FAQ: Can You Sue a Foreign Parent Company in Vietnam?

When a joint project goes wrong, many Vietnamese businesses want to sue the "ultimate owner" — the parent company headquartered abroad — rather than only the local subsidiary. In practice this raises three groups of questions: can you sue, which court hears it, and can you collect after winning. This article answers the 10 questions FLAT's clients ask most, for businesses, investors, and in-house counsel preparing foreign-element dispute strategies.

Table of contents

1. Can a foreign parent company be sued in a Vietnamese court?
2. How does suing a foreign parent differ from suing the Vietnamese subsidiary?
3. When is a parent company liable for its subsidiary?
4. Which Vietnamese court has first-instance jurisdiction over a foreign parent?
5. How is the claim served abroad on the parent company?
6. No assets in Vietnam — can a judgment still be enforced?
7. Can international arbitration be chosen instead of court?
8. What are the limitation periods for disputes with a foreign parent?
9. Can a foreign judgment be brought back to Vietnam for recognition?
10. Contract signed with the Vietnamese subsidiary — can the parent be sued directly?

<a id="q-1"></a>1. Can a foreign parent company be sued in a Vietnamese court?

Short answer: Yes — if the case falls within Vietnamese court jurisdiction under Article 469 of the 2015 Civil Procedure Code. A parent headquartered abroad is not an automatic ground for a Vietnamese court to refuse the case.

Explanation: Vietnamese law determines jurisdiction by the case's "connection" to Vietnamese territory, not by the defendant's nationality. A foreign parent is a "foreign organization" and the suit is automatically a civil case with foreign elements (Article 464(2) of the 2015 Civil Procedure Code). Vietnamese courts have general jurisdiction where the defendant is an organization with a branch or representative office in Vietnam for matters relating to that branch's activities; where the civil relationship was established, changed, or terminated in Vietnam; or where the relationship concerns rights and obligations of organizations or individuals based in Vietnam (Article 469(1)). But note Article 472: courts must return the petition or suspend where the parties agreed to a foreign court or arbitration.

Basis: Articles 464, 469, and 472 of the 2015 Civil Procedure Code (92/2015/QH13, in force since 1 July 2016).

Next step: Before filing, list every connection of the dispute to Vietnam (place of signing, performance, payment, assets in Vietnam) and review the contract for forum or arbitration clauses — these two "gates" decide whether your petition is accepted.

<a id="q-2"></a>2. How does suing a foreign parent differ from suing the Vietnamese subsidiary?

Short answer: Fundamentally different in three ways: independent defendant status, service procedure, and enforceability. Suing the domestic subsidiary is far simpler, faster, and cheaper.

Explanation: Parent and subsidiary are two independent legal persons — contracts, transactions, and other relations between them must be established and performed independently and equally, as with other independent legal subjects (Article 196(2) of the 2020 Enterprise Law). In other words, the parent does not "automatically" answer for the subsidiary's debts merely through ownership. Suing a foreign parent makes the case a foreign-element proceeding: judicial documents must be served abroad (often taking many months), first instance is heard at the Regional People's Court, and after winning you still face enforcement against assets abroad. By contrast, suing the Vietnamese subsidiary is heard at the Regional People's Court (no foreign elements), served domestically, and enforced domestically.

Basis: Articles 195 and 196 of the 2020 Enterprise Law (59/2020/QH14, in force since 1 January 2021); Articles 35 and 37 (as amended by Law 85/2025/QH15, effective 1 July 2025), Article 39 of the 2015 Civil Procedure Code.

Next step: Assess a "parallel suit" strategy: sue the subsidiary in Vietnam for a judgment you can enforce quickly, while considering suing the parent abroad if the parent is the real paymaster. Counsel should analyze evidentiary strength before deciding to pull the parent into the case.

<a id="q-3"></a>3. When is a parent company liable for its subsidiary?

Short answer: When the parent intervenes beyond the authority of an owner/member/shareholder and forces the subsidiary to conduct business contrary to normal business practice or engage in loss-making activities without reasonable compensation in the relevant fiscal year, causing damage to the subsidiary — the parent is liable for that damage (Article 196(3) of the 2020 Enterprise Law).

