Arbitration vs Litigation in Vietnam: 5 Facts and Cultural Insights Every Business Should Know

  Delay drains profit.

Every extra day in a legal dispute means lost time, added cost, and growing frustration. In the world of business, time is not just money, it is reputation, relationship, and survival.

Many companies weigh arbitration vs litigation in Vietnam only after tensions rise. The dispute has already begun. The contract has already been breached. One party wants action, and the other is either silent or defensive. By then, it is often too late to choose wisely.

Most businesses are not prepared for what happens next. Litigation in Vietnam can be slow and public. Arbitration can be faster and more private, but only if planned correctly. Choosing the wrong path can destroy a business partnership. Even winning in court may come at the cost of future cooperation.

The good news is that businesses can avoid painful surprises. With legal strategy and a clear understanding of Vietnamese business culture, companies can plan ahead. They can structure their contracts in a way that protects both profits and relationships.

Arbitration vs Litigation in Vietnam: 5 Facts Every Business Should Know

In here, we will together discover five facts about arbitration vs litigation in Vietnam. These facts are simple, and practical. They are based on real numbers and real cultural experiences. Let’s begin by understanding why this choice matters so much.

Why Forum Choice Matters More Than You Think

Not every dispute becomes a disaster. But when one does, the way you handle it defines your outcome.

Vietnam is not a high-litigation culture. In fact, most Vietnamese companies prefer to avoid courts altogether. They see lawsuits as confrontational, reputation-damaging, and often unnecessary. Many business leaders value harmony and face over hardline tactics. That is why the dispute resolution clause in a contract, often ignored until trouble comes is so important.

Foreign companies often assume that litigation is the standard. They believe they can sue in their own country and expect a Vietnamese court to honor the judgment. This is rarely the case. Vietnam generally does not enforce foreign court rulings unless specific treaties apply. And even then, procedural hurdles remain.

It is then we think the comparison between arbitration vs litigation in Vietnam becomes critical. Arbitration, especially when structured properly in the contract, provides a more flexible and internationally enforceable path. And just as importantly, it often avoids the public confrontation that courts create.

Understanding this difference is not just a legal necessity. It is a commercial advantage.

What You Will Gain from Reading This

In here we will share with you practical knowledge to make better decisions. You will learn:

• How long court litigation usually takes in Vietnam
• How arbitration timelines compare
• How culture affects the way disputes unfold and are resolved
• Why privacy and control matter more than most businesses expect
• How to choose the right path before a dispute even begins

You will also receive a simple self-assessment checklist to help you decide which method best fits your business goals. These insights are not theory. They are based on common mistakes and overlooked details we see every day in the Vietnamese legal environment.

A Story of Two Business Disputes

Imagine two companies in dispute. One is a foreign supplier. The other is a Vietnamese distributor. They worked together for some time. Then, a large shipment was delayed. A payment was withheld. Trust broke down. Emails turned into silence.

In the first scenario, the foreign supplier sues in its home court. The case moves forward. The judgment comes in after a year. The Vietnamese party refuses to comply. The court judgment is sent to Vietnam for enforcement. After many months of procedure, the request is denied. Vietnam does not enforce that foreign court ruling. The supplier loses time, money, and trust.

In the second scenario, both parties had agreed in advance to arbitration in Vietnam. When the dispute arises, the claimant sends a notice to begin the process. Within a few months, a final award is issued. The Vietnamese court recognises the award. Payment is made. The parties renegotiate, and the business relationship continues.

The choice between arbitration vs litigation in Vietnam changed the outcome completely.

5 Eye-Opening Facts and Cultural Insights on Arbitration vs Litigation in Vietnam

Fact 1: Arbitration Is Often Faster

According to the World Bank’s “Doing Business” indicators, the average time for resolving a contract dispute in a Vietnamese court is around 400 days. This includes filing, judgment, and enforcement.

In contrast, the Vietnam International Arbitration Centre (VIAC) reports that most commercial arbitration cases are resolved within 150 days from the time the tribunal is formed. The rules limit the process to nine months, but many cases finish earlier.

That’s a 250-day difference. In business, that’s the difference between growth and loss.

