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CORPORATE GOVERNANCE & OVER-INDEBTEDNESS: VIETNAM SME OUTLOOK

CORPORATE GOVERNANCE & OVER-INDEBTEDNESS: VIETNAM SME OUTLOOK

The Challenge: The Debt Spiral Trap

Recent studies, notably Ismail et al. (2025), highlighted a critical failure in Malaysian SMEs: sequential borrowing. This occurred when firms used new credit exclusively to service existing debt, creating a cycle fueled by aggressive marketing and fragmented regulation rather than intentional growth. And, we observe a parallel trend within Vietnamese and FDI SMEs. Due to restricted market expansion, many contemporary firms are over-relying on loan applications rather than internal resource optimization.

Strategic Pivot: From Loans to Equity

To achieve sustainable performance and cost efficiency, SMEs must shift their financial governance. While loans are a traditional tool, over-leveraging creates systemic risk.

  • The Goal: Transition from “survival borrowing” to effective loan optimization.
  • The Strategy: Integrate modern loan options with international equity fundraising and capitalization strategies to stabilize cash flow.

The Framework for Sustainable Success

For SMEs to remain competitive in the Vietnamese market, business plans must be refined through a multidimensional operational framework:

  1. Legal & Compliance: Navigating the specific nuances of the Vietnamese legal system.
  2. Professional Synergy: Leveraging networks of specialized Attorneys, CPAs, and CTPAs to ensure fiscal discipline.
  3. Strategic Partnerships: Collaborating with flexible, skilled associates to maintain an edge in both local and regional markets.

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Strategic Conclusion

Sustainability is no longer just about securing capital; it is about the governance of that capital. By partnering with the DDC Global Business Consulting Ecosystem Network, clients can move beyond debt dependency toward lasting, sustainable performance through professionalized financial structures and regional expertise.

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Dr. Toni Tran (Lawyer, CPA Aust., VCPA, VCPTA)

Chairman of DDC Global Business Consulting Ecosystem Network, Vietnam

Director of DD Research & Development  Department_DDRD

International private fundraising

International private fundraising

International private fundraising is a strategic method enabling enterprises to obtain cash from worldwide investors, including private equity firms, venture capitalists, and sovereign wealth funds, without being listed on a public market. By transcending domestic limitations, businesses can tap into more substantial liquidity sources and advanced capital typically inaccessible in local markets.
A key benefit is the possibility of reduced capital costs, influenced by fierce rivalry among global financiers for high-growth prospects. Moreover, collaborating with global private investors frequently provides strategic acumen and enhanced networking opportunities that promote worldwide growth.
Nevertheless, companies must traverse intricate international legislation, varied tax consequences, and stringent due diligence procedures mandated by foreign corporations. Successful fundraising necessitates the alignment of financial reporting with international standards, such as IFRS or US GAAP, to guarantee transparency. Ultimately, effective worldwide private placement diversifies the shareholder base and establishes a natural buffer against domestic economic fluctuations. By acquiring “hard currency” investments, corporations enhance their balance sheets for prospective global operations or potential public offerings.
Coming back these above goals, we arranged our precise seminar on how to define the effective international private fundraising for the Southeast Asian firms to catch up their sustainable business performances with our global expertise network included global CPA and lawyers.
Dr. Toni Tran, lawyer, CPA Aust., VCPA, VCPTA, Chairman of DDC Global Business Consulting Ecosystem Network, Vietnam.
CORPORATE GOVERNANCE IN RELATION TO CORPORATE GOVERNANCE AND FOREIGN DIRECT INVESTMENT IN THE CURRENT VIETNAMESE MARKET

CORPORATE GOVERNANCE IN RELATION TO CORPORATE GOVERNANCE AND FOREIGN DIRECT INVESTMENT IN THE CURRENT VIETNAMESE MARKET

Lombana-Coy, J., & Salcedo, N. U. (2025) showed that FDI bilateral flows depended significantly on their lagged flows and the economic growth of the reporter countries. This study showed accountability and board efficacy significantly increased FDI bilateral flows in Latin America. Investor protection only positively influenced the FDI bilateral flow if it was from the home country.
The current business landscape in the Vietnamese market reveals that most foreign direct investments (FDIs) have embraced the corporate governance models of their parent groups, establishing their presence in Vietnam for over 30 years. They have leveraged the low labor costs in the local market to optimize their group profits to date. Nevertheless, circumstances evolve, compelling foreign direct investments to recommence their incremental innovation efforts, with an emphasis on prioritizing good corporate governance frameworks in Vietnam to date. Consequently, by implementing efficient corporate governance models, businesses may reduce production costs and other expenses while addressing the diverse business cultures inside their subsidiaries, ultimately positioning themselves for sustainable success in Vietnam over the next 20 to 30 years.
Successful DFIs thrive by progressively reinventing their corporate governance structures. These enterprises maintain competitiveness by collaborating with adaptable, proficient partners in local and regional markets. Finally, DDC Global Business Consulting Ecosystem Network fosters these linkages to assist clients in attaining enduring their sustainable performance objectives.
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Dr. Toni Tran (Lawyer, CPA Aust., VCPA, VCPTA)
Chairman of DDC Global Business Consulting Ecosystem Network, Vietnam
Director of DD Research & Development Department_DDRD
AN ANALYSIS OF FRANCHISING IN VIETNAM FROM THE STANDPOINT OF CORPORATE LAW.

