Collecting Unpaid Invoices from a Vietnamese Buyer 2026: The Two-Year Limitation, Regional Courts, Account Freezes and Why a US Judgment Is the Hardest Route

Key takeaways

• You have two years. Commercial claims are time-barred two years after your right was infringed, which usually means two years after the payment due date. Civil contract claims get three years. A written acknowledgement of the debt or a partial payment restarts the clock.
• The courts changed in July 2025. District courts were abolished. Regional People's Courts now hear first-instance commercial cases, including those with a foreign element; provincial courts hear appeals.
• Court fees are a percentage of the claim. For a commercial claim the first-instance fee runs from a flat VND 3 million to 5% of the amount in dispute, with lower marginal rates on larger claims. The claimant advances the fee; the losing party ultimately bears it.
• A bank freeze is available but needs a deposit. The court must decide within three working days, but you must first lodge security of at least 20% of the amount to be frozen, and you must identify the account.
• A judgment is not money. After the ten-day voluntary compliance period, enforcement runs through the civil judgment enforcement agency. Decree 152/2026 lets enforcement officers check bank and property databases electronically, which has shortened the asset-tracing stage.
• A US court judgment must be recognised first, and usually is not. The United States has no treaty with Vietnam on civil judgments, so recognition rests on reciprocity, which Vietnamese courts rarely find. A US-seated arbitral award goes through the New York Convention; a VIAC award skips recognition entirely.
• The best recovery tool is the contract you signed years ago. A Vietnamese governing-law clause, a VIAC arbitration clause, a clear interest provision and a Vietnamese service address solve most of the problems described below before they arise.

Most debt recovery cases I handle for foreign clients in Hanoi start the same way. An American, Taiwanese, Japanese or Korean supplier has shipped goods to a Vietnamese buyer for two or three years. Payments slow down, then stop. The buyer says the bank is late, then that a customer has not paid them, then stops answering. By the time the file reaches a lawyer, the oldest invoices are eighteen months old and the client wants to know one thing: can we still get the money?

Usually the answer is yes, but the window is narrower than most foreign creditors expect, and the order of steps matters. Vietnam reorganised its court system in July 2025, modernised judgment enforcement in 2026, and still treats a foreign court judgment very differently from an arbitral award. This guide walks through the process as it works in 2026, from the demand letter to the day the enforcement officer transfers money to your account.

1. Before you sue: the demand letter and the limitation clock

Send a formal demand

A formal demand letter is not a legal prerequisite to suing, but it is the cheapest step and often the most effective. A letter that states the contract, the principal, the late-payment interest, a final deadline and the consequences of non-payment, sent by a law firm with a Vietnamese address, changes the conversation with a debtor who has been ignoring emails. It also creates evidence of the debt and of the debtor's response, which matters later.

Know your limitation period

For an unpaid invoice between two companies, the commercial two-year period applies, and it generally runs from the payment due date, invoice by invoice. A creditor with thirty invoices has thirty different deadlines.

The clock can restart. Under the Civil Code, the limitation period starts again if the debtor acknowledges part or all of the obligation, performs part of it, or the parties reconcile. In practice this means a signed debt reconciliation, a written payment plan, or even a partial transfer with a reference to the invoice can give you a fresh two years. If your oldest invoices are approaching the deadline, getting the debtor to sign a reconciliation statement is worth more than any argument about interest.

The court does not raise limitation on its own. Under Article 149 of the Civil Code, a court applies the limitation period only if a party asks before the first-instance judgment. A debtor with a lawyer will ask. A debtor without one may not. Do not rely on this.

2. Court or arbitration?

If your contract has a valid arbitration clause, you arbitrate; the court will refuse the case. If it does not, you litigate, unless the debtor agrees to arbitration after the dispute has arisen, which is rare.

For a straightforward unpaid-invoice claim against a Vietnamese debtor whose assets are in Vietnam, court litigation is often the practical choice: it is cheaper, no agreement is needed, and the regional courts handle these claims routinely. Arbitration wins when the dispute is complex, confidentiality matters, or the debtor has assets outside Vietnam. For the arbitration route in detail, see our guide to arbitration in Vietnam .

3. Which court: the 2025 reorganisation

Law No. 81/2025/QH15, in force since 1 July 2025, abolished the district-level courts and created Regional People's Courts as the first-instance courts for almost all civil, commercial and labour cases. The former High People's Courts were abolished in the same reform, leaving a three-tier system:

Ho Chi Minh City alone has 19 regional courts after the 2025 provincial mergers. The competent court is normally the regional court where the defendant has its head office, or where the parties have agreed in the contract, or where the contract was performed. A foreign claimant files in the same court as a Vietnamese one; there is no separate forum for foreign-related cases.

Can a Vietnamese court hear a claim against a Vietnamese debtor even if the contract was signed abroad? Yes. Under Article 469 of the Civil Procedure Code, Vietnamese courts have jurisdiction where the defendant is based in Vietnam, where it has assets in Vietnam, or where the contract was performed in Vietnam.

Court-annexed mediation. Before accepting a case, the court will offer mediation under the Law on Mediation and Dialogue at Court. It is free, voluntary and typically concludes within