What do businesses do in the midst of the "violent flow" of Vietnamese law?

The year 2025 will witness strong legal fluctuations unprecedented in Vietnam's legislative history. The National Assembly, together with the Government of ministries, departments and branches, has issued a record number of new laws, decrees and circulars that have created  a "fierce flow" of Vietnamese law. Although it opens up opportunities to improve the business and investment environment, this event poses many challenges for the business community. From the perspective of a companion, sticking with businesses through these fluctuations, we would like to offer some thoughts on the multi-dimensional impact of legal flows in 2025, and at the same time suggest some solutions to help businesses proactively "steadily row" in the face of big waters not to be swept away or drowned in the context of many uncertainties today.

The strong flow of "new water" always has potential whirlpools and rapids that any boater needs to be alert to identify.

Rapid and continuous fluctuations of Vietnam's legal flow in 2025

Never before has the pace of change of the legal framework been as fast as in 2025. According to statistics, in 2025, there will be 86 new laws promulgated by the National Assembly through 2 sessions, more than 300 decrees have been "born" by the Government, and it is impossible to count all the circulars that have been issued and taken effect[1]. In particular, many important laws that directly impact businesses have been passed,  such as the Law on Enterprises 2025 (amended), the Law on Investment 2025, the Law on Corporate Income Tax 2025, the Law on Value Added Tax, the Law on Social Insurance (amended), the Law on Personal Data Protection, etc.

The cause of this legal "flood" comes from the policy of drastic institutional reform after the pandemic and the need to complete the legal corridor for a transforming economy with the desire to bring the country into a new era. Many important laws in the business sector have been comprehensively amended to simplify administrative procedures, increase autonomy for businesses and encourage innovation. Many documents were born with the desire to focus on reducing business conditions, standardizing the registration process, and strengthening the application of digital technology in case management. Financial and tax policies have also had deep reforms such as implementing a global minimum tax rate against transfer pricing according to OECD standards, adding tax incentives to encourage businesses to invest in science and technology and start-ups. The digital transformation in state management has also been promoted, as shown by the decree allowing the use of VNeID electronic identification to replace papers when carrying out public procedures from November 1, 2025[2]. All of these changes create a new, modern and ambitious legal landscape towards transparency and fairness for the business environment in Vietnam. However, the strong flow of "new water" always has potential whirlpools and rapids that any boater needs to be alert to identify.

The flow of legislation affects every business – from multinational corporations to business households

Not only large enterprises, but all types of businesses from multinational companies to small trading households are affected by the wave of laws in 2025. Practice shows that the smaller the business, the more difficult it is to keep up with changes in legal policies and the more limited the ability to comply. If large corporations and companies face more complex regulations on governance and international integration, small and medium-sized enterprises as well as individual business households struggle to adapt to new obligations in their daily operations.

For large-scale enterprises and foreign-invested enterprises, the changes in the law in 2025 both open up opportunities and set higher compliance requirements. For example, Decree 236/2025/ND-CP issued in the year applies an additional corporate income tax mechanism to prevent the erosion of the tax base according to OECD standards – a step to prevent the transfer of profits abroad. This policy particularly affects multinational corporations, forcing them to review their tax strategies, ensuring compliance with the global minimum tax rule. In addition, the amended Law on Enterprises 2025 for the first time includes the concept of "beneficial owner" into the law, requiring businesses to be more transparent about the individual who actually controls the business even though they are not in their name. This regulation, along with improving the personal responsibility of legal representatives and tightening the obligation to contribute capital, financial statements, etc. has put large companies, especially those with complex ownership structures or FDI companies, in a situation where they have to adjust their internal management systems to meet new legal requirements. On the positive side, these reforms aim to make business operations transparent and approach international standards, but at the same time increase the workload of compliance and legal risks if businesses do not update and change to adapt.