Fact 2: Vietnamese Culture Values Privacy Over Public Process

In Vietnam, public lawsuits can damage reputations. Court hearings are open. Court files become public records. Companies worry about losing not just the case, but also credibility.

Arbitration, however, is conducted in private. Awards are not published. Proceedings are confidential unless both sides agree otherwise. This matters in a culture where “face” and relationship are core values. Vietnamese businesses often prefer quiet, negotiated solutions to loud public battles.

Fact 3: Arbitration Awards Are More Enforceable

Vietnam rarely enforces foreign court judgments. Without a bilateral agreement or a special legal basis, enforcement requests are often rejected.

Arbitral awards, however, are enforceable under the New York Convention, which Vietnam joined in 1995. Vietnamese courts regularly recognise foreign arbitral awards that meet the required conditions. This makes arbitration the preferred tool for international business protection.

When comparing arbitration vs litigation in Vietnam, enforcement is not a small detail. It is the endgame.

Fact 4: Arbitration Offers More Control

In court, you get a judge assigned to your case. The procedure is fixed. The language is Vietnamese. You must follow state-imposed rules.

In arbitration, parties can choose the arbitrator, the seat, the language, and even the timetable. This flexibility is especially helpful in cross-border disputes. You can pick someone who understands your industry. You can agree to use English. You can set deadlines that match your business cycle.

Vietnamese culture also values consensus. The ability to shape the process together reflects mutual respect, something local partners value more than you might expect.

Fact 5: Public Victory Can Mean Private Loss

Even when a company wins in court, it may lose long-term value. Public judgment can end a business relationship. Clients may worry. Partners may withdraw. Your victory becomes a warning sign to others.

Arbitration allows both parties to move forward without shame. A decision can be made, damages paid, and the parties can keep working. This is consistent with Vietnam’s strong preference for continuity and face-saving compromise.

When you compare arbitration vs litigation in Vietnam, think beyond legal fees. Think about your brand. Think about future contracts. Think about what your local partner tells others after the dispute ends.

5-Question Checklist for Smart Forum Selection

Before you sign your next contract, or respond to a dispute, ask these questions:

1. Will you need to enforce the result in Vietnam?
2. Would your business suffer from public attention or bad press?
3. How much would 12 months of legal delay cost your cash flow?
4. Do you want to keep working with the other party if the dispute ends well?
5. Would it help your business if you could choose the language, law, and decision-maker?

If you answered yes to three or more of these questions, arbitration is likely a better fit.

Do not leave it to chance. Have your dispute resolution clause reviewed. A poorly drafted clause can cause even more harm than no clause at all.

FAQs

Q: Can I use both arbitration and litigation at the same time?

A: No. You must choose one method in the contract. If both are mentioned, it may cause confusion and delay enforcement.

Q: Is arbitration always more expensive than court?

A: Not always. Court fees are lower, but court processes take longer and involve extra costs like translation, notarisation, and appeals. Arbitration has upfront fees, but fewer hidden costs.

Q: Can arbitration decisions be appealed in Vietnam?

A: No formal appeal exists. However, a party may request annulment on limited legal grounds. This process is rare and difficult.

Conclusion

Your choice between arbitration vs litigation in Vietnam affects more than just legal strategy. It impacts your timeline, your reputation, and your relationships.

The legal system in Vietnam offers both tools. But not every tool fits every job. Arbitration is not for everyone, and neither is court. What matters is that you choose before a problem begins, and that you do so with facts and cultural insight in mind.

Do not wait until you are already in a dispute. Review your contracts today. Make your next dispute clause a strategic advantage, not a legal gamble.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/disputes/arbitration-vs-litigation-in-vietnam.html

Exciting Strategic Wins from the Vietnam Personal Data Protection Law 2025 for Tech Leaders

  Fines are rising. Risks are growing. But with the right mindset, so is opportunity. A new legal framework is changing the way businesses must handle personal data.

This article breaks down the key takeaways, risk points, and action steps every business leader should know about the Vietnam Personal Data Protection Law.

Whether you operate locally or work with customers across borders, this law affects how you collect, use, and share information.

By the end of this guide, you would see how aligning with the law is not just about avoiding penalties, it is about complance in Vietnam for building trust and competitive strength.