Explanation: This is the main legal door to "pull" the parent in, but it is a narrow one. Four elements must be proved together: (1) intervention exceeding owner/shareholder authority; (2) the subsidiary forced into non-arm's-length transactions or loss-making activities; (3) no reasonable compensation in the relevant fiscal year; (4) resulting damage to the subsidiary. A parent merely operating normally as a shareholder (appointing personnel, approving strategy) does not meet this test. One more key point: the compensation claim is not limited to the subsidiary — creditors or shareholders owning at least 1% of the subsidiary's charter capital may also claim compensation from the parent in their own name or on the subsidiary's behalf (Article 196(5)).

Basis: Article 196(3), (4), (5), (6) of the 2020 Enterprise Law. Text cross-checked against Law 59/2020/QH14 on thuvienphapluat.vn.

Next step: Collect early evidence of parent direction: emails, meeting minutes, internal instructions requiring the subsidiary to sign disadvantageous contracts, internal transfer pricing, or capital withdrawals. These documents decide whether your claim clears the Article 196(3) threshold.

<a id="q-4"></a>4. Which Vietnamese court has first-instance jurisdiction when the defendant is a foreign parent?

Short answer: The Regional People's Court where the case has the closest connection — since 1 July 2025, cases with a party or assets abroad fall under first-instance jurisdiction of the Regional People's Court under Article 35 of the 2015 Civil Procedure Code (as amended by Law 85/2025/QH15).

Explanation: Jurisdiction is determined in two steps. Step one: does the case fall within Vietnamese court jurisdiction at all (general jurisdiction under Article 469, exclusive jurisdiction under Article 470). Step two: which specific court — and because the defendant is a foreign organization, first-instance jurisdiction lies with the Regional People's Court where the case has the closest connection. Note the major change from 1 July 2025: under Law 85/2025/QH15 amending Articles 35 and 37 of the Civil Procedure Code, disputes and petitions with a party or assets abroad (previously first-instance at the provincial court) are now first-instance at the Regional People's Court; the provincial court retains appellate jurisdiction and certain special petitions (such as annulment/registration of arbitral awards at some provincial courts). On territorial jurisdiction, the general rule is the court of the defendant's residence or headquarters (Article 39(1)); but where the defendant is abroad, in practice the court with the closest connection — where the relationship was established or performed, where assets are located — will take the filing. Where the dispute concerns real estate in Vietnam, only the Regional People's Court of the property's location has jurisdiction.

Basis: Articles 35 and 37 (as amended by Law 85/2025/QH15, effective 1 July 2025), Articles 39, 469, and 470 of the 2015 Civil Procedure Code; Resolution 225/2025/QH15 on implementing Law 85/2025/QH15.

Next step: Prepare the statement of claim using the Regional People's Court's template; state clearly the parent's registered address abroad with a notarized translation of its business registration certificate (if available).

<a id="q-5"></a>5. How is the statement of claim served abroad on the parent company?

Short answer: Through judicial assistance: the Vietnamese court sends a service request to the central authority of the state where the parent is headquartered. The fastest current channel is the 1965 Hague Service Convention, in force for Vietnam since 1 October 2016.

Explanation: Valid service on a foreign defendant is a condition for the judgment to survive on procedural grounds. Vietnam deposited its instrument of accession to the 1965 Hague Service Convention on 16 March 2016, and the Convention took effect for Vietnam on 1 October 2016 (Accession Decision 2731/2015/QD-CTN of 8 December 2015; the Ministry of Justice is the central authority). Where both states are Convention members, the court sends a "Request for Service" on the Convention model form to the receiving state's central authority. Where the parent's state is not a member, service goes through bilateral judicial assistance treaties (if any) or diplomatic channels — significantly slower. Note: Vietnam declared upon accession that documents must be in Vietnamese or accompanied by a Vietnamese translation; files without translation are returned.

