Legal Due Diligence Checklist for Acquiring a Manufacturing Company in Vietnam: 120 Items

Acquiring an operating manufacturer — factories, machinery, hundreds of workers, land, environmental licences — is the M&A deal type with the largest risk surface. A complete legal due diligence checklist is the only way for the buyer to be sure nothing is missed before funds move.

This legal due diligence checklist manufacturing company Vietnam contains 120 items in 12 groups, designed for buy-side counsel running legal DD and for buyer management monitoring progress. Every item explains what to check, why it matters and the legal basis — not a dry list.

1. Who this checklist is for and how to use it
2. The 120-item checklist
3. Common mistakes when using this checklist
4. After completing the checklist
5. Frequently asked questions

1. Who this checklist is for and how to use it

Who: buy-side lawyers running legal DD; buyer management/in-house counsel monitoring; foreign investors wanting to understand the work scope before engaging counsel.

When: from NDA signing and data-room receipt through DD report drafting; each item is ticked only after document review and reasonable independent verification.

Marking: ☐ not checked · ☑ done, no issue · ⚠ finding, needs deeper review (note red vs yellow flag).

Principle: this checklist itemises the legal DD methodology for acquiring a company (see legal due diligence in M&A transactions) for manufacturers. It does not replace counsel's DD report.

2. The 120-item checklist

Group 1: Corporate, ownership and governance (items 1–10)

This group establishes the target's legal standing: does the company validly exist, who really owns it, who can sell. Any defect here can void the entire deal.

1. Enterprise Registration Certificate (ERC) and amendments ☐

Action: obtain the current ERC plus all amendment dossiers (capital changes, address, legal representative, business lines).
Why it matters: the ERC is the company's legal "birth certificate"; registered contents must match actual operations. Unregistered changes mean operating outside registration — punishable (Law on Enterprises 2020).

2. Current charter ☐

Action: obtain the latest signed charter; check alignment with the (2025-amended) Law on Enterprises on shareholder rights and governance.
Why it matters: many companies still use old model charters missing beneficial-owner provisions — must be updated post-closing.

3. Shareholder/member registers ☐

Action: shareholder list, ownership ratios, 5-year transfer history.
Why it matters: confirms the seller actually owns what it sells; past unregistered transfers mean disputable shareholder standing.

4. Legal representative ☐

Action: identify the current legal representative; any recent changes; authority of the signatory to the purchase agreement.
Why it matters: contracts signed by an unauthorised person do not bind the company — except in the cases Article 142 of the 2015 Civil Code allows: the company ratifies the transaction; the company knew but failed to object within a reasonable time; or the company was at fault in causing the counterparty not to know (or to be unable to know) that the signatory lacked authority. Check now, not later.

5. Beneficial owners ☐

Action: check beneficial-owner declarations under the amended Law on Enterprises (effective 1 July 2025).
Why it matters: new requirement; missing or wrong declarations are a compliance backlog the buyer inherits.

6. Seller's corporate approvals for the deal ☐

Action: GMS/BOMC/BOD resolutions approving the transfer; verify voting thresholds under the charter and the Law on Enterprises.
Why it matters: without valid resolutions, the seller could later claim the deal void.

7. Audited financial statements (3 years) ☐

Action: independent audit reports; check whether the opinion is unqualified.
Why it matters: from a legal angle — whatever the auditors flag on tax, payables or secured assets, legal DD must dig into.

8. Company seal and digital signatures ☐

Action: current seal specimen; digital signatures and bank accounts — in whose name.
Why it matters: everything must change hands post-closing; plan the handover to avoid operational disruption.

9. Branches, representative offices, business locations ☐

Action: full list of dependent units; registration status of each.
Why it matters: unregistered operating units mean administrative penalties.

10. Administrative penalties on corporate governance ☐

Action: penalties on enterprise registration and disclosure over 3 years.
Why it matters: reveals the old management's "compliance culture" — a predictor of risk in other areas.

Group 2: Investment licences and market access (items 11–20)

For foreign-invested targets or foreign buyers, this group decides whether the deal may proceed at all.

11. Investment Registration Certificate (IRC) ☐

Action: is the IRC still valid; do the recorded objectives, scale, location and schedule match reality.
Why it matters: operating outside the IRC is a violation; the buyer must amend post-closing — costly and punishable (Law on Investment 2025).