Why Vietnam Personal Data Protection Law Is A Big Change

New rules often feel complex. But this one is simple at its core: respect personal data, or face the consequences.

The Vietnam Personal Data Protection Law sets strict standards for how businesses must handle the personal data of individuals. It applies broadly, including to companies based outside the country that process local user data. The consequences for violations are serious. Businesses can face fines of up to five percent of their previous year’s total revenue. If the violation involves trading personal data, the fine may reach ten times the financial gain from that transaction.

This means data protection is no longer just a technical issue or an IT department’s concern. It is a leadership responsibility. If your organization interacts with individuals in Vietnam, whether by providing services, collecting emails, or storing customer records, then this law also applies to you.

The good news is that the law also provides a structure for businesses to follow. Those that take the time to understand and act on it will not only reduce their risk, they will earn the trust of their customers and partners.

Vietnam Personal Data Protection Law

What You Gain From This Brief of Vietnam Personal Data Protection Law

This article gives business leaders a brief view of what the Vietnam Personal Data Protection Law means in practice, and how to respond. You’ll gain:

• A clear understanding of the law’s purpose and structure
• Practical strategies for reducing risk and avoiding costly mistakes
• Examples that make the law real, even without technical details
• Guidance for preparing for internal readiness across teams
• Key answers to questions many business leaders are asking right now

Whether you are managing legal, operations, or marketing, the lessons here will help you turn compliance into capability. And throughout, you would see how the Vietnam Personal Data Protection Law can support, not slow your growth.

From Risk to Readiness For Vietnam Personal Data Protection Law

A Wake-Up Call for Digital Sovereignty

Vietnam’s digital economy has grown at high speed, millions of users online, apps and platforms expanding, and personal data collected at scale. But as the digital world expanded, so did its shadows.

Scammers, often from outside the country, began using stolen data to target Vietnamese people. Fake job offers, financial traps, identity fraud, powered by leaked names, phone numbers, and national IDs. These were not just individual scams. They became a systemic threat to public trust.

That is when it became clear: Vietnam needed a shield.

The Vietnam Personal Data Protection Law was the wake-up call. Not just a legal document, but a national decision. A signal that Vietnam would no longer be a passive participant in the global data economy. That it would take back control, protecting its citizens, defining its rules, and claiming digital sovereignty.

This context matters. It helps businesses see that this law is not just a compliance issue. It’s a strategic pivot by the government, one that smart companies will align with, not resist.

An Example Stories of Two Companies

Imagine a company collecting customer data to improve its service. One day, that information is leaked. The company has no proof of consent. No internal process. No one knows what to do.

Now picture a different company. It collects only necessary data. It’s transparent. It has a plan. If something goes wrong, it acts within hours, not days.

Both companies operate in the same market. But only one is ready. That’s the difference the Vietnam Personal Data Protection Law makes, not just in penalties, but in business continuity and brand trust.

What theVietnam Personal Data Protection Law Requires and Why It Matters

Scope and Application

The law covers any organization that collects, stores, uses, or shares the personal data of people in Vietnam. It applies even if the organization is located elsewhere, as long as it works with local users or customers.

Consent and User Rights

Consent must be active, informed, and purpose-specific. No hidden terms. No default opt-ins. Users must understand what data is collected, why, and how it will be used, and must be free to say no.

Assessments and Documentation

Organizations must create written explanations for their data practices, especially if data is transferred across borders. These assessments help authorities evaluate whether your business is handling data properly.

Breach Reporting

If personal data is leaked or misused, you have just 72 hours to report it. Delays not only bring legal trouble but damage trust. Preparation is non-negotiable.

Enforcement of 5 % of Annual Revenue

Violations can result in major financial penalties, up to 5 percent of annual revenue, or 10 times the profit gained through illegal data use. The law is enforced by the Ministry of Public Security of Vietnam.

Small Business Consideration

Some requirements may be eased temporarily for smaller companies. But the obligation to act responsibly, and to respond to breaches, still applies to everyone.

Why This Vietnam Personal Data Protection Law, and Why Now?

Many business leaders ask: Why is Vietnam doing this now?

Because the risks have changed. And Vietnam has changed, too.

