: Always verify the license of any advisor you work with through the SSC directory.
6. Neglecting Post-Issuance Reporting Obligations
The work does not end when the funds hit your bank account. A frequent mistake we see is the "relaxation" of compliance after a successful raise. The Amended Securities Law requires periodic reporting on the progress of capital utilization.
If your business promised to use the funds for a specific factory expansion but redirected the capital to pay off debt without a proper shareholder resolution and SSC notification, you are in breach of the law. Post-issuance transparency is a major focus for regulators in 2026, especially regarding ESG (Environmental, Social, and Governance) commitments made during the roadshow.
For businesses focusing on sustainability, ensure your post-issuance reports align with current ESG governance standards.
7. Inconsistent Financial Reporting and Auditing
The bridge between your accounting department and your legal compliance team is often where the most critical errors occur. Private placements require audited financial statements that meet specific standards. Discrepancies between the data provided in the PPM and the year-end audited reports filed with the tax authorities are a red flag for regulators.
Furthermore, failing to update the "Material Changes" section of your disclosure when a significant event occurs during the offering period: such as a change in key personnel or a major contract loss: is a form of omission that carries heavy penalties.
How BLaw Vietnam Can Streamline Your Capital Raise
Through the above analysis, it is clear that the margin for error in private placements has evaporated. However, these challenges are not insurmountable. With the right legal partner, you can optimize your issuance process and ensure that your business remains a "safe bet" for high-quality investors.
At BLaw Vietnam, our highly qualified team specializes in:
- Investor Verification: Rigorous PSI status checks to ensure compliance with the latest 2026 standards.
- Custom PPM Drafting: Moving beyond templates to create robust, defensive legal documentation tailored to your specific industry.
- Liaising with the SSC: Managing the notification and registration process to ensure a smooth, administrative-error-free experience.
- Ongoing Compliance Monitoring: Helping you manage post-issuance reporting and capital utilization tracking.
In addition to our core securities services, we offer comprehensive support for foreign investors looking to enter the Vietnamese market. If you are a foreign entity exploring these opportunities, you might find our guide on starting your FDI business in Vietnam with $1000 only to be an excellent starting point for understanding the local landscape.
Final Thoughts
The Amended Securities Law is not designed to stifle growth, but to ensure that the growth of Vietnam's capital market is sustainable and transparent. By avoiding these common mistakes, you position your business as a leader in corporate integrity.
If you are planning a private placement or are currently in the middle of an issuance and have concerns about your compliance status, do not wait for an audit to find out there is a problem. Our team at BLaw Vietnam is ready to provide the professional guidance you need to succeed.
Contact us today for a consultative session on your next capital raise.
We look forward to helping you optimize your business's financial future.
Sincerely,
The BLaw Vietnam Team
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