The provision of legal services in Vietnam takes place in an environment in which both the institutional and legal frameworks are developing rapidly. The overall objective has been to achieve a complete change from bureaucratic management to running the nation according to the rule of law.

The new 1992 Constitution was specifically formulated to facilitate the transition from a centrally planned and managed economy to a more pluralistic one in which market forces would play an important role, but with a socialist orientation. Thus the new Constitution legitimised the independent operation of private firms and businesses and recognised the participation of entities other than the state in foreign investment. In addition, the government provided a measure of security to both foreign investors and Vietnamese citizens by granting title to legally held property and assuring landholders that their property would not be subject to appropriation or nationalisation without proper compensation.

The new Constitution gave impetus to the drafting of a considerable amount of new legislation required for the operation of a market-based economy. This included a Company Law, Law on Private Enterprises, Law on State Enterprises, Bankruptcy Law, Labour Code, Land Law, Tax Laws and, most recently, a Civil Code.

The process started with the Foreign Investment Law of 1987, which may be counted among the most liberal in socialist or formerly socialist countries. The thrust of legislation has been directed towards facilitating foreign investment and the better operation of the private sector so that it can sustain such a drive.

Challenges for practising foreign lawyers

Despite the new legislation, formidable difficulties still remain in operating within the legal environment in Vietnam. These appear to fall into two categories: intrinsic or conceptual difficulties on the one hand; and institutional problems that arise from these intrinsic difficulties on the other.

Intrinsic/conceptual difficulties

Lawyers practising in the commercial area in Vietnam, whether foreign or Vietnamese, have to deal with the inherent social uncertainty surrounding the mixture of law and commerce. The law, in the traditional interpretation, is an instrument of control to be used by the authorities in the proper management of society.