• The country is now one of the region’s fastest-growing digital economies.
• Personal data is the currency of the future, and the weapon of choice for fraudsters.
• Citizens have been targeted by scams using stolen data.
• The government has seen how lack of rules weakens both public safety and economic stability.

This law is part of a wider movement: Vietnam’s push to define its digital future, not inherit it. It’s about balancing open markets with sovereign control.

And for foreign businesses, that’s not a wall, it is a welcome mat. It shows that Vietnam is serious about becoming a trustworthy, modern, competitive destination.

What to Do Next With Vietnam Personal Data Protection Law

Start with mindset. This is not just a checklist. It is a leadership test.

• Understand how personal data flows in your business.
• Create visibility, not confusion.
• Make compliance part of your brand, something customers see, not just regulators.
• Assign responsibility and build a response plan.
• Review your language. Does your consent form sound like a contract or a conversation?
• Ask your teams if the company needs this data and do users know what the company does with it.

Treating the Vietnam Personal Data Protection Law as a partnership, not punishment, will set you apart.

A Step-by-Step Path to Prepare for Vietnam Personal Data Protection Law

Even if every company is different, the journey toward compliance often follows a similar path. Here are six clear steps your business can follow to align with the Vietnam Personal Data Protection Law.

You do not need to complete them all at once, but moving forward with consistency is key.

Step 1: Understand Your Data

Identify what personal data you collect, where it comes from, and how it moves through your organization.

Step 2: Review Why You Collect It

Clarify your reasons for collecting each type of data. Only keep what’s necessary.

Step 3: Create Clear Consent Processes

Ensure users can say yes or no freely and in plain language. Avoid default opt-ins.

Step 4: Appoint Someone to Be in Charge

Assign a trusted person or team to manage data protection and communication with regulators.

Step 5: Prepare for Incidents

Have a simple, clear plan ready in case of a data breach. Speed matters.

Step 6: Write It Down

Document your practices. This shows intent and builds trust inside and outside your business.

Frequently Asked Questions (FAQ)

Q: Does the Vietnam Personal Data Protection Law require data to be stored locally?

A: Not in all cases. But authorities may require local storage or access for certain data types.

Q: Can we include consent in general terms and conditions?

A: No. Consent must be separate, active, and purpose specific.

Q: What if our company is outside Vietnam?

A: If you handle personal data of Vietnamese users, the law applies, no matter where you are based.

Q: Are small companies exempt?

A: Some obligations may be delayed for small firms, but responsible data handling is still required.

Q: What happens if we do not report a breach in time?

A: You risk higher fines and damage to your reputation. Having a plan makes all the difference.

Legal Readiness Is Business Strength

This is not just a law. It’s a moment.

Vietnam has drawn a digital boundary and invited the world to cross it, with respect, with care, with alignment.

The Vietnam Personal Data Protection Law is not a burden. It is a blueprint for growth with trust. For building businesses that last. For earning loyalty in a region that rewards those who act responsibly.

Foreign companies that prepare early and work in harmony with these new rules will be seen not just as compliant, but as credible, future ready, and welcomed.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/privacy/vietnam-personal-data-protection-law-new.html

8 Key Updates in the Vietnam Nationality Law 2025 Every Overseas Vietnamese Should Know

  Vietnam has revised its nationality law.

On June 24, 2025, the National Assembly passed key updates in the Vietnam Nationality Law that affect how overseas Vietnamese can apply for, confirm, or retain Vietnamese nationality. The revised Vietnam Nationality Law 2025, effective from July 1, 2025, simplifies many procedures while tightening rules in specific areas.

This guide outlines the eight most important changes in Vietnam Nationality Law, provides a step-by-step checklist, answers frequently asked questions, and explains why these changes are happening now.

8 Key Updates in the Vietnam Nationality Law 2025 Every Overseas Vietnamese Should Know

Why Reform Vietnam Nationality Law, and Why Now?

The timing of this legal reform of Vietnam Nationality Law is not accidental. Behind the legislative language lies a deeper reality that Vietnam is entering a new phase in its nation building journey. 

For decades, overseas Vietnamese, although sentimentally embraced as part of the greater Vietnamese family, their legal rights have often been falling in the gap.

The new law seeks to fix that gap which is in line with the policy of the country to look forward (not back).