12. IRC amendments ☐

Action: all amendment dossiers; any actual changes never put through amendment procedures.
Why it matters: "amendment debt" is common; the buyer needs it as conditions precedent.

13. Market-access conditions of the acquisition itself ☐

Action: are the target's sectors restricted for foreign investors (check the new list under the 2025 Law on Investment, fully applicable from 1 July 2026).
Why it matters: restricted sectors may require M&A approval — directly affecting the closing timeline.

14. Capital contribution / share acquisition registration ☐

Action: does the deal require registration with the investment registration authority; prepare the dossier early.
Why it matters: mandatory for many foreign-element deals; without it the transfer is legally incomplete.

15. Investment incentives enjoyed ☐

Action: incentive decisions (CIT exemption/reduction, land-rental exemption); conditions and remaining period.
Why it matters: a change of ownership can affect eligibility — valuation must model both scenarios.

16. Investment project implementation reports ☐

Action: periodic reports filed with the investment registration authority.
Why it matters: missing reports are pending violations, easily surfaced when amending the IRC post-closing.

17. Project performance deposit ☐

Action: has the deposit obligation been fulfilled; current balance.
Why it matters: an underpaid deposit is a financial obligation the buyer inherits.

18. Committed project schedule ☐

Action: actual progress vs. IRC commitments; any warnings or penalties for delay.
Why it matters: prolonged delay can lead to IRC revocation — a serious red flag.

19. Registered vs. actual business lines ☐

Action: reconcile ERC business codes with actual factory operations.
Why it matters: manufacturing outside registered lines is a violation; watch conditional sectors.

20. Outbound investment licences (if any) ☐

Action: does the target hold outbound projects; certificate status.
Why it matters: reporting and foreign-exchange obligations transfer to the buyer.

Group 3: Land, factories and construction (items 21–32)

The highest red-flag density in manufacturing deals. Every item needs independent verification with natural-resources agencies — not just the seller's papers.

21. Land use right / house ownership certificates ☐

Action: copies of certificates; reconcile with land-registry records.
Why it matters: the certificate is the highest legal evidence of land rights; every land deal starts here (Land Law 2024).

22. Land use purpose ☐

Action: recorded purpose (non-agricultural production land?); actual use consistent.
Why it matters: wrong-purpose use is a violation punishable by fines and restoration orders — a direct risk for operating factories.

23. Remaining land term ☐

Action: term on the certificate; years remaining; renewal conditions.
Why it matters: 10 years left vs. 40 on a 50-year lease changes valuation and long-term investment plans entirely.

24. Land financial obligations ☐

Action: land use fees / rentals fully paid; no arrears (tax authority confirmation).
Why it matters: rental arrears transfer to the buyer; the State can enforce collection.

25. Mortgages, distraints, land disputes ☐

Action: search secured transactions; check encumbrance records at the land registry.
Why it matters: undisclosed bank mortgages are the classic red flag; the buyer could lose land rights.

26. Industrial-park sublease contracts ☐

Action: sublease with the park infrastructure developer; term, rent, termination and assignment clauses.
Why it matters: many factories hold no separate certificate and sublease park land — the buyer's rights rest entirely on this contract.

27. Assignment / change-of-control in the land sublease ☐

Action: can the park developer terminate or require consent on a change of ownership.
Why it matters: losing the site means losing the factory; renegotiate before closing.

28. Factory construction permits ☐

Action: permits for each structure; any unpermitted or off-permit construction.
Why it matters: violating structures can be ordered demolished — direct asset loss.

29. Completion and fire-safety acceptance ☐

Action: completion records; fire-safety acceptance documents from the police.
Why it matters: factories without fire acceptance may not operate — a shutdown-level red flag.

30. Planning conformity ☐

Action: site conformity with land-use and construction planning (competent authority confirmation).
Why it matters: land in suspended or transport planning faces future recovery risk.

31. Third-party assets on the land ☐

Action: any third-party assets on site (subleased workshops, power stations).
Why it matters: boundary and shared-use disputes seed long-running litigation.

32. Compensation obligations on land recovery (if any project) ☐

Action: any recovery decisions or compensation plans affecting the site.
Why it matters: directly affects asset value and continued production.

