Corporate legal department in Vietnam: is one required, in-house or outsourced?

What is a legal department in Vietnam?

A legal department is a function that advises management on legal risk, carried out by one person or a team. In business usage the Vietnamese word phap che covers three things: the function (controlling legal risk), the unit (a legal department) and the person (a legal officer or head of legal). The work usually includes drafting and reviewing contracts, preparing the charter and internal rules, tracking filings and periodic reports, and acting as the contact point with authorities and outside lawyers when a dispute arises. In the texts LexData checked, the law does not require a private or foreign-invested company to have one (see the sections below).

What is rarely said is that the legal framework for the term is much narrower than its everyday use. Clause 2, Article 2 of Decree 55/2011/ND-CP describes the legal affairs organisation of a state-owned enterprise as a specialist unit that advises the members' council, board of directors, company chairperson, general director or director on legal issues in the enterprise's organisation, management and business activity. LexData found no equivalent definition for a private or foreign-invested company: the term "legal affairs" does not appear in the full text of the Law on Enterprises 59/2020/QH14 (including Law 76/2025/QH15), the Law on Investment 143/2025/QH15, the Labour Code 45/2019/QH14, Decree 168/2025/ND-CP, Decree 96/2026/ND-CP or Decree 219/2025/ND-CP.

Does Decree 55/2011/ND-CP require a legal department in Vietnam?

Decree 55/2011/ND-CP of 4 July 2011 took effect on 25 August 2011. Decree 56/2024/ND-CP of 18 May 2024, in force from 2 July 2024, amended many of its articles, and the result is consolidated in Consolidated Text 2883/VBHN-BTP. As of 3 October 2026 LexData found no replacing text; the latest amendment is Decree 56/2024/ND-CP.

Reading the scope correctly is decisive. Article 1 lists ministries, ministerial-level agencies, agencies under the Government, specialised agencies under provincial People's Committees, state-owned enterprises, public service units, and organisations and individuals concerned with legal affairs. A "state-owned enterprise" under Clause 11, Article 4 of the Law on Enterprises is one in which the State holds more than 50% of charter capital or of the voting shares. Decree 55 does not redefine the term, so on LexData's reading it is the Law on Enterprises concept. A limited liability or joint stock company whose controlling capital is held by private or foreign investors is outside this group unless the State holds more than 50%. Decree 55 therefore cannot be cited as a general duty on every company.

Even inside its scope the decree does not impose a fixed unit. Clause 1, Article 10 lets the head of a state-owned enterprise decide, according to the need for legal work, whether to set up a legal affairs organisation or to assign full-time legal staff.

Article 7 is a task list worth borrowing from even when the decree does not apply:

• build, amend or comment on the charter, internal rules and regulations;
• draft template contracts, give a legal opinion on draft contracts and agreements, and take part in negotiating and signing them;
• publicise, monitor and check compliance with the charter, rules and regulations;
• advise, or hire outside advisers, on legal issues in the business, and give legal opinions on decisions about organisation, management, restructuring and dissolution (point d, Clause 1);
• take part in resolving civil, business, commercial and labour disputes; take part in proceedings as the authorised representative of the company chairperson, general director or director, or advise on hiring lawyers for proceedings (point dd, Clause 1);
• disseminate legal education and monitor legal compliance in the enterprise (Clause 2).

Two details matter in practice. Even the text written for state-owned enterprises mentions hiring outside legal advice (point d, Clause 1) and advising on hiring lawyers for proceedings (point dd, Clause 1), so an internal team combined with outside counsel is not foreign to how the law looks at the function. And Clause 3, Article 12 only lets state-owned enterprises "apply" the standards for legal officers when choosing staff, so even there the standards are applied by analogy.

Does the Law on Enterprises require a private or foreign-invested company to have a legal department in Vietnam?

No such provision appears in the articles LexData checked. The Law on Enterprises has no legal department provision: the charter states the management structure (point e, Clause 2, Article 24), and other internal departments are left to the company (an inference from the law's silence). It also requires the company to keep the charter, internal management rules and licences (point a and point b, Clause 1, Article 11). Companies must meet their registration, change-registration and reporting obligations (Clause 2, Article 8), but the law does not say who inside the company does that work.

