Firms need legal clarity, non-criminalization of business risks to invest boldly: lawyer

Businesses will only commit to large-scale investments and long-term strategies when the legal framework is transparent and consistent, without mechanical criminalization of business risks, said a lawyer at Baker & McKenzie.

Speaking at the conference "40 years of reform: The leading role of economic groups" organized by The Investor in Hanoi on Monday, special counsel Ngo Thai Ninh said a clear boundary between business risk and criminal liability is essential to building the confidence needed for companies to undertake major projects.

“For an economy to develop globally and regional competitive private conglomerates, it needs not only capital, technology and markets, but also trust in the legal system,” he said.

Entrepreneurs are more willing to invest and take calculated risks when property rights are protected, freedom of business is respected, and risks arising from normal operations are assessed appropriately, Ninh added.

Vietnam has in recent years reaffirmed the principle of not criminalizing civil and economic relations, with the issuance of many Politburo and National Assembly resolutions.

The parliament's introduction of Resolution No. 198/2025/QH15 to institutionalize the Politburo's Resolution 68-NQ/TW further reinforces expectations for a more transparent, stable, and predictable legal environment for the business community.

However, lingering concerns remain among businesses over the lack of clarity between management errors, commercial risks, and criminal offences.

Amid a series of high-profile economic cases, perceived legal risks have in some instances outweighed market risks, prompting companies to scale back investment or avoid large, long-term projects.

On a more positive note, Ninh said Vietnamese firms have made progress in legal governance over the past decade, with more companies proactively engaging legal counsel and building internal compliance functions rather than focusing solely on short-term profits.

This shows that businesses have begun to view legal governance as a core competitive capability, on par with financial governance, technology, or market strategy. Still, he stressed the need to further codify the distinction between business risks and intentional violations.

Criminal sanctions, the Hanoi-based lawyer said, should follow a principle of “minimum criminalization”, applied only to acts causing serious harm or involving clear intent to exploit. Most disputes related to transactions, governance or contract execution should be addressed through civil and economic measures.

This is not just a matter of legal technicalities, but also about fostering a spirit of daring to think outside the box, taking risks, and making large investments among Vietnamese entrepreneurs.

He also called for a legal framework that allows companies reasonable time and mechanisms to remedy errors, restructure operations or compensate for damages before facing criminal penalties.

Alongside regulatory improvements, greater investment is needed in the legal ecosystem, including lawyers, corporate legal experts and policymakers, to ensure laws are practical, transparent and aligned with market realities.

Ultimately, he said, building strong private conglomerates depends not only on capital or technology, but also on a mature rule-of-law system that supports entrepreneurial risk-taking.

Only when laws are sufficiently clear, consistent and applied appropriately will businesses be confident enough to invest at scale and contribute more significantly to economic growth, he added.