Group 4: Operating licences and sectoral compliance (items 33–42)

Manufacturers carry a "forest" of sub-licences. Goal: no licence expires unnoticed.

33. Complete licence inventory ☐

Action: list every licence and certificate (conditional sectors, quality standards, import-export).
Why it matters: inability to produce a full list means weak licence governance — gaps are certain.

34. Validity of each licence ☐

Action: expiry dates; which licences expire within 12 months.
Why it matters: operating on an expired licence means violations and possible suspension.

35. Conditions to maintain licences ☐

Action: are original licensing conditions still met (certified personnel, facilities).
Why it matters: under post-inspection (2025 Law on Investment), regulators check afterwards — breaches mean licence revocation.

36. Sectoral production eligibility certificates ☐

Action: for special sectors (food, pharma, chemicals): GMP, HACCP, ISO and mandatory certifications.
Why it matters: losing certification means losing the right to make core products.

37. Machinery import licences ☐

Action: imported machinery — prohibited/restricted categories; import dossiers in order.
Why it matters: smuggled or mis-declared machinery can be confiscated.

38. Barcode registration, product standard announcements ☐

Action: products' standard announcements and barcode registrations complete.
Why it matters: unannounced goods in circulation mean violations and product recalls.

39. Work permits for foreigners ☐

Action: every foreign expert holds a valid work permit.
Why it matters: illegal foreign employment penalises both company and individual.

40. Sectoral administrative-penalty history ☐

Action: penalty decisions over 3 years in production and business.
Why it matters: unpaid fines plus recidivism risk mean financial obligations and suspension exposure.

41. Applying the new sectoral list (2025 Law on Investment) ☐

Action: map the company's sectors against the new list (fully applicable from 1 July 2026): which are "untied", which still need licences.
Why it matters: many old sub-licences may lapse — but duties to meet conditions and announce remain.

42. Post-inspection compliance for business conditions ☐

Action: for sectors moved to post-inspection: does the company run self-assessments with supporting records.
Why it matters: post-inspection is still inspection — surprise checks finding breaches draw heavy penalties.

Group 5: Material contracts (items 43–52)

Contracts hide "change of ownership" risk: many let counterparties terminate on a change of control.

43. Material contract list ☐

Action: list high-value, long-term or operationally critical contracts (top 20–30).
Why it matters: thousands of contracts cannot all be reviewed — focus on those deciding the company's survival.

44. Change-of-control clauses ☐

Action: does each material contract let the counterparty terminate or renegotiate on a change of ownership.
Why it matters: a direct risk of the acquisition itself — late discovery means losing customers or supply after closing.

45. Factory and warehouse leases ☐

Action: remaining term, rent, escalation, renewal priority, termination.
Why it matters: site costs hit profit directly; losing the lease means relocating the factory.

46. Long-term raw-material supply contracts ☐

Action: price, committed volumes, breach penalties, term.
Why it matters: onerous contracts (above-market prices, rigid volume commitments) burden post-closing costs.

47. Exclusive distribution / agency agreements ☐

Action: exclusivity scope, sales commitments, termination, distributor rights on a change of ownership.
Why it matters: distribution channels are often a manufacturer's most valuable intangible asset.

48. Loans and guarantees ☐

Action: outstanding debt, interest, collateral, covenants, lender rights on ownership change.
Why it matters: lenders may accelerate repayment on a change of control — reshaping post-closing finances.

49. Major customer contracts ☐

Action: top 5–10 customers: payment terms, warranties, penalties, duration.
Why it matters: losing one major customer post-closing can collapse the business plan.

50. Insurance contracts ☐

Action: property, liability and cargo insurance — coverage and duration.
Why it matters: uninsured factories mean unmitigated asset risk.

51. Long-term consultancy and service contracts ☐

Action: active service contracts; early-termination terms and penalties.
Why it matters: many auto-renew at high fees — candidates for post-closing cuts.

52. Contract disputes ☐

Action: contracts under dispute, claims or compensation demands.
Why it matters: contract disputes mean contingent liabilities plus counterparty-loss risk.

Group 6: Employment and social insurance (items 53–64)

For manufacturers with hundreds of workers, latent labour liabilities can reach billions of dong — never skim this group.