That does not mean the law is indifferent. Responsibility is placed on the people who manage:

• The legal representative must exercise assigned rights and duties honestly, prudently and to the best of their ability to protect the company's lawful interests, and is personally liable under law for loss caused to the company if they breach this (Article 13, Clause 2 as amended by Law 76/2025/QH15). See what is a legal representative in Vietnam.
• Limited liability company with two or more members: the Chairperson of the members' council, the Director or General Director and other managers must act honestly, prudently and to the best of their ability to protect the company's maximum lawful interests (point a, Clause 1, Article 71).
• Joint stock company: board members, the Director or General Director and other managers must exercise their rights and duties in line with the Law on Enterprises, other relevant law and the charter (point a, Clause 1, Article 165), honestly, prudently and to the best of their ability to protect the company's maximum lawful interests (point b, Clause 1, Article 165); if they breach this they are personally or jointly liable to make good lost benefits, return benefits received and compensate the company and third parties in full (Clause 2, Article 165).

For a joint stock company the Law on Enterprises also builds in supervision. The company chooses one of two management models (Article 137, unless securities law provides otherwise): one with a Supervisory Board (not mandatory if the company has fewer than 11 shareholders and institutional shareholders hold less than 50% of shares), or one with an Audit Committee under the board. The Supervisory Board reviews and assesses the internal control system, internal audit and risk management (Clause 4, Article 170); the Audit Committee supervises the company's compliance with law, regulators' requirements and internal rules (point g, Clause 3, Article 161). That is not a legal department and does not replace day-to-day legal advice, but it shows the law places a compliance supervision function at governance level.

Two conclusions follow, one correct and one not. Correct: legal compliance is a management responsibility, so a company needs some way of knowing what it must comply with. Not correct: the law does not say that way must be a legal department. And handing a matter to a legal team does not move the responsibility; the manager who signs the decision remains the manager.

This entry does not cover sectors with their own rules on internal control or compliance structures, such as credit institutions, insurance or securities. A company in those sectors should check its sector law before drawing conclusions.

What does the Law on Lawyers say about paid legal advice to a company?

This matters when a company hires outside counsel. The first thing to say is what this entry does not claim: LexData read the Law on Lawyers and found no provision stating that only lawyers may give paid legal advice. The entry therefore draws no conclusion about persons other than lawyers, and does not analyse whether an organisation that is not a law practice organisation may sell legal advice; that question may also be subject to business registration rules and to penalties in the judicial support field, and needs separate checking. What the Law on Lawyers says is as follows.

Current law. The Law on Lawyers No. 65/2006/QH11, amended by Law No. 20/2012/QH13 and consolidated in Consolidated Text 03/VBHN-VPQH. A draft amended Law on Lawyers is being prepared and reviewed; as of 3 October 2026 LexData found no replacing law passed. When a new law is passed, the article numbers and content below may change, so check the text in force before relying on them. Separately, from 1 October 2026 to 30 September 2028, Resolution 24/2026/QH16 pilots a public lawyer regime that includes people working in state-owned enterprises who qualify for a lawyer's practising certificate; it is a state-sector pilot and is not aimed at private or foreign-invested companies. LexData does not cite article numbers of the resolution because it has not checked them against the full Gazette text.

Legal advice is a lawyer's legal service. A lawyer's legal services cover participation in proceedings, legal advice, out-of-court representation and other legal services (Article 4). Legal advice means guiding the client, giving opinions and helping draft documents about the client's rights and obligations, and a lawyer advises in all fields of law (Clause 1, Article 28). To practise, a person must hold a lawyer's practising certificate and join a Bar Association (Article 11).

Two forms of practice. A lawyer practises within a law practice organisation or as an individual (Article 23). Law practice organisations are law offices and law firms (Clause 1, Article 32) and may operate from the date they receive a Certificate of Registration of Operation (Clause 4, Article 35). A lawyer practising as an individual is one employed under a labour contract by an agency or organisation that is not a law practice organisation (Clause 1, Article 49), in other words an in-house lawyer.

Confidentiality. A lawyer must not disclose information about a matter or client learned while practising, unless the client consents in writing or the law provides otherwise (Clause 1, Article 25); a law practice organisation must make sure its staff do not disclose it either (Clause 3, Article 25).

Foreign lawyers. A foreign law firm or branch in Vietnam may give legal advice and other legal services, and may assign Vietnamese lawyers within it to advise on Vietnamese law, but may not assign lawyers to take part in proceedings as representative, defence counsel or protector of a party's lawful rights and interests before Vietnamese courts, and may not provide legal paperwork or notarisation services relating to Vietnamese law (Article 70). A foreign lawyer practising in Vietnam may advise on foreign and international law, and on Vietnamese law only if holding a Vietnamese bachelor of law degree and meeting the same requirements as a Vietnamese lawyer (Article 76).