But beyond cultural reconnection, there are three structural reasons this change of Vietnam Nationality Law became urgent:

1. Vietnam’s economic transition depends on global engagement: To move from manufacturing to innovation, Vietnam needs more than capital, it needs ideas, networks, and know-how. Overseas Vietnamese often sit at that intersection. The Vietnam Nationality Law now sees them not only as returnees but as strategic partners.
2. Demographic pressure is rising: Vietnam’s aging population and tightening labor supply make overseas Vietnamese a valuable resource. The revised Vietnam Nationality Law provides a legal foundation for those who wish to return, not just to retire, but to teach, build, and lead.
3. Geopolitical positioning: In a region shaped by global competition, Vietnam is reinforcing its identity and reach. By clarifying who belongs and under what terms under the revised Vietnam Nationality Law, the country strengthens internal unity and external legitimacy.

Eight Key Legal Updates on Vietnam Nationality Law

Faster pathway for contributors

The Vietnam Nationality Law now offers a simplified naturalisation route for individuals contributing to Vietnam through professional skills or achievements. The five-year residency and financial sufficiency conditions are waived if contributions to national development can be shown.

Dual nationality permitted in special cases

While dual nationality is generally not allowed, the law introduces an exception. If your foreign nationality is considered beneficial to Vietnam, you may.

Single nationality for public service

Those appointed or elected to government, judicial, or military positions must renounce other nationalities and reside in Vietnam full-time.

Easier proof of Vietnamese origin

The Vietnam Nationality Law allows broader documentation to verify Vietnamese ancestry. Family records, community letters, and other evidence may now support applications. This is especially helpful for those without access to older birth certificates in Vietnam or household records.

Name flexibility

Applicants can combine Vietnamese and foreign names on official documents, providing more personal and professional continuity.

Citizenship revocation without appeal

The Vietnam Nationality Law permits nationality to be revoked if obtained by fraud or if national security is compromised. These decisions are final and not subject to judicial review.

Presumed nationality for renounced citizens

Overseas Vietnamese who never officially renounced their nationality are still considered Vietnamese citizens. Confirmation can be obtained via embassies abroad.

Step-by-Step Guide Applying Vietnamese Nationality or Confirming Vietnamese Nationality

Step 1: Check your status

• Have you ever held Vietnamese nationality?
• Did you formally renounce it?
• Are you of Vietnamese descent?

Step 2: Collect your documents

• Proof of ancestry (family book, birth certificate, school records, or community letters)
• Valid passport(s)
• Criminal record card

Step 3: Choose the right pathway

• Confirmation of Vietnamese origin (if never formally renounced)
• Application for nationality (if applying anew)
• Re-acquisition of nationality (if previously renounced)

Step 4: Submit your application

• Via the Vietnamese embassy abroad or in Vietnam at the Ministry of Justice
• Prepare translations and notarised copies where required

Step 5: Wait for decision

• Target: 2-3 weeks once complete dossier is accepted

Step 6: Complete post-approval steps

• ID card or citizen registration
• Update other records and legal documents

Helpful resources:

• Birth Certificate Application
• Criminal Record Guide

FAQs on Applying Vietnamese Nationality or Confirming Vietnamese Nationality

Q1: I have Vietnamese parents but no birth certificate. Can I apply?

Yes. The Vietnam Nationality Law now allows other forms of proof including school records, community letters, or language certificates.

Q2: How do I apply for a criminal record card in Vietnam?

You can apply through the Department of Justice or request assistance via legal representatives.

Q3: Can I keep my foreign passport if I naturalise?

Only with written approval in cases of special contribution to national interests.

Q4: What if I was born in Vietnam but now hold another nationality?

You may still be a Vietnamese citizen unless you formally renounced your nationality. Embassy confirmation is recommended.

Q5: What happens if I submit incorrect documents?

Under the Vietnam Nationality Law, providing false documents may lead to cancellation of citizenship without appeal.

Conclusions

The Vietnam Nationality Law 2025 is not just a legal tool. It is a statement of intent. Vietnam is signaling to overseas Vietnamese that now is the time to reconnect, not only culturally but also legally and structurally.

By removing barriers and clarifying conditions, the government invites overseas Vietnamese to be part of its next chapter for the country that want to look forward (not back).

