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Vietnam business partner due diligence: a checklist

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Vietnam business partner due diligence starts with one rule: check the company on paper before you sign anything. Most of what you need is public and free. Ask your partner for its registration papers, then match them against the official records. This checklist shows the steps in the order most buyers and investors use them.

1. Start with the registration record

Every company in Vietnam is set up under the Law on Enterprises, No. 59/2020/QH14, which took effect on 1 January 2021. A company receives an enterprise registration certificate. It shows the company name, the enterprise code, the registered address, the charter capital and the legal representative.

Ask your partner for a copy. Then look the company up yourself on the National Business Registration Portal (dangkykinhdoanh.gov.vn). The portal has a search for enterprises. Compare the name, code and address with the paper you were given. If anything differs, ask why before you go further.

Sources: National Business Registration Portal (dangkykinhdoanh.gov.vn); Law on Enterprises No. 59/2020/QH14, National Assembly of Vietnam.

2. Confirm who can sign

The legal representative can sign contracts and deal with others on the company's behalf. Under the Law on Enterprises, a company must have at least one legal representative. The name is on the registration certificate.

Check that the person who signs your contract is that legal representative. If someone else signs, ask for a written authorization letter that sets out what they may do. Keep a copy in your file. A contract signed by the wrong person can be hard to enforce later.

Sources: Law on Enterprises No. 59/2020/QH14, provisions on the legal representative.

3. Read the company's registered details

Business registration is governed in detail by Decree 01/2021/ND-CP, which took effect in January 2021. It sets what a registration file contains and how changes are recorded. For you, the point is simple: the record should be current.

Look at these items.

  • The date the company was founded. A very new company has no track record.
  • The registered charter capital. Compare it with the size of the deal.
  • Any change of address, name or legal representative. Frequent changes deserve a question.
  • The business lines listed. Your deal should fit inside them.

Sources: Decree 01/2021/ND-CP on business registration, Government of Vietnam; National Business Registration Portal (dangkykinhdoanh.gov.vn).

4. Check licenses for regulated work

Some activities need more than a registration certificate. Vietnam keeps a list of conditional business lines, and these need a license or another approval from the right authority. Examples include private security services and some trading activities.

Ask what your partner does, then ask for the matching license. Check that the license is valid, in the company's name, and covers the work in your contract. If your partner will import goods or operate in a special sector, ask which agency approves it and request that proof.

Sources: Law on Investment No. 61/2020/QH14, National Assembly of Vietnam, on conditional business lines.

5. Look at the people and the paper trail

Public records only tell part of the story. Ask for recent audited financial statements if the company must have them, tax registration details, and two or three references from past customers. Call the references. Ask whether the partner delivered on time and paid its own suppliers.

Visit the office if you can. Does the address on the paper match a real place with real staff? A short visit often tells you more than a long file. Write down what you checked, the date, and who gave you each document. If you meet staff, ask for a business card and check that the name matches the papers you hold.

Ask one more question: who owns the company? Owners and managers should be named in the company's own papers. If your partner cannot or will not say who stands behind the business, treat that as a warning. Good partners expect these questions and answer them without fuss.

6. Keep a simple record

Put your checks into a one-page file. List each item, the source, the date you checked it and the result. Mark any gap you could not close. Share the file with the people on your side who approve the deal, so nobody relies on memory. Then decide: go ahead, go ahead with a condition, or walk away.

Repeat the registry search just before you sign. Records can change between your first meeting and the signing day. This is general information only. Before a big deal, have a Vietnamese lawyer who handles company checks read through your file.

Sources: National Business Registration Portal (dangkykinhdoanh.gov.vn); Law on Enterprises No. 59/2020/QH14.