Many FDI enterprises in Vietnam — particularly subsidiaries of European groups — are receiving requests from their parent companies to establish internal “whistleblowing channels” for employees to report misconduct. The legal question: does Vietnamese law require private or FDI enterprises to have an internal whistleblowing channel? The answer: NO — Vietnamese law currently does not require private/FDI enterprises to establish an internal misconduct-reporting channel. The existing legal framework governs denunciation (to cao) — citizens reporting violations to state authorities — and anti-corruption, not the EU-style internal corporate whistleblowing model.
1. No duty to establish an internal reporting channel for private/FDI enterprises
Two concepts that are often conflated must be clearly distinguished:
- Denunciation (to cao) under Vietnamese law: a citizen informing a competent authority, organisation or individual about legal violations by an agency, organisation or individual — this relationship points outward, toward the State;
- Internal corporate whistleblowing under EU standards: a mechanism inside the enterprise allowing employees and partners to report misconduct safely and confidentially, protected against retaliation.
Vietnamese law has a comprehensive denunciation framework but no provision obliging private or FDI enterprises to build an internal channel for receiving and handling misconduct reports. This is a fundamental difference from Directive (EU) 2019/1937, which requires EU companies with 50 or more employees to maintain internal reporting channels. That Directive serves only as an international reference standard; it does not apply directly in Vietnam.
2. The current denunciation framework
The denunciation regime is governed by:
- Law on Denunciation 25/2018/QH14 (Articles 2, 9, 22) — still in force, with no recorded replacement: regulates citizens’ right to denounce, the duties of receiving authorities and the protection of denouncers;
- Decree 24/2018/ND-CP — still in force: detailed implementation of the Law on Denunciation;
- Circular 05/2021/TT-TTCP — still in force: guiding the Government Inspectorate complaint-handling process.
This entire framework governs the citizen — state authority relationship; it imposes no organisational duty on private enterprises to build internal channels.
3. Anti-corruption: focused on the public sector
The second body of law often cited is anti-corruption:
- Law on Anti-Corruption 36/2018/QH14 (Chapter VII) — still in force;
- Decree 59/2019/ND-CP — still in force: detailing provisions of the Law.
However, the anti-corruption framework focuses on the public sector, officials, civil servants and state-owned enterprises. Private and FDI enterprises are not the primary subjects of internal anti-corruption organisational duties under these instruments.
4. Protecting employees who report misconduct: Article 8 of the Labour Code
In employment relations, Vietnamese law provides an important “shield”: Article 8 of Labour Code 45/2019/QH14 strictly prohibits employers from retaliating against employees — including reprisals against employees for reporting or denouncing misconduct. This provision:
- applies to all enterprises, including private and FDI companies;
- protects employees against dismissal, discipline, demotion or benefit cuts for having reported misconduct;
- is, however, a “shall not” duty (prohibition of retaliation), not a “shall” duty — it does not oblige enterprises to set up a dedicated reporting channel.
5. Internal audit: Decree 05/2019/ND-CP
Decree 05/2019/ND-CP on internal audit — still in force — sets internal audit requirements for certain subjects (mainly public-sector units and some state-owned enterprises). It is an internal control tool, not the same as a whistleblowing channel for employees to report. Note: specific article numbers on internal audit in other related instruments have not been fully verified; companies should check the original texts before applying them.
6. Why FDI enterprises should still consider a channel even though the law does not require it
Despite the absence of a direct legal duty, many FDI enterprises voluntarily build internal reporting channels for practical reasons:
- Parent-group requirements: EU groups within the scope of Directive (EU) 2019/1937 often apply a global whistleblowing policy, including subsidiaries in Vietnam;
- Early risk detection: internal fraud, corruption and compliance breaches detected through an internal channel cost far less than when exposed by authorities or the press;
- Evidence of good-faith compliance: when incidents occur, having a reporting mechanism in place demonstrates good faith;
- Corporate culture: a safe reporting channel helps retain talent and strengthens partner confidence.
A word of caution: no Vietnamese draft legislation on mandatory whistleblowing for private enterprises has been recorded. Companies should monitor legislative developments, and when building a voluntary channel must ensure compliance with personal data protection rules and avoid breaching Article 8 of the Labour Code (the retaliation ban).
Conclusion
Vietnamese law does not require private/FDI enterprises to establish an internal whistleblowing channel — a point to remember to avoid misapplying EU standards in Vietnam. The current framework (Law on Denunciation 25/2018, Law on Anti-Corruption 36/2018, Article 8 of Labour Code 45/2019, Decree 05/2019) protects reporters and governs denunciations to state authorities, but imposes no internal-channel organisational duty on enterprises. Nevertheless, for FDI enterprises — especially subsidiaries of EU groups — voluntarily building a reporting channel remains a risk-management practice worth considering.
Contact us
If your company needs to design an internal reporting-channel policy compliant with Vietnamese law and compatible with your group global policy, please contact FLAT Law Firm for detailed assistance.
Note: This article is for general information only and does not constitute legal advice. Laws are frequently amended; each specific case must be assessed on its own file and the applicable regulations. This article was prepared with AI assistance and reviewed by the FLAW AI Legal Council; publication is pending owner approval, and does not replace the advice of a human lawyer.