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/nationality/update-vietnam-nationality-law-2025.html

Greenwashing in Vietnam: 5 Legal Triggers That Can Undo Your Deal and How to Fix

  They told you everything was green.

The ESG policy looked right. And you signed the deal. Then the audit report leaked. Then the complaints started flowing.

And you learned the hard way, what looked like sustainability was just storytelling.

The practice of greenwashing in Vietnam is no longer a branding issue. It is a legal and transactional threat. Contracts can collapse. Investment protections can erode. Market access can vanish. And international buyers would walk away.

In here, let’s together bring in a Vietnam lawyer’s view of how greenwashing in Vietnam becomes a legal trap, and how to defuse it using contractual agreements.

We’ll explore five common legal issues hidden in ESG claims, how Vietnamese business culture sometimes complicates these issues, and how to convert ESG risk into legal resilience in Vietnam.

Greenwashing in Vietnam

Greenwashing in Vietnam is a Deal Risk, Not a PR Problem

Sometime ago, environmental talk was just a marketing bonus for ESG for exporters from Vietnam. Today, ESG compliance in Vietnam is made into law, trade agreements, financing conditions, and shareholder expectations. And that is where the real risk lies.

Because once ESG makes its way into a contract clause, it stops being soft. It becomes enforceable.

What might be difficult to notice is that, greenwashing in Vietnam sometimes, it is a selective truth. Highlighting a solar panel, hiding wastewater discharge. Claiming about fair wages, omitting the subcontractor practices. These partial truths form the basis of what lawyers call misrepresentation.

But there is another layer, Vietnamese business culture itself. The emphasis on building trust through relationships, the comfort with informal verbal assurances, and the reluctance to challenge a long-standing partner’s claims, all of these contribute to oversight that ESG claims can go unchallenged. ESG in Vietnam, for many companies, is still seen as branding rather than binding commitment.

How Legal Drafting Can Shield You from ESG Fiction

This is about what happens when things go wrong, and how to protect your deal before the greenwashing in Vietnam headlines hit.

We will discuss our opinions on how to:

• Recognize the different legal faces of greenwashing in Vietnam
• Use Vietnamese civil and commercial law to shift liability
• Consider using clauses that allow you to audit, terminate, and seek indemnity
• Prevent ESG surprises through due diligence
• Navigate cultural sensitivities while reinforcing contractual clarity

It’s ESG insurance, but instead of paperwork, it’s contract.

A Realistic Scenario Investors Face in Vietnam

Imagine this.

You are negotiating a joint venture with a Vietnamese company. Their claim is all materials are eco-certificated.

You invest.

Later, you receive a claim letter from an oversea client because it turns out, only part of the product meets the requirements which make the whole product is subject to ban regulation. The certificates are self-issued.

This is not just greenwashing in Vietnam, it is contractual fraud by omission. And unless your agreements had ESG-specific warranties, your legal options are limited.

Now put in the cultural challenge when your partner insists this was not a big issue and offers to fix it next season. In Vietnamese business culture, preserving the relationship often outweighs immediate compliance. But foreign investors cannot afford that, especially when legal obligations to clients and regulators are clear-cut.

5 Legal Triggers Where ESG Greenwashing in Vietnam Can Undo Your Deal

Let’s break this down into five key areas where greenwashing in Vietnam becomes a live legal trap for investors and business partners.

Misrepresentation and Fraud in Contract Formation

Under the Civil Code of Vietnam, contracts can be annulled if signed based on misinformation or deception. ESG claims that were material to the decision to invest, if later shown to be false, can form legal grounds for damages.

But the problem is ESG representations are often not treated like financial figures, so they’re left vague. And in Vietnamese practice, in many cases, mutual trust may even override written terms unless explicitly challenged.

Breach of Representations and Warranties

Careful drafted Share Purchase Agreement, Jointventure contracts, and supply agreements often include reps and warranties, statements of fact guaranteed by the other party. If ESG claims were included, and later proven false, they can form a breach.

Greenwashing in Vietnam undercuts these promises. But enforcing them may require pushing past the cultural discomfort of confrontation, something Vietnamese parties often resist unless clearly spelled out in the agreement.