AN ANALYSIS OF FRANCHISING IN VIETNAM FROM THE STANDPOINT OF CORPORATE LAW.

Franchising is a commercial enterprise where the franchisor grants and mandates the franchisee to independently engage in the buying and selling of products and delivery of services, in compliance with appropriate regulatory regulations.

Vietnamese traders or foreign traders considering franchising must officially register their franchising activities with the appropriate authority in compliance with the existing legislative requirements.

 

Therefore, in actuality, franchising is a distinct commercial strategy, and the regulations governing this process also exhibit several variations. And then, when drafting a franchise contract, the management of potential risks that arise should be taken seriously and carefully considered to achieve maximum opportunity costs for the participating parties: risks of violating legal regulations on taxes due to not paying or not paying enough related taxes, business risks related to illegal multi-level sales activities, risks of contract subjects not complying with current legal regulations, risks of names not being in accordance with the legal system, risks of contract forms and regulations on franchise registration according to the law, risks of laws governing contracts not being effective for all parties, risks of contract language, etc.

 

Consulting legal basis: Legal regulations governing commercial matters in 2005; Decree 35/2006/ND-CP; Decree 120/2011/ND-CP; Decree 08/2018/ND-CP; Enterprise Law 2020; Consolidated Document No. 11/VBHN-VPQH Law of Intellectual Property 2022

 

In case that you require guidance or assistance in creating and modifying contracts of any nature, Pls kindly reach out to us for comprehensive and precise instructions. Esteemed regards.

 

 

 

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Dong Du International Accounting, Taxes & Legal Consulting Group HCMC Vietnam, A member of Asia Lawzana Network, Southeast Asia Business Consulting Network

Web: www.japanvietnam.com.vn.; https://ddbis.edu.vn; Facebook/LinkedIn: Dong Du International Accounting & Legal Consulting; https://studio.youtube.com/channel/UC1J_fsNu0vt1mZ-w5w2-Hag/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D;

In case you have needs, please contact us by email: tonitran01092020@gmail.com; Tel/zalo/Whatapps: 090 925 7602

＃setting up company atVietnam#accounting# tax# Lawconsulting #coaching # Introduction HR# Riss Assessment# Internal Control

DISCUSSING ABOUT SALES ON AMAZON FROM A BUSINESS LEGAL PERSPECTIVE.

DISCUSSING ABOUT SALES ON AMAZON FROM A BUSINESS LEGAL PERSPECTIVE.

Online sales are not a conditional business line, so you only need to register a business household or establish a company with the code 4791/code 4799 (with the code of each type of goods you trade).

 

Also according to the provisions of Clause 1, Article 55 of Decree 52/2013/ND-CP, traders and organizations must notify the Ministry of Industry and Trade about e-commerce websites for sales established by the traders and organizations themselves to promote trade, sell goods or provide their services. Individuals doing online business via social networks do not have to register their business with the Ministry of Industry and Trade. Thus, in the case of individuals or organizations doing online sales with a store and operating regularly, they must apply for a business license and set up their own website.

 

However, small-scale online business and sales in a spontaneous manner may not require business registration, website registration or licensing from state agencies. However, it is necessary to comply with food safety regulations, not to buy or sell counterfeit goods, counterfeit goods, or those that infringe on the rights of consumers. Furthermore, business people need to comply with the declaration and payment of relevant tax obligations.

 

From the above regulations, it can be seen that the above regulations only apply to direct sales (offline), the relevant law has not specifically regulated online sales, and online business via social networks is not one of the cases exempted from business registration obligations. Therefore, depending on each type of business activity and specific income level, it is possible to determine whether or not business registration is required.

 

Legal basis for consultation: Circular 40/2021/TT-BTC; Clause 1, Article 55, Decree 52/2013/ND-CP

 

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Dong Du International Accounting, Taxes & Legal Consulting Group HCMC Vietnam, A member of Asia Lawzana Network, Southeast Asia Business Consulting Network

Web: www.japanvietnam.com.vn.; https://ddbis.edu.vn; Facebook/LinkedIn: Dong Du International Accounting & Legal Consulting; https://studio.youtube.com/channel/UC1J_fsNu0vt1mZ-w5w2-Hag/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D;

In case you have needs, please contact us by email: tonitran01092020@gmail.com; Tel/zalo/Whatapps: 090 925 7602

＃setting up company atVietnam#accounting# tax# Lawconsulting #coaching # Introduction HR# Riss Assessment# Internal Control