In-house, outsourced or hybrid: which legal department in Vietnam fits?

This section is LexData's judgment, not a rule of law. LexData also offers legal retainer services to companies, so the view may lean toward outsourcing; check it against the checklist at the end. The law does not pick a model for the company (see above); the differences lie in fixed cost, breadth of expertise and presence.

As for scope, a legal function (in-house or outsourced) usually covers the groups below. The source column lists only obligations LexData has checked against current text.

Legal department in Vietnam for foreign-invested companies

Foreign-invested companies usually have four extra layers that a single in-house person finds hard to cover:

1. The parent's legal team cannot replace Vietnamese-law advice. Group counsel is usually trained in the law of the home jurisdiction (practical judgment). A foreign lawyer practising in Vietnam may advise on Vietnamese law only if holding a Vietnamese bachelor of law degree and meeting the same requirements as a Vietnamese lawyer (Article 76 of the Law on Lawyers); that article is about foreign lawyers practising in Vietnam, not about a group's internal legal team. Contracts under Vietnamese law, employment and registration work still need someone who knows Vietnamese law.
2. Recurring obligations. Besides business registration, an economic organisation carrying out an investment project must file quarterly and annual reports (Article 94 of Decree 96/2026/ND-CP), changes touching the IRC need to be reviewed before they are made, and work permit extension deadlines for foreign staff (Decree 219/2025/ND-CP) run independently of both. See what is a work permit in Vietnam.
3. Language and reporting to the parent. Bilingual contracts, internal rules and risk reports for headquarters often call for someone comfortable in both legal systems. This is practical judgment.
4. Legal representative and signing authority. Where the legal representative is a foreigner who travels often, authorisations and signing limits need control; see what is a legal representative in Vietnam.

In an acquisition or review, due diligence is often where legal function gaps surface: contracts not properly archived, internal rules never registered, permits that have expired. For the basics of the company type, see what is an FDI company in Vietnam. LexData's legal retainer for companies in Vietnam is an outsourced legal function billed monthly, quarterly or annually; see also commercial contract drafting and review, employment law advice and work permits for foreign employees.

Checklist for choosing a legal function model

This is a practical checklist, not a legal requirement.

1. List the real workload over the last 6 to 12 months: contracts signed per month, employees, permits, disputes or complaints.
2. Identify the areas needing depth: employment, investment, personal data, tax, disputes. One person rarely excels at all of them.
3. Decide whether someone must be on site (meetings, same-day contract approval) or whether a response within an agreed time is enough.
4. Name an internal contact whichever model you choose: the person who supplies facts and carries management's decisions. Legal does not sign for management or carry its responsibility.
5. If outsourcing, get in writing: which tasks the package includes, how work outside it is priced, who is in charge, response times, reporting frequency and the term (Clause 2, Article 26 of the Law on Lawyers requires a written legal services contract).
6. Check the provider: ask for the legal status of the entity and of the people who will advise, the scope of services and a confidentiality undertaking. If the provider is a law practice organisation, you can check its Certificate of Registration of Operation (Article 32, Clause 4 of Article 35), its lawyers' practising certificates and Bar Association membership (Article 11), professional liability insurance (Clause 6, Article 40) and the duty of confidentiality (Article 25).
7. For a foreign-invested company: confirm the provider can advise on Vietnamese law and work in the language you need.
8. Set a review date after 6 to 12 months; move to a hybrid model as the workload grows.

Common mistakes

• Assuming the law requires a legal department, and citing Decree 55/2011/ND-CP as a general duty. It applies to the groups in Article 1, which include state-owned enterprises, not private companies.
• Assuming that giving a matter to legal moves the responsibility. The legal representative and managers keep their own duties (Articles 13, 71 and 165 of the Law on Enterprises).
• Hiring one legal officer and handing over every field, when foreign employees, investment and personal data each carry their own duties and deadlines.
• Outsourcing without defining the package in writing, which leads to argument over what the fixed fee covers.
• Not checking the provider (legal status, scope of services, confidentiality undertaking).
• Relying entirely on the parent's legal team or a foreign lawyer for Vietnamese-law questions, overlooking that Vietnamese law differs from the home jurisdiction's and the limits on the practice of foreign lawyers and law practice organisations in Vietnam (Articles 70 and 76 of the Law on Lawyers).