53. Headcount and contract types ☐

Action: total employees, contract breakdown (definite/indefinite term), seasonal labour.
Why it matters: contract mix determines severance obligations in post-closing restructuring (Labour Code 2019).

54. Salary scales and payroll regulations ☐

Action: salary scales and payroll regulations established and communicated to employees as required (note: the old duty to register salary scales with the authorities was abolished under the 2019 Labour Code — do not look for a 'registered' system); any wage arrears.
Why it matters: wage arrears are grave violations; workers may strike — an operational risk right after closing.

55. Social, health and unemployment insurance contributions ☐

Action: reconcile headcount with insurance rolls; no-arrears confirmation from the insurance agency.
Why it matters: insurance arrears are the most common labour red flag; arrears are the target company's obligations — in a share/capital-contribution deal the buyer takes the company with these obligations (including late-payment penalties); assess according to the specific deal structure (share deal vs. asset deal).

56. Internal labour rules, collective agreements ☐

Action: rules registered; collective agreement still valid.
Why it matters: disciplinary decisions without registered rules are void — the company loses labour lawsuits.

57. Pending labour disputes ☐

Action: labour lawsuits in progress; union or collective complaints.
Why it matters: collective disputes can escalate into strikes — assess before buying.

58. Severance and job-loss allowances ☐

Action: compute obligations for pre-2009 employees (no unemployment insurance participation) and special cases.
Why it matters: a "dormant" liability — triggered on termination, potentially huge.

59. Occupational safety and health ☐

Action: safety plans; OSH training; protective equipment; accident reports.
Why it matters: serious accidents can raise criminal liability plus large compensation.

60. Trade union and union fees ☐

Action: union organisation; 2% union fee (2% of the salary fund used as the compulsory social-insurance contribution base, per point b clause 1 Article 29 of the 2024 Law on Trade Unions) fully remitted.
Why it matters: fee arrears are pending financial obligations; union relations affect production stability.

61. Foreign employees (detailed) ☐

Action: each expert: work permit, visa, residence validity; whether the position is permit-exempt.
Why it matters: illegal foreign employment draws heavy penalties and reputational harm.

62. Training policies and commitments ☐

Action: vocational training contracts with service commitments; reimbursable training costs.
Why it matters: reimbursement rights are assets; unfinished training duties are costs.

63. Post-closing workforce restructuring plan ☐

Action: planned cuts/changes; estimated allowance costs and labour-utilisation-plan procedures.
Why it matters: mass layoffs done wrong mean collective disputes; costs belong in the purchase price.

64. Working hours and overtime compliance ☐

Action: actual hours, overtime within statutory caps; overtime paid correctly.
Why it matters: hours violations are rampant in manufacturing; discovery means penalties plus back pay.

Group 7: Tax and finance (items 65–76)

Coordinate closely with auditors on specialist tax due diligence. The legal angle: established obligations, reassessment exposure, and whether incentives survive.

65. Tax registration and applicable taxes ☐

Action: tax code, taxes to declare (CIT, VAT, PIT, contractor tax).
Why it matters: the "map" of tax obligations — foundation for everything after (Law on Tax Administration 2025).

66. Returns and payments (3–5 years) ☐

Action: returns filed completely and on time; paid amounts reconcile with books.
Why it matters: wrong or late filings accumulate penalties and late-payment interest over time.

67. Tax inspection conclusions ☐

Action: recent inspections; conclusions and assessed tax/penalties paid or outstanding.
Why it matters: unexecuted conclusions are existing financial obligations of the buyer.

68. Tax debts, fines, late-payment interest ☐

Action: official tax-debt status confirmation at DD time.
Why it matters: the debt figure deducts directly from price — get official confirmation, not the seller's word.

69. CIT incentives enjoyed ☐

Action: incentive decisions (exemption/reduction); conditions (capital, labour, location, sector); remaining period.
Why it matters: ownership change can end eligibility — valuation must model both scenarios.

70. Related-party transactions and transfer pricing ☐

Action: related-party dealings; transfer-pricing documentation prepared.
Why it matters: no TP documentation means huge reassessment risk on inspection.

71. Contractor tax (if foreign dealings) ☐

Action: foreign-contractor contracts — withholding done and paid.
Why it matters: withholding duty sits with the Vietnamese party — years of gaps accumulate.

