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Defusing the “ticking time bomb” of contingent liabilities in M&A transactions: A practical legal guide for 2026

Against the backdrop of Vietnam’s mergers and acquisitions (M&A) market in 2026, which is shifting toward substantive development and rigorous screening, the due diligence of a target company has evolved far beyond superficial financial analysis. A target company may boast impressive revenue metrics, a loyal customer base, or market leadership, yet all of this value can be instantly wiped out by invisible financial “black holes”. These are contingent liabilities—financial or legal obligations that have not officially crystallized at the time of transfer but remain latent, poised to be triggered by future uncertain events.   For the Buyer, failing to identify and establish effective legal safeguards in the Share Purchase Agreement (SPA) or Capital Transfer Agreement means inadvertently inheriting these “ticking time bombs”. Consequently, identifying, assessing, and structuring mechanisms to address contingent liabilities is recognized as one of the most critical aspects of legal du...
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Vietnam’s investment policy in 2026: Tightening controls or opening further?

Vietnam’s investment policy entered a significant new phase in 2026 with the official entry into force of the Law on Investment 2025 (Law No. 143/2025/QH15) on 1 March 2026. Replacing the previous legal framework, the new law is expected to unlock economic resources, enhance the investment environment, and strengthen Vietnam’s competitiveness in attracting both domestic and foreign investment.   Against the backdrop of increasing global economic uncertainty, foreign investors and local businesses alike are seeking a clear answer to an important question:  Is Vietnam’s investment policy moving toward tighter regulatory control to mitigate risks, or toward greater openness to capture growth opportunities?  The answer is not merely of academic interest. It has direct implications for market entry strategies, investment structuring, business expansion plans, and long-term compliance obligations.   This article examines the key changes introduced under the new investment framework and ana...
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Small and medium-sized FDI enterprises exempted from corporate income tax for the first 03 years of establishment

In an effort to improve the investment environment and support start-up enterprises, competent State agencies continuously promulgate and update tax incentive policies. Most recently, on June 11 th  , 2026, the Tax Department issued Official Letter No. 3896/CT-CS to provide detailed guidance on corporate income tax (“ CIT ”) policies under Decree No. 20/2026/ND-CP . This Official Letter has opened up an opportunity to access an extremely important incentive: A 03-year CIT exemption for small and medium-sized foreign direct investment (“ FDI ”) enterprises.   Foreign investors and economic organizations must clearly understand the legal bases, from foundational definitions to exceptional cases, to apply them correctly and maximize this opportunity.   1. Legal basis for determining small and medium-sized enterprises:   Regarding the definition, pursuant to Article 4.10 of the Law on Enterprises 2020 : “An enterprise means an organization with a proper name, assets, a transaction offic...
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Employment Services No Longer a Conditional Business Line from July 1, 2026

The promulgation of the Law on Investment 2025 marks a significant turning point in the legal framework for investment management, notably removing the employment service business from the list of conditional business lines. Although this provision helps enterprises optimize capital and reduce administrative procedures, investors must pay special attention to its effective date.    Therefore, clarifying the legal bases and applicable regulations during the transition period will serve as an essential foundation to help enterprises proactively plan an appropriate legal compliance roadmap.   1. Legal basis for abolishing conditions for employment service business:   Regarding the legal basis, previous laws established a strict control mechanism over labor supply activities through mandatory requirements for operating licenses and escrow deposits. However, driven by the orientation of administrative procedure reform, these barriers have been removed to create a transparent and open bu...
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