Material Adverse Change (MAC) Clauses

You may have inserted a MAC clause for general compliance. But ESG breaches, especially if they result in license suspension, regulatory fines, or reputational damage, can qualify as a “material change” under Vietnamese law.

Without clear contractual timelines, these can delay enforcement and allow ESG risks to accumulate without you knowing in time.

Regulatory Penalties and Public Disclosure

Vietnamese laws like the Law on Environmental Protection, the Law on Advertising, and the Law on Consumer Protection contain strict clauses on misleading environmental claims.

Authorities are increasing scrutiny on sustainability deception. If your partner is caught greenwashing in Vietnam, investigations can halt operations, revoke licenses, and trigger retroactive liabilities, where you, as investor or buyer, get pulled in.

Do not expect a written confession or open admission in Vietnamese culture.

Crosswashing in Vietnam and Selective ESG Reporting

Crosswashing in Vietnam is when a company showcases a single positive ESG initiative, like renewable energy use, but hides parallel abuses, like water pollution.

This creates a legal trap, because even if their reports are technically true, they may be misleading by omission which can be interpreted as deceptive intent under unfair competition law. 

Practical Legal Steps to Protect Against ESG Deception

Step 1: Define ESG in the Contract

Do not just say that the Company shall comply with ESG standards. Define them:

• Refer to Vietnamese laws
• Cite specific international frameworks
• Apply them across the supply chain
• State that these obligations are material, non-negotiable, and subject to inspection

Step 2: Draft the Greenwashing Clause

You need to review the contract and consider the clause which the seller represents that all ESG-related disclosures are materially accurate and complete. Any misrepresentation, whether by commission or omission, shall constitute a material breach, entitling the buyer to terminate and seek indemnity.

This helps make greenwashing in Vietnam is not just reputational, it is actionable.

Step 3: Holdbacks for ESG Milestones

Reserve a portion of payment tied to ESG compliance after some time, verified by third-party audit. This bypasses cultural hesitation to confront and ties ESG to cash flow, something no party ignores.

Step 4: Create Audit Rights with Surprise Inspections

Contracts should allow:

• Unannounced audits
• Document checks
• Worker interviews
• On-site testing

Greenwashing in Vietnam thrives where oversight is passive. This makes it proactive.

Step 5: Conduct ESG Due Diligence Like Financial Due Diligence

• Ask probing questions
• Verify permits
• Speak to employees
• Understand local norms

Sometimes, the red flag is not what is shown, but what is never asked. Do not assume local partners will volunteer bad news.

Make ESG Part of Your Legal and Cultural Intelligence

Greenwashing in Vietnam is no longer subtle. But it is also a cultural puzzle. In a business environment where harmony is prized over confrontation and trust is shown before verification, legal safeguards must do.

You do not need to mistrust your partners. But you do need to put your trust in writing, and back it with audit rights, clear terms, and enforcement paths.

Hence, in conclusion, greenwashing in Vietnam is not just a branding issue, it is a legal and commercial risk that can quietly undermine contracts, investor confidence, and regulatory standing. In a business culture where informal agreements and trust-based relationships are common, vague or misleading ESG claims can slip by unnoticed until it would be too late. The solution is not suspicion, but structure. Clear legal language, enforceable ESG clauses, and practical audit mechanisms can protect your investments. As ESG expectations rise globally, those who anticipate and address these risks legally will lead with resilience, clarity, and compliance in Vietnam’s fast-changing market.

Frequently Asked Questions (FAQ)

What defines greenwashing in Vietnam?

When companies exaggerate or misrepresent eco-friendly or ethical practices to influence business decisions, without substantive compliance or transparency.

Are ESG misrepresentations legally actionable?

Misleading green claims violate consumer, advertising, and competition laws. Contracts with ESG warranties also provide legal remedies.

How do you identify greenwashing before contracting?

Ask for permits, audit reports, and third-party certifications. Cross-check claims through site visits and staff interviews.

What is crosswashing?

Crosswashing occurs when companies publicly highlight one green initiative while continuing harmful practices elsewhere.

Can international investors face consequences from local greenwashing?

Investors may lose contracts, face lawsuits, or suffer reputational harm if their partners are exposed for false ESG claims.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/update/greenwashing-in-vietnam-5-legal-triggers.html