72. E-invoices and invoice compliance ☐

Action: e-invoices used per regulations; no illegal invoices.
Why it matters: illegal invoices can raise criminal liability — a grave red flag.

73. Loans and financial obligations ☐

Action: all bank/personal loans and bonds; repayment schedules.
Why it matters: payables deduct directly in valuation; check acceleration on change of control.

74. Guarantees for third parties ☐

Action: guarantees for other companies or individuals.
Why it matters: guarantees are contingent liabilities — if the guaranteed party defaults, the target pays.

75. Doubtful receivables ☐

Action: ageing of major receivables; provisions made; collectability.
Why it matters: legally — long-overdue receivables with no recovery action are "dead" assets on the books.

76. Tax enforcement exposure ☐

Action: any unexecuted enforcement decisions (account freezing, asset seizure).
Why it matters: frozen accounts mean the company cannot operate — check before money moves.

Group 8: Disputes and pending legal obligations (items 77–84)

77. Pending litigation (courts, arbitration) ☐

Action: all cases as claimant/defendant; procedural stage; dispute value.
Why it matters: estimate loss probability and payout — feed into price adjustments or indemnities.

78. Unexecuted judgments ☐

Action: effective judgments/decisions not yet enforced (owed and owing).
Why it matters: enforcement obligations are existing legal debts, enforceable at any time.

79. Administrative complaints and denunciations ☐

Action: complaints/denunciations under resolution involving the company.
Why it matters: can escalate into full inspections or administrative lawsuits.

80. Demand letters and legal warnings ☐

Action: dunning and litigation threats in the last 12 months.
Why it matters: "pre-lawsuit disputes" — provision early.

81. Internal shareholder/member disputes ☐

Action: conflicts among existing shareholders; shareholder agreements restricting transfer.
Why it matters: minority pre-emption or veto rights can block the deal.

82. Bankruptcy risk of target or major counterparties ☐

Action: insolvency signs; any petitions for recovery/bankruptcy proceedings (Law on Recovery and Bankruptcy 2025, effective 1 March 2026).
Why it matters: buying a near-insolvent company means taking on all of the target company's debts (debts stay with the company under the limited-liability principle) — this needs special deal structuring (conditions precedent, indemnity mechanics, or an asset deal instead of a share deal).

83. Outstanding product warranties ☐

Action: warranty policies; estimated warranty cost for sold batches.
Why it matters: for manufacturers, warranty obligations are "technical debt" transferring to the buyer.

84. Unfulfilled commitments to state agencies ☐

Action: remediation commitments, investment pledges to regulators.
Why it matters: unfulfilled commitments are suspended administrative "sentences", actionable at any time.

Group 9: Intellectual property and technology (items 85–92)

85. Core trademarks — in whose name ☐

Action: protection titles; owner recorded — company or individual.
Why it matters: trademarks in the founder's personal name mean "renting" the brand after buying the company — a valuation red flag.

86. Patents, industrial designs, copyrights ☐

Action: full IP inventory; title validity; maintenance fees paid.
Why it matters: lapsed titles from unpaid fees mean lost technology exclusivity.

87. Technology transfer and licence agreements ☐

Action: whose technology the company uses; licences permitting continued use after ownership change.
Why it matters: losing core technology rights stalls production lines.

88. IP disputes ☐

Action: accused of infringement; suing others for infringement.
Why it matters: losing an infringement case means damages plus production bans.

89. Trade secrets and information protection ☐

Action: confidentiality regulations; NDAs with key personnel and partners.
Why it matters: unprotected formulas and processes "evaporate" when staff leave.

90. Software and management systems ☐

Action: ERP/accounting software licences; system maintenance contracts.
Why it matters: unlicensed software means legal risk plus disruption if locked.

91. Domain names and digital accounts ☐

Action: website domains and social accounts — in whose name; admin rights.
Why it matters: digital assets in personal names are hard to recover post-closing.

92. Technology-transfer commitments to authorities ☐

Action: IRC or approval documents with technology-transfer clauses; fulfilled.
Why it matters: unfulfilled commitments are pending obligations to regulators.

Group 10: Environment, fire safety and safety (items 93–104)

For manufacturers, environmental breaches can suspend operations — this group is existential.