Basis: The Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (effective for Vietnam 1 October 2016); the Law on Judicial Assistance; the 2015 Civil Procedure Code.

Next step: Upon filing, ask the court for the estimated service timeline for the specific country — the real figure can range from 3 months to over a year, directly affecting your schedule and negotiation strategy.

<a id="q-6"></a>6. If the parent has no assets in Vietnam, can a judgment still be enforced?

Short answer: Very difficult to enforce within Vietnam. Vietnamese court judgments are essentially enforceable only against assets on Vietnamese territory; for assets abroad, you must seek recognition and enforcement of the Vietnamese judgment in that country.

Explanation: Civil judgment enforcement in Vietnam is carried out by civil judgment enforcement agencies whose authority is territorially limited. If the parent holds assets only abroad, the claimant must take the Vietnamese judgment to the asset state for recognition — depending on bilateral treaties between Vietnam and that state or the principle of reciprocity, and not every country readily recognizes Vietnamese civil judgments. That is why practitioners routinely advise: before suing, investigate the parent's assets (bank accounts, real estate, shareholdings in Vietnam?) and consider provisional urgent measures such as account freezing or asset seizure at the filing stage to avoid "winning the case but collecting nothing".

Basis: The 2008 Law on Civil Judgment Enforcement (as amended); Article 466 of the 2015 Civil Procedure Code on recognition of foreign judgments (applied by analogy under reciprocity when taking a Vietnamese judgment abroad).

Next step: Have counsel run a preliminary asset trace on the parent in Vietnam and consider filing for provisional urgent measures together with the statement of claim.

<a id="q-7"></a>7. Can international arbitration be chosen instead of suing the parent in a Vietnamese court?

Short answer: Yes, where the parties have a written arbitration agreement and the dispute falls within commercial arbitration. Foreign arbitral awards are recognized and enforced in Vietnam under the 1958 New York Convention.

Explanation: Arbitration is popular in cross-border disputes for three reasons: neutrality, confidentiality, and cross-border enforceability. Vietnam acceded to the 1958 New York Convention on 12 September 1995 (effective 11 December 1995), under which member states commit to recognize written arbitration agreements (Article II) and to recognize and enforce foreign arbitral awards under the procedure of the enforcement forum (Article III), refusing only on the narrow Article V grounds (e.g., invalid arbitration agreement, improper notice to the arbitrated party, award contrary to public policy). But where the parties have agreed to arbitration, Vietnamese courts will decline the case (Article 6 of the 2010 Law on Commercial Arbitration; Article 472 of the Civil Procedure Code). The arbitration-vs-court choice must therefore be made at the contract drafting stage.

Basis: The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Vietnam acceded 12 September 1995); the 2010 Law on Commercial Arbitration; Article 472 of the 2015 Civil Procedure Code.

Next step: Review the dispute resolution clause in every contract with foreign partners: to keep the "door" to Vietnamese courts open, do not insert an exclusive arbitration clause; to opt for international arbitration, specify the arbitral institution, seat, and governing law.

<a id="q-8"></a>8. What are the limitation periods for disputes with a foreign parent?

Short answer: Depends on the nature of the relationship: 2 years for business and commercial disputes; 3 years for civil contracts; no limitation applies to claims protecting ownership and other rights in property.

Explanation: Foreign elements do not change limitation periods — they are determined by the law governing the disputed relationship. For commercial disputes (sale of goods, services, investment…), Article 319 of the 2005 Commercial Law sets a 2-year limitation from when the lawful right or interest was infringed. For civil contracts, Article 429 of the 2015 Civil Code sets 3 years. One practical point to remember: service abroad can take many months, but limitation runs to the date of filing — so do not delay filing for "incomplete service paperwork"; file on time to stop the clock and complete international service during proceedings.

Basis: Article 319 of the 2005 Commercial Law (36/2005/QH11); Article 429 of the 2015 Civil Code (91/2015/QH13).

Next step: Pin down the exact date the dispute arose and the legal nature of the relationship to calculate limitation; if limitation is near expiry, file immediately to "stop the clock" — international service formalities can be completed during proceedings.

