Legal Audit: The Strategic Foundation for Risk Control and Sustainable Growth of FDI Enterprises in Vietnam

1. A Common Reality: Many FDI Enterprises in Vietnam Operate with Hidden Legal Gaps

Despite having substantial capital, experienced management, or strong support from parent companies abroad, many foreign-invested enterprises (FDIs) in Vietnam begin to reveal critical internal issues after just 1 – 3 years of operation.

The signs often appear during a surprise inspection, a delayed work permit renewal, or a contract dispute that could have been avoided. These legal issues – initially unseen – can damage business operations, brand credibility, and even result in losing control over the Vietnamese subsidiary.

2. Common Legal Risks for Foreign-Invested Enterprises in Vietnam

Through years of legal audits and legal support for FDI clients, Tran & Co. has identified key risk areas:

• Licensing & conditional business requirements not properly updated or maintained – especially in manufacturing, distribution, pharmaceuticals, cosmetics, and specialized technical services.

• Labor contracts and internal HR policies that do not comply with Vietnamese labor law – especially in cases involving foreign staff or global compensation structures.

• Failure to meet statutory reporting requirements – such as investment reports, audited financials, or FDI compliance submissions.

• Poor coordination between parent company and local subsidiary – leading to inconsistent or invalid internal approvals.

• Contractual blind spots – such as unenforceable dispute resolution clauses or failure to properly delegate legal signing authority.

3. Legal Audit Is Not a Cost – It’s a Risk Prevention Lever and Growth Catalyst

Unlike financial audits, which are reactive and compliance-driven, legal audits serve as a proactive tool to assess the company’s legal health, internal control systems, and risk exposure.

When performed correctly, a legal audit offers significant advantages:

• Early detection of legal risks before they escalate into penalties or disputes.

• Validation of contracts, HR policies, and compliance reports under current law.

• Stronger credibility with stakeholders, investors, and the parent company.

• A solid foundation for IPO, M&A, capital raising, or strategic expansion.

4. Tran & Co. – Strategic Partner for Legal Audit and ESG-Aligned Compliance

Tran & Co. offers a specialized legal audit system designed for FDI enterprises in Vietnam, including:

• Legal Health check – overall review of the company’s legal structure and compliance status;

• Governance Audit – deep dive into internal governance, charters, and decision-making framework;

• Contract Risk Scan – review of key commercial agreements and risk exposure;

• ESG Compliance Framework – tailored legal systems aligned with sustainable development standards.

More than just legal consultants, we act as strategic legal partners – building tailored risk control systems that match your business model, industry standards, and long-term development goals.

5. Managing Partner’s Perspective – Hana Tran

“Many foreign investors believe that setting up the legal entity is the most important milestone. But in reality, maintaining compliance and operational integrity throughout the company’s lifecycle is what truly determines long-term success in Vietnam. As a lawyer working closely with foreign businesses, I’ve found that a legal audit should be viewed as a regular ‘health check’ – identifying vulnerabilities, resolving root causes, and strengthening the enterprise from within.”

6. Let Tran & Co. Help You Build a Resilient Legal Foundation Today

Your business might be:

• Planning to expand or restructure

• Preparing for investment, M&A, or share transfers

• Or simply aiming to prevent costly legal surprises before they happen

Let’s talk.

Tran & Co. – Strategic Legal Partner for FDI Enterprises in Vietnam