93. Environmental licence ☐

Action: licence valid; contents match actual production scale.
Why it matters: over-capacity production is a violation; no licence means illegal operation (Law on Environmental Protection 2020).

94. Environmental impact assessment (EIA) ☐

Action: EIA approval decision; EIA requirements implemented.
Why it matters: the EIA underpins the environmental licence; non-implementation grounds revocation.

95. Wastewater, emission and solid-waste treatment systems ☐

Action: systems actually operating (not just on paper); periodic monitoring results.
Why it matters: over-standard monitoring means penalties plus remediation orders; recidivism means suspension.

96. Hazardous waste ☐

Action: waste-source registration; hazardous-waste treatment contracts with licensed handlers.
Why it matters: mishandled hazardous waste draws very heavy penalties, potentially criminal.

97. Unpaid environmental fines ☐

Action: environmental penalty decisions; fines paid and remediated.
Why it matters: financial obligations plus an environmental "record" affecting reputation and surprise-inspection risk.

98. Fire-safety acceptance ☐

Action: fire acceptance documents for each workshop and warehouse.
Why it matters: no fire acceptance means no operation — a factory-closing red flag.

99. Periodic fire inspections and firefighting plans ☐

Action: latest inspection records; approved firefighting plans; in-house fire force.
Why it matters: fire breaches in manufacturing risk explosions plus criminal liability when incidents occur.

100. Safety inspection of strictly-regulated machinery ☐

Action: safety certification of boilers, cranes, pressure vessels; certificates valid.
Why it matters: uncertified equipment is banned from use; incidents mean criminal liability.

101. Hazardous-chemical warehouses ☐

Action: warehouse licences and conditions; chemical-incident response plans.
Why it matters: the highest safety-risk area — small breaches can cause major consequences.

102. Environmental / fire liability insurance ☐

Action: environmental and fire-risk insurance in place.
Why it matters: uninsured means every incident loss falls on the buyer.

103. Surrounding community complaints ☐

Action: pollution and noise complaints; resolution outcomes.
Why it matters: community conflict risks inspections, press exposure and operational disruption.

104. Relocation / upgrade orders from authorities ☐

Action: any orders to relocate polluting facilities or upgrade treatment systems.
Why it matters: factory relocation costs can exceed deal value — know before buying.

Group 11: Machinery, equipment and assets (items 105–112)

105. Key machinery inventory ☐

Action: fixed-asset list; reconcile books with physical factory count.
Why it matters: "ghost" assets signal fraud — physical inventory is mandatory.

106. Machinery ownership ☐

Action: invoices and purchase contracts; which machines are under finance or operating leases.
Why it matters: finance-leased machines not fully paid are not company-owned; valuation must exclude them.

107. Machinery mortgages ☐

Action: search secured transactions on movables.
Why it matters: mortgaged machinery limits the buyer's disposal rights.

108. Age and operating condition ☐

Action: manufacture year, maintenance and overhaul history; independent technical assessment.
Why it matters: fully depreciated lines nearing replacement mean major post-closing capex.

109. Inventory ☐

Action: physical stocktake; reconcile with books; assess obsolete stock.
Why it matters: "phantom" inventory flatters the balance sheet — physical counts protect the buyer.

110. Vehicles ☐

Action: vehicle registrations and inspections; company- vs. personally-titled.
Why it matters: vehicles titled to individual managers mean post-closing ownership disputes.

111. Other intangibles ☐

Action: exploitation rights, mining licences if any; other property rights.
Why it matters: ensures no valuable off-book assets are missed.

112. Asset insurance ☐

Action: insurance on factories, machinery and goods; coverage adequate.
Why it matters: billion-dong assets uninsured are a disaster risk for the buyer if incidents occur.

Group 12: Compliance, competition and related parties (items 113–120)

113. General compliance history ☐

Action: all administrative penalties over 3 years; assess "compliance culture".
Why it matters: the full picture — frequently penalised areas harbour systemic risk.

114. Economic concentration notification ☐

Action: does the deal require notification under the 2018 Competition Law (check current thresholds on assets, turnover, deal value).
Why it matters: a notifiable-but-unnotified deal risks penalties and remediation (competition review).

115. Anti-competitive conduct of the target ☐

Action: price-fixing or market-sharing agreements; abuse of dominance.
Why it matters: competition breaches draw very large fines (as % of turnover) plus civil liability.

