Compliance Consulting in Vietnam: Ensuring Adherence to Government Regulations and Standards

A compliance consultant in Vietnam ensures that a business adheres to governmental regulations and standards. These consultants can work in various industries, such as banking, insurance, health, or oil, but typically have specialized knowledge in a specific area. They are usually tasked with identifying compliance concerns, implementing measures to mitigate risk, training employees, and handling regulatory paperwork and reporting requirements.

Looking for a partner with thorough Corporate Compliance experience? We’ve got you covered.

To become a compliance consultant, it is recommended that you have a degree in law, business administration, or a similar area. Gaining expertise and experience in a particular regulatory field, such as healthcare management, can also be beneficial.

Introduction to Compliance Programs

A successful compliance program greatly influences a company’s capacity to function with integrity, uniformity, and excellence while preserving faith and reliability with its associated stakeholders, such as clients, suppliers, staff, and investors. Additionally, it constitutes a vital element of an efficient risk management plan.

Hence, any compliance program must include the following crucial elements:

People and Policies

Irrespective of what method is used to establish the compliance program, it is vital to be aware of who in the organization is utilizing it, the reasons for its usage, and the legal, statutory, or internal policy privacy and information security standards that must be complied with.

Technical Enforcement

An effective compliance program should enforce policies using various technical methods, including identifying data stored throughout the organization, categorizing data for better protection and sharing, and scanning content for compliance with privacy and security regulations. Sensitive data should be marked with a metatag and safeguarded by blocking, encrypting, protecting, or relocating it to a secure location to ensure appropriate access.

7 Elements of a Legally Effective Compliance Programs

1. Policies & Procedures

Having written policies, procedures, and controls is necessary to establish the company’s compliance program guidelines. However, it is also crucial to demonstrate that the program is more than just a mere document by putting it into practice. To ensure that employees are well informed about what behavior is acceptable and unacceptable, it is crucial to have a Code of Conduct/Ethics that clearly articulates these guidelines.

2. Chief Compliance Officer/Compliance Committee 

It’s important for your company to appoint a senior compliance officer with sufficient resources and authority to manage the compliance program daily. This individual should have direct access to senior management. Moreover, he or she should be a legal expert who may work closely with Human Resources professionals. A compliance committee can also be established to support the compliance officer’s work in implementing and managing the program.

3. Education & Training 

It is crucial to adequately train officers, employees, and business partners on the applicable laws, regulations, corporate policies, and prohibited behaviors to ensure that everyone knows the rules. 

4. Reporting

It is imperative for every company to establish a system that can record and retain different kinds of events or situations and transfer these concerns to the compliance officer or committee for proper management. Providing the option for the employee to remain anonymous is essential. This could be facilitated through a third-party vendor or similar means. The critical aspects of the process are ensuring the reporting process is secure, confidential, and prompt.

5. Monitoring & Auditing 

Regularly evaluate the company’s compliance risk and program and take immediate action to address any problems. Additionally, it is beneficial to conduct regular audits that focus on specific business areas, geographic regions, or market sectors during a specific period to identify and assess potential risks.

6. Enforcement

It is crucial that every member of the company recognizes and follows the compliance program and that the same standards are implemented consistently for everyone. The program’s active commitment is essential to ensuring that the rules are enforced correctly and uniformly.

7. Responding To Issues

A compliance program’s effectiveness depends on how quickly and thoroughly reported issues are investigated and resolved. Merely identifying compliance problems through monitoring and auditing is insufficient if the company fails to take action and correct the problems on time.

Responsibilities and Requirements of a Compliance Officer

A compliance officer is responsible for ensuring that the organization operates in accordance with external regulatory and legal requirements, as well as internal policies and guidelines. To fulfill this role, compliance officers work closely with management and staff to identify potential regulatory risks and implement effective risk management strategies to mitigate these risks.

Responsibilities

• Establish and execute an efficient program for legal compliance
• Establish effective internal control measures 
• Create, revise, and maintain company policies
• Conduct audits of procedures, methods, and records proactively to detect any deficiencies or vulnerabilities.
• Assess business economic activities, such as investments, to determine the level of compliance risk
• Work with financial auditors and Human Resource department as needed
• Develop plans to handle a compliance violation or crisis
• Provide education and training to staff regarding industry practices and regulations.
• Address employee inquiries or concerns related to legal compliance
• Keep up-to-date with internal benchmarks and business goals/objectives.

