Scenario: a Japanese investor setting up a manufacturing company in Bac Ninh receives two quotes: Firm A offers an all-inclusive package of VND 60 million for the full IRC + ERC process; Firm B quotes VND 4 million per hour with an estimated 15–25 hours. Which is cheaper — and which is safer? The answer depends less on the headline number than on how each fee model allocates the risk of the dossier getting complicated.
The legal framework: fees are whatever the parties agree — with two red lines
Under Vietnam’s Law on Lawyers (consolidated text 2015), a lawyer’s remuneration is agreed between the client and the law-practicing organization and recorded in the legal service contract. Article 55 of the consolidated text lists the bases for calculating fees: the content and nature of the work, the time and effort required, and the lawyer’s experience and reputation. Article 56 covers expenses (travel, accommodation and other service costs), also by agreement. Two red lines matter for FDI clients. First, the famous cap — no more than 0.3 times the state base salary per working hour — applies only to lawyers defending clients in criminal cases; it does not apply to FDI formation advisory, where there is no statutory price ceiling at all. Second, lawyers are strictly prohibited from agreeing fees on the basis of a guaranteed outcome (“we guarantee your IRC will be granted”) and from demanding any money beyond what the contract stipulates — both are professional-ethics violations. A 2026 draft amendment to the Law on Lawyers proposes to codify the fee methods explicitly (hourly, fixed package, percentage of case value, standing retainer) and to require fees to be denominated in money, not paid in the assets under dispute.
Fixed package: price certainty, scope risk
A fixed package quotes one price for a defined scope — typically “IRC + ERC + seal + initial tax registration” for a standard project. The advantage is budget certainty: the investor knows the total legal cost upfront, and the firm absorbs the risk if the dossier needs three supplementation rounds instead of one. The danger is scope: packages almost never include state fees, translation, notarization, consular legalization, or sub-licenses, and they assume a “standard” project. If the project turns out to need investment policy approval, an environmental sub-license, or a conditional business line, the firm will issue a change order — and the “package” ends up costing more than an hourly engagement would have. Fixed packages suit investors best when the project is genuinely standard: 100% foreign-owned, no conditional sectors, leased premises in an industrial park with the park’s standard documents.
Hourly: flexibility, meter risk
Hourly billing charges for actual time spent, usually tiered by seniority (associate, senior associate, partner). The advantage is flexibility: the investor pays only for work actually done, and the scope can expand naturally if the project grows teeth — policy approval, land issues, technology transfer explanations — without renegotiating. The risk is the meter: without controls, hours can inflate, especially where the investor cannot verify whether “researching regulations” took two hours or six. Hourly suits complex or uncertain projects: conditional business lines, projects requiring investment policy approval, or investors who want the lawyer involved beyond formation (drafting JV terms, negotiating leases). The essential controls are an hour cap per phase, a monthly timesheet with task descriptions, and a contractual milestone at which the parties reassess the estimate.
Hybrid and retainer models: the middle path
In practice, many FDI engagements blend the two: a fixed package for the predictable core (IRC + ERC filing) plus hourly rates for defined extras (policy approval, sub-licenses, negotiations). A monthly retainer — a fixed fee for a basket of advisory hours — suits investors setting up multiple entities or with ongoing compliance needs in year one. A percentage-of-value model, floated in the draft Law on Lawyers amendment, is rarely used for formation work because the “value” of a formation is hard to define. Whichever model is chosen, the contract should state: the exact scope in writing, what counts as out-of-scope, the hourly tiers and who does the work, the expense policy (translation and travel are usually at cost), payment milestones tied to deliverables (not to “results”), and a termination clause with handover of the dossier.
A negotiation checklist before signing
First, demand the scope in writing with a list of named deliverables (IRC, ERC, seal, tax code, capital account support) and an explicit out-of-scope list. Second, ask who actually does the work — a partner’s name on the proposal means little if a junior handles the filing. Third, for hourly engagements, fix an hour cap and a reassessment milestone; for packages, fix the change-order procedure and unit prices for extras. Fourth, separate disbursements (state fees, translation, notarization, legalization) from professional fees so the two can be benchmarked independently. Fifth, tie payments to milestones (dossier filed, IRC granted, ERC granted), never to a guaranteed outcome. Indicative market references (unverified, for orientation only): public quotes from law firms for a standard IRC + ERC package commonly fall in the tens of millions of dong; hourly rates vary widely by seniority. Treat any number without a written scope as meaningless.
Frequently asked questions
A lawyer promises “100% guaranteed IRC approval” — should I believe it?
No. Lawyers are prohibited from basing fees on a guaranteed outcome, and no lawyer controls the licensing authority’s decision. A “guarantee” is either an ethics violation or marketing language for “we will keep supplementing the dossier until it passes” — in which case ask what happens to the fee if supplementation rounds multiply.
Does a fixed package include state fees and translation?
Usually not. Packages typically cover professional fees only; state fees (business registration, publication), translation, notarization and consular legalization are billed as disbursements at cost or excluded entirely. Read the scope clause: if disbursements are “included,” check whether they are capped.
How do I control costs on an hourly engagement?
Three controls: a contractual hour cap per phase, monthly timesheets describing what was done (not just “legal research — 4 hours”), and a milestone at which both sides reassess the estimate before more hours accrue. Also agree in writing which seniority level handles which task, so partner rates are not charged for routine filings.
Can I switch from hourly to fixed mid-engagement?
Yes, if both sides agree — fee arrangements can be amended by a contract addendum. The natural switching point is when uncertainty resolves: for example, once the IRC is granted and the remaining work (ERC, seal, tax) is routine, converting the tail of the engagement to a fixed fee is common and sensible.
Related articles
- Company Charter: 10 Clauses Foreign Investors Often Omit
- Location Confirmation Letter from the Industrial Park Management Board
- Technology Explanation: When Required and What to Write?
- Investment Project Proposal: Writing Objectives, Scale and Schedule
- Land/Factory Lease Contracts: Mandatory Clauses for the IRC Dossier
This legal analysis has been verified against current Vietnamese regulations and cross-border FDI transaction practices by the attorneys at FLAT LAW FIRM.
