Non-compete agreements in Vietnam

Are confidentiality and trade-secret clauses allowed in Vietnam?

Yes. The Labour Code expressly allows a written agreement to protect an employer’s business and technological secrets, including the scope of protection, its duration and the compensation payable if the employee breaches it (Labour Code 2019, Article 21.2).1 Unlike a non-compete, this sits squarely inside the statute, so a well-drafted confidentiality clause is the strongest protection most employers actually need.

The protection also runs through the discipline rules: serious disclosure of trade secrets is one of the specific statutory grounds on which an employee may be dismissed (Article 125),1 which is covered under labour discipline and dismissal grounds in Vietnam. A confidentiality clause is distinct from the question of who owns the work an employee produces — that is a separate issue, set out in who owns IP created by employees in Vietnam. For most IP-heavy hires, such as a software developer engaged through an EOR, a confidentiality clause plus a clean IP-assignment clause does more real work than a non-compete ever will.

Why are post-employment non-competes a grey area?

A post-employment non-compete restrains a worker after the job ends — typically barring them from joining a competitor or setting up a rival business for a set period. No Vietnamese statute directly makes such a clause enforceable, and it pulls against a constitutional right: the 2013 Constitution gives citizens the right to work and to choose their career, job and workplace (Article 35).4 A court or tribunal weighing a non-compete therefore has to reconcile a private contract with a fundamental right, and it will not simply rubber-stamp a broad restraint.

That tension is why blanket claims in either direction are wrong. It is inaccurate to say non-competes are flatly “illegal” or “void” in Vietnam, and it is equally inaccurate to treat them as reliably enforceable the way an employer might in another jurisdiction. The honest answer is that a reasonable, narrowly drawn clause has a real and improving chance of being upheld, while an overbroad one is likely to fail.

What did Precedent 69/2023/AL change?

Precedent No. 69/2023/AL was adopted by the Judicial Council of the Supreme People’s Court on 18 August 2023, published by Decision 364/QĐ-CA on 1 October 2023, and took effect on 1 November 2023.2 It confirmed that a non-disclosure and non-compete arrangement can be treated as a civil agreement independent of the labour contract, and that a commercial arbitral tribunal — such as the Vietnam International Arbitration Centre — has jurisdiction to hear a dispute over it under the Law on Commercial Arbitration (54/2010/QH12). In the underlying case a Vietnamese court recognised the resulting arbitral award.3

Two points matter for how you read this. First, the precedent is about forum and characterisation — it settles that these clauses can be arbitrated as independent agreements; it does not declare every non-compete valid. Second, reasonableness limits run through the reasoning: a clause that bars an entire industry, covers the whole country or runs well beyond roughly 12 to 24 months is vulnerable, whereas the clause in the underlying case ran for about 12 months.23 Enforceability remains fact-specific, so the drafting below is where the outcome is really decided.

How do you draft a non-compete for the best chance of enforcement?

Because enforceability turns on reasonableness, drafting is not a formality — it is the whole case. The aim is a clause an arbitral tribunal can see as a fair, proportionate protection of a genuine business interest rather than a blanket ban on earning a living. The table contrasts the positions that tend to strengthen a clause with those that tend to sink it, drawing on the reasonableness limits in the precedent and Vietnamese advisory practice; none of these is a statutory formula, and all of it is case-specific.

What is the practical approach for foreign employers?

Lead with what the law clearly supports. A written confidentiality and trade-secret clause under Article 21.2, paired with a proper IP-assignment clause, is enforceable and usually protects the interest you actually care about — your information and your work product — without relying on the uncertain non-compete at all. Treat a post-employment non-compete as a secondary layer, drafted narrowly, not as your first line of defence.

If you do include one, keep it reasonable on every axis in the table above, consider offering compensation for the restricted period, and structure it so it can stand as an independent agreement an arbitral tribunal can hear. Above all, take Vietnamese legal advice on the specific clause before you rely on it: the position is firming up but remains fact-specific, and a clause that would be routine elsewhere may be read down or refused here. The confidentiality obligation also intersects with data protection — how employee and customer personal data is handled is governed separately, as set out in data protection for HR data under the PDPL. For the wider contract framework these clauses sit inside, see Vietnam labour law and employment contracts, and for what happens when the relationship ends, terminating employees in Vietnam.

How does EOR Vietnam protect IP and confidentiality?

When you hire through EOR Vietnam, our Vietnam-registered entity is the legal employer that signs the labour contract — so the confidentiality and trade-secret terms, and the IP-assignment clause, go into the contract we issue, drafted to Article 21.2 and to current practice.1 Because the worker is employed by our entity rather than directly by you, the work product and any assigned rights have to flow through to you cleanly; we build that chain of assignment into the documents from the start, which is explained in who owns IP created by employees in Vietnam. If you want a post-employment non-compete, we draft it narrowly and flag honestly where enforceability is uncertain rather than overselling it.

Drafting these clauses carries no separate charge. Our service is a flat US$149 per employee per month for Vietnamese nationals — the same fee regardless of salary, seniority, role or headcount, as of October 2026 — and there are no setup, onboarding, contract or payslip fees. Foreign nationals who need a work permit are quoted separately. A refundable security deposit equal to two months of the employee’s employment cost is held for the engagement and returned at the end, less any unpaid amounts. See how an employer of record works in Vietnam, browse our Vietnam employer guides, or request a costed EOR Vietnam quote.