Dear Clients and Partners,

As we move into the second half of 2026, the regulatory landscape for businesses in Vietnam has reached a pivotal turning point. For many years, corporate governance was often viewed as a "paper exercise": a set of documents to be filed and forgotten. However, under the weight of the 2026 Investment Law and the newly launched Vietnam Corporate Governance Code 2026, the era of passive compliance is over.

Today, your board of directors must transition from a gatekeeping model to a robust, operational monitoring model. With the government’s increased focus on transparency, digital accountability, and beneficial ownership, failing to professionalize your governance system can lead to severe administrative fines, stalled M&A transactions, and personal liability for legal representatives.

In this guide, we will break down the essential updates your board needs to master to maintain a "Clockwork" governance system in 2026.

1. The "Comply or Explain" Era: The 2026 Corporate Governance Code

The State Securities Commission (SSC) has officially introduced the Vietnam Corporate Governance Code 2026. While this code is primarily aimed at public and listed companies, its principles are rapidly becoming the "gold standard" for large private enterprises and foreign-invested legal entities (FIEs) looking to attract international capital.

The most significant shift is the adoption of the "Comply or Explain" principle.

What this means for your Board:

Your company now has two choices:

Comply: Implement specific best practices, such as ensuring at least one-third of your board consists of independent directors.
Explain: If you choose not to comply, you must provide a transparent, detailed explanation in your annual reporting as to why and what alternative measures are in place.

By adopting these standards, you not only ensure legal compliance but also lower your cost of debt and enhance your reputation in the market. For more on structuring your annual requirements, see our guide on how to master your 2026 AGM.

2. Beneficial Ownership: The End of the "Nominee" Era

Transparency is the hallmark of 2026. Under Decree 168/2025/ND-CP, which is now in full effect, every enterprise in Vietnam must identify and report its Ultimate Beneficial Owners (UBO).

The 25% Rule and Beyond

A "Beneficial Owner" is no longer just the entity listed on your Business Registration Certificate. It is any natural person who:

Directly or indirectly owns 25% or more of the charter capital.
Exercises ultimate control over the company (e.g., the power to appoint the CEO or veto board resolutions), regardless of their shareholding percentage.

Critical Deadline: Any change in beneficial ownership must be reported to the authorities within 10 days. Failure to do so can result in fines and, more importantly, can flag your company for high-risk audits. To avoid common errors, read our deep dive on 7 mistakes you’re making with beneficial owner declarations.

3. Mandatory Digital Governance: The January 1, 2026 Deadline

Efficiency and digitalization are at the core of BLaw Vietnam’s "Clockwork" philosophy. As of January 1, 2026, the National Business Registration System has mandated that personal digital signatures must be used for all online filings.

Why this matters:

Previously, companies could use a verified business account for filings. Now, the legal representative or authorized person must use their own digital signature. This change:

Ensures individual accountability.
Reduces the risk of fraudulent filings.
Requires boards to implement clear Delegation of Authority (DoA) policies to ensure digital tokens are handled securely.

If your internal systems are still manual, this is the time to streamline. Our Corporate Governance services can help you design a digital workflow that meets these 2026 standards without disrupting your daily operations.

4. The 2026 Investment Law: From Gatekeeping to Monitoring

The 2026 Investment Law (effective March 1, 2026) has simplified the market entry process for many sectors, but it comes with a catch: Post-Licensing Audits.

The government is no longer focusing solely on what you promise during the application phase; they are monitoring what you actually do once operational. This includes:

ESG Due Diligence: Environmental, Social, and Governance (ESG) standards are now tied to specific incentives. If you claim green incentives, your governance must reflect active ESG oversight.
Claw-back Provisions: If your governance fails to meet the conditions of your investment certificate, the government now has swifter powers to "claw back" tax incentives.

Navigating this transition requires a proactive board. You can learn more about avoiding the pitfalls of the new policy in our article on the 2026 investment policy approval process.

5. Integrating ESG into Your Governance DNA

In 2026, ESG is no longer a buzzword; it is a legal and financial necessity. The Vietnam Corporate Governance Code 2026 explicitly incorporates ESG considerations into board responsibilities.

For boards involved in M&A, governance oversight of ESG has become a deal-breaker. Investors are looking for companies that have:

Clear internal policies on environmental impact.
Labor compliance systems that go beyond the minimum legal requirements.
Transparent reporting on board diversity and executive compensation.

Through the above article, it is clear that ESG is now a fundamental pillar of corporate value. For a deeper look at how this impacts your next transaction, see why ESG due diligence matters for M&A in 2026.

Actionable Checklist for Your Board in 2026

To ensure your business operates like clockwork, we recommend the following immediate actions:

Conduct a Governance Audit: Review your current board charter against the 2026 Corporate Governance Code.
Verify Beneficial Ownership: Trace your ownership chain to natural persons and ensure your records match the National Database.
Digitalize Signatures: Ensure all legal representatives have updated, personal digital signatures for 2026 filings.
Review Delegation of Authority: Update internal resolutions to clearly state the effective dates of corporate changes, as now permitted by Decree 168.
Audit Your ESG Oversight: Ensure the board has a formal mechanism for reviewing environmental and social risks.

How BLaw Vietnam Can Support Your Board

At BLaw Vietnam, we believe that legal compliance should be a competitive advantage, not a hurdle. Our team of highly qualified attorneys specializes in building "Clockwork" legal systems that protect your business while you focus on growth.

Whether you are navigating the complexities of the Tax Settlement landscape or restructuring your board for M&A readiness, we are here to provide practical, innovative, and expert counsel.

Is your board ready for the 2026 transition? Contact us today at info@blawvietnam.vn or call (0084) 943 411 115 for a comprehensive governance health check.