Qualifications and Competencies

• Reliable track record as a Compliance Officer/Manager
• Background in risk evaluation and management
• Understanding of legal mandates and controls, such as Anti-Money Laundering (AML)
• Knowledge of industry practices and professional standards
• Strong communication skills
• High ethical and moral standards
• Ability to work in a team
• Strong attention to detail
• Bachelor’s degree in law, finance, business administration, or a related field

What Compliance Consultants Can Do for You in Vietnam

Hurix, an established international expert in B2B digital services, mentions six reasons why you should employ a compliance consultant.

1. Helps Avoid Legal Liabilities 

To avoid potential legal disputes, negative impact on reputation, and financial losses resulting from non-compliance, it’s crucial for businesses to adhere to relevant laws and regulations. Compliance consultants in Vietnam can help companies comply with the applicable legislation and maintain a positive public image, which is important for business growth and success.

2. Improves Productivity 

A compliance consultant can aid in establishing robust business standards, which contribute to a positive work environment and a healthy organizational culture. Regardless of the business type, employees expect a secure and supportive workplace, and a clear compliance framework is essential to achieving that. 

3. Avoid Unnecessary Costs

If not effectively handled, compliance management can become challenging and expensive for any organization, whether the costs of employing staff to manage it or the penalties and fines that may be imposed for non-compliance. Engaging compliance consulting experts can help you ensure that you pay only for the services you require. Additionally, their experience helps you avoid heavy penalties or fines that might hurt your business.

4. File Assessments

An experienced compliance consultant can assist you with regularly evaluating all of your legal documents to ensure that your business is fully compliant. After that, they can recommend and execute better ways to manage your files that improve tracking and accessibility, especially during unexpected audits.

Additionally, a qualified consultant can assess all of your procedures and policies accurately, provide suggestions for improvement, and guarantee compliance with industry regulations. 

5. Risk Assessment

In some cases, businesses may not be aware of the risks they are facing, which can vary depending on the industry or sector. In such situations, seek compliance consultants to carry out a thorough risk assessment for the business. These consultants gather relevant information systematically and generate a comprehensive list of potential risks, along with possible methods to mitigate or eliminate them.

6. Ensure Compliance Faster

Compliance consultants with professional qualifications can carry out their duties with high time efficiency due to their experience. Since companies face constant regulatory challenges, the expertise of compliance consultants can assist them in creating procedures that enable them to handle these problems efficiently and rapidly.

Challenges in Vietnam

These benefits are especially important when doing business in Vietnam, a country with high bureaucracy, complex compliance procedures, and changing regulations. 

Excessive bureaucratic procedures 

From 2012 to 2020, over 57,000 officials faced persecution for misconduct, 17.4% were related to bureaucracy and irresponsibility, including abusing their power, submitting manipulated reports, and engaging in bribery. Hence, the Political and Economic Risk Consultancy (PERC) gave Vietnam a low ranking in terms of bureaucratic performance, placing it among the worst-performing countries in the world in 2018.

One significant issue in Vietnam’s administration is “commissions.” These are commonly different forms of bribes for speeding up or even just getting procedures started. Both Vietnamese and foreigners encounter this jarring issue. 

Required Use of The Vietnamese Language in Paperwork

To comply with regulations, all reporting, filing, and licensing documents must be written in Vietnamese. If any of these documents are originally in English or another language, they must be translated into Vietnamese by certified translators and then authenticated by a Vietnamese embassy.

Taxes in Vietnam

The government has introduced certain reforms to streamline the process of finalizing taxes, including tax filing and returns, and is transitioning towards a fully digitized tax filing system. However, there is still much work to be done by the authorities to enhance the technology for tax reporting, such as electronic tax declaration.

Cash-dependent Economy

Due to the unavailability of dependable and uniform cashless systems and ATMs, more than 90% of Vietnam’s transactions are conducted in cash, indicating that the country is heavily reliant on cash payments.

Conclusion

Compliance consultants are essential for businesses operating in Vietnam, as they provide valuable support and guidance on the country’s legal requirements. Their in-depth knowledge of Vietnamese laws and regulations helps businesses stay compliant, reducing the risk of penalties, lawsuits, and damage to their reputation. Furthermore, compliance consultants assist businesses in navigating the complex and ever-evolving regulatory landscape in Vietnam, which can be challenging for companies to keep up with.