<a id="q-9"></a>9. Can a foreign judgment be brought back to Vietnam for recognition?

Short answer: Yes — under the procedure for recognition and enforcement in Vietnam of foreign civil judgments and decisions (Article 466 of the 2015 Civil Procedure Code), on the basis of an international treaty Vietnam has signed or the principle of reciprocity.

Explanation: This is the "fight away, collect at home" strategy: sue the parent in the court of its home state (easiest for service and enforcement), then bring the effective judgment back to Vietnam to enforce against the parent's assets in Vietnam (if any). Conditions: the judgment must be legally effective in the rendering state; recognition rests on a bilateral judicial assistance treaty or reciprocity; and the judgment must not fall into the refusal grounds (e.g., the defendant was not properly summoned, the judgment conflicts with fundamental principles of Vietnamese law). The deadline for a recognition application is 3 years from the judgment's legal effect.

Basis: Article 466 of the 2015 Civil Procedure Code; bilateral judicial assistance treaties to which Vietnam is a party.

Next step: Before choosing your "arena", compare three factors: (1) which states have judicial assistance treaties with Vietnam; (2) where the parent holds assets; (3) litigation costs abroad. The forum decision should rest on where assets can be enforced, not where filing is most convenient.

<a id="q-10"></a>10. The contract was signed with the Vietnamese subsidiary — can the parent be sued directly?

Short answer: Not automatically. One of two bases is needed: a parent guarantee/obligation clause in the contract, or proof of the conditions under Article 196 of the 2020 Enterprise Law.

Explanation: This is the most common misconception: "the subsidiary belongs to the parent, so the parent must pay its debts." The law does not recognize this logic. Each company is an independent legal person liable with its own assets (Article 196(2) of the 2020 Enterprise Law). To sue the parent where the contract was signed only with the subsidiary, the claimant needs: (a) a parent payment guarantee or performance support clause (a parent company guarantee letter is very common in FDI transactions and should be negotiated from the outset); or (b) proof that the parent intervened beyond authority causing damage to the subsidiary under Article 196(3); or (c) proof the parent was the de facto performer of the contract (e.g., the parent directly operated it and received payments). Without any of these, the court will dismiss the claim against the parent.

Basis: Article 196 of the 2020 Enterprise Law; the 2015 Civil Code on guarantees (from Article 335).

Next step: When negotiating contracts with subsidiaries of foreign groups, always require the parent to sign a guarantee letter or performance support clause — the cheapest "insurance" for the scenario where the subsidiary later becomes insolvent.

Your question isn't here?

Every foreign-element dispute has its own evidence, jurisdiction, and enforceability particulars. If your situation isn't covered, contact FLAT Law Firm for a tailored strategy — hotline 0988424851.

Read our related in-depth analyses: Vietnamese court jurisdiction over foreign-element disputes, recognition of foreign arbitral awards in Vietnam, and parent company liability when a subsidiary breaches a contract.

References

• 2015 Civil Procedure Code, No. 92/2015/QH13 — cross-checked on thuvienphapluat.vn (Articles 35, 37 as amended by Law 85/2025/QH15; Articles 39, 464, 466, 469, 470, 472).
• Law 85/2025/QH15 amending the Civil Procedure Code (Article 2), effective 1 July 2025 — in force; Resolution 225/2025/QH15 on implementing Law 85/2025/QH15.
• 2020 Enterprise Law, No. 59/2020/QH14 — Articles 195, 196 cross-checked on thuvienphapluat.vn.
• 2015 Civil Code, No. 91/2015/QH13 — Article 429 on limitation.
• 2005 Commercial Law, No. 36/2005/QH11 — Article 319 on commercial limitation.
• 1965 Hague Service Convention — accession and effectiveness for Vietnam (1 October 2016) from the Ministry of Justice (moj.gov.vn), Decision 2731/2015/QD-CTN.
• 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards — Vietnam acceded 12 September 1995, effective 11 December 1995.