From June 1, 2025, all business households with a revenue of 1 billion VND/year or more are required to use e-invoices generated from cash registers that are directly connected to the tax authority's data system[3]. This shows that not only the "big guys", business households and small business individuals are also strongly affected by the new regulations. This regulation aims to modernize tax administration, gradually replace the presumptive tax collection method, increase transparency and accuracy in recording revenue of business households. This is a positive change in the long term, but in the immediate future, many small business households will be embarrassed by new technology, incur costs for purchasing equipment and software, and risk being sanctioned if violated. In fact, if invoices are not issued in accordance with regulations or data connection in time, business households may be fined a large amount of money for each violation, which is a great pressure for small traders who are used to doing business according to old habits.

The confusion of the people reflects the reality that many small business households are struggling to adapt to the new legal requirements. Owners of traditional grocery stores and small markets also face the problem of learning how to use invoicing software and updating tax accounting knowledge. These are things that go far beyond their traditional business experience for a long time.

The flow of the 2025 law has crept in, affecting all businesses. If large enterprises are under pressure to upgrade their governance to suit the new standards, small and medium-sized enterprises and business households will no longer be immune to the law. From urban to rural, from listed companies to sidewalk shops, no one can "stand on the sidelines" of this flow. Instead, they all had to learn to swim in the current, or they didn't want to be left behind.

Opportunities and challenges go hand in hand in the flow of law

Strong legal flows bring both benefits and challenges to the business community. On the downstream journey, there are sections of calm water that open up development opportunities, but there is also no shortage of rapids that require businesses to steer carefully.

On the positive side, it is clear that the 2025 law changes are aimed at the ultimate goal of improving the business environment. Administrative procedure reforms help reduce the burden of paperwork, save time and costs for businesses in the long run. The simplification of business conditions and standardization of processes in business law will create more favorable conditions for start-ups and business operations. The new tax and financial policies are aimed at transparency and fairness, preventing tax evasion and transfer pricing, contributing to creating a level playing field between domestic enterprises and FDI enterprises. For example, the regulation forcing e-commerce platforms to deduct and pay taxes on behalf of sellers on the floor from 2025 will help collect taxes more fully and relieve the burden of declaration for small business households selling goods online[4]. In addition, many preferential and support policies have also been issued to exempt and reduce corporate income tax in the first 2 years and 50% for the next 4 years for start-up technology enterprises; Expanding participation and increasing social insurance benefits for employees will help businesses retain skilled workers. These reforms, if implemented effectively, will help improve productivity, reduce hidden costs and raise the level of corporate governance, thereby increasing the competitiveness of the whole economy.

However, the downside of this strong legal flow is the compliance burden and uncertainty that businesses face. The first challenge is the speed and unpredictability of the law change. The survey shows that very few businesses are able to predict changes in legal regulations. Legal regulations change quickly and are unpredictable, and many new requirements are compliant, making businesses always in a passive position, unprepared to adjust business activities. Even the legal departments of many large companies admitted that they "couldn't keep up" with the "rain" of new documents. Small businesses are almost left to this "flow".

Another major challenge is the overlap and inconsistency in the legal document system. In Vietnam, a law often has many guiding decrees, each of which is accompanied by many circulars from ministries and branches. This situation leads to the instability of the policy. Enterprises that comply with this ministerial circular may contradict other ministerial regulations. Many businesses complain that "the law is not scary, the scary is the circulars and guiding letters" – because the documents under the law often change and the way of interpretation and application also depends on the enforcement officers. In addition, the quality of some new regulations is still inadequate and lacks practicality, making it difficult for businesses to comply or comply at a very high cost.

All of the above challenges sound the alarm that the stability and transparency of the legal system are still what businesses want. Because the stability and predictability of the law are extremely important for businesses to invest and do business with peace of mind. The flow of laws, if it is too tight and constantly changing, will erode the trust and initiative of businesses. Therefore, in addition to efforts to catch up and comply, the business community also expects the State to reform the way laws are developed, listen to business opinions more substantively, and limit the issuance of unfeasible regulations. In recent years, the voice of businesses has gradually been paid more attention in policy comments, but there are still many cases of policies issued without the participation and substantive consultation of the "beneficiary" who is the enterprise. This is also a long-term challenge. Businesses need to be more proactive in the role of policy critics, so that legal documents become more reasonable, "lifelike" and have more long-term vitality.

Source: Legal support information page for businesses

What should businesses do to adapt?

In the face of a strong and uncertain flow like the 2025 legal flow, businesses need to fully equip themselves with survival skills. Instead of panicking or giving up, every business – big or small – can proactively prepare and adapt to turn challenges into opportunities. So what should businesses do?

Firstly, closely monitor and promptly update new legal regulations.

This is a prerequisite. Businesses need to regularly update new legal documents issued from the National Assembly, the Government and ministries to grasp new policy information as quickly as possible. It is also important to forecast policy trends. Enterprises should pay attention to monitoring the draft laws and decrees that are being consulted to have early preparation of business plans and adjust operations accordingly. Avoid the case of "water to the feet before jumping", which is easy to put businesses in a passive position.

Second, review and adjust internal regulations, contracts, and processes.

When the new law is promulgated, businesses need to actively review their entire operational processes, especially in the fields of taxation, accounting, human resources, and internal management. Internal rules, regulations, contract terms, forms, personnel policies... which are no longer in accordance with the new law, they must be amended or supplemented in time. The early review helps businesses prevent the risk of being sanctioned due to accidental errors, and at the same time take advantage of new preferential policies (if any).

Third, the application of technology and digital solutions in compliance management.

The flow of laws in recent years is associated with digital transformation, so businesses also need to swim with the digital flow. Leveraging technology tools to make compliance activities lighter and more cost-effective. Technology also supports smart legal updates such as legal database platforms, electronic newsletters, and even artificial intelligence applications that can alert businesses to new documents and suggest compliance actions. Investing in digital transformation is not only to improve business efficiency, but also the key to helping businesses quickly adapt to the new legal framework in the 4.0 era.

Fourth, training and raising legal awareness for staff.

A business that wants to be well compliant needs all employees to understand and properly enforce the new regulations. As soon as there is an important legal change, businesses should organize internal training, inviting experts or law firms to present new points related to business activities is the right thing to do. In order for accountants to firmly grasp the new tax regulations; the sales department understands how to issue e-invoices; personnel update labor and insurance laws; operation managers know the new requirements on fire prevention and fighting, environment, etc. A culture of compliance needs to be "instilled" at all levels, to minimize legal risks, promptly detect and implement appropriate response solutions.

Finally, proactively consult with experts and provide policy feedback.

In the context of rapidly changing laws, connecting with legal experts and regulators is essential. Businesses should understand that when encountering legal problems, they should first seek legal advice from individuals and organizations for specific consultations, or through associations to send recommendations to the authorities if the regulations are unclear or inadequate. Proactively responding to and suggesting problems will help business voices be heard, contributing to more reasonable policy adjustments. This initiative not only helps businesses remove difficulties for themselves but also improves the general legal environment in the long run.

Firmly rowing in the middle of the flow of the law

The "flow" of Vietnamese law in 2025 is indeed fierce with layers of new regulations. But from an optimistic perspective, it is also the flow of transformation towards a transparent, modern business environment and approaching international practices. In large waters, businesses cannot stand still but must actively adapt, like a sailor steadily steering in the middle of the waves. Instead of being afraid of change, businesses should consider compliance with the law as a competitive advantage and turn themselves into leaders in implementing the new in a creative and effective way.

With the role of a consultant associated with the operation of the business for many years, we understand that each new regulation may cause initial disturbances, but if well prepared, the business will "push the boat". It is important to keep a calm and proactive attitude: calmly assess the positive and negative impacts, proactively plan for response and seize the hidden opportunities behind each change. The law can be likened to a river where people who know how to swim will take advantage of the current to go faster, while people who do not know how to swim are easily swept away by water. Therefore, in the face of a strong legal flow, businesses should prepare solid "swimming" skills. Compliance with the law is not only to "not sink to the bottom", but also to rise to the top in the new business environment. With initiative and flexibility, Vietnamese businesses can completely turn violent waves into a launching pad to take their boat far on the journey of sustainable development.

Lawyer Nguyen Van Phuc

HM&P Law Firm

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