116. Related-party transactions ☐

Action: contracts with shareholders' companies or managers' relatives; arm's-length pricing.
Why it matters: off-market insider pricing means tunnelling; cut or reprice post-closing.

117. AML and anti-corruption compliance ☐

Action: internal policies; large or unusual cash transactions; gifts and "relationship" expenses.
Why it matters: for foreign investors under home-country anti-bribery laws, non-negotiable.

118. Personal data of employees and customers ☐

Action: how personal data is collected and stored; compliance with the Law on Personal Data Protection 2025 (91/2025/QH15, effective 1 January 2026).
Why it matters: the new law is in force — breaches draw penalties; HR and CRM systems need review.

119. Disclosure obligations ☐

Action: disclosures made per regulations (National Portal; plus SSC for public companies).
Why it matters: disclosure backlogs are pending violations, easily surfaced on post-closing registration changes.

120. Post-closing compliance integration plan (first 100 days) ☐

Action: prioritised remediation list: week-one actions (change legal representative, seals, bank accounts), 100-day actions (update charter, licences, compliance systems).
Why it matters: a checklist only matters when converted into action — this final item turns the 119 above into an execution plan.

3. Common mistakes when using this checklist

1. Ticking "done" after only reading seller documents. No independent verification with registries, tax authorities or land offices — the checklist becomes theatre. Rule: seller documents plus independent sources before ticking.

2. Dismissing "irrelevant" items subjectively. "A small company surely has no related-party deals" — then discovering the director leases the factory from his own wife at double market rent. Every item must be checked and marked "not applicable" with basis.

3. Running the checklist after price is agreed. Once price is fixed, red-flag findings are only good for regret. The checklist must run alongside negotiation, feeding directly into price adjustments.

4. Not grading findings. 120 items all with "minor issues" but none graded red/yellow → leadership cannot find the stop points. Every finding needs a grade and impact estimate.

5. Letting the checklist "die" after the report. Yellow-flag items never become a post-closing remediation plan — six months later, the very issues found come back to cause damage.

4. After completing the checklist

Next steps:

Consolidate findings into a DD report: grade red/yellow flags, estimate financial impact per material item.
Feed results into negotiation: price adjustments, conditions precedent, representations and warranties, indemnity mechanics in the purchase agreement.
Build the 100-day post-closing plan from item 120.

When counsel review is MANDATORY: any red flag in land (21–32), environment (93–104) or tax (65–76); foreign-element deals needing M&A approval; deals above economic-concentration notification thresholds. Contact FLAT — hotline 0988424851 for specialist review.

5. Frequently asked questions

How does a legal DD checklist for a manufacturer differ from a trading company?

Manufacturers carry extra risk areas: land and factories (mortgages, land purpose, remaining industrial-park lease terms), environmental licences and EIA, fire safety, occupational safety, machinery, and labour obligations for large workforces. This 120-item checklist covers all of them.

Who should use this 120-item checklist?

Buy-side counsel running legal DD, buyer management monitoring progress, and foreign investors wanting to understand the work scope before engaging lawyers. The checklist does not replace counsel's DD report — each item needs document review plus independent verification.

How long does it take to complete this checklist?

For a mid-sized manufacturer, a 2–3 lawyer team typically needs 3–6 weeks with a cooperative seller. Land, environment and tax items take longest because they require verification with state agencies.

Which items are the most common red flags?

In practice: mortgaged land, incomplete environmental licences/EIA, social insurance arrears, and change-of-control clauses in factory leases or distribution agreements. Any issue in these four groups needs assessment before price negotiation.

Can this checklist be used for a services company?

The 12-group framework still works, but drop manufacturing-specific items (groups 3, 10, 11) and add sector specifics (e.g. specialist sub-licences, personal data). Contact FLAT to tailor the checklist by industry — hotline 0988424851.

References

Law on Enterprises No. 59/2020/QH14 (amended by Law No. 76/2025/QH15)
Law on Investment No. 143/2025/QH15
Land Law No. 31/2024/QH15
Law on Environmental Protection No. 72/2020/QH14
Labour Code No. 45/2019/QH14
Law on Tax Administration No. 108/2025/QH15
Law on Recovery and Bankruptcy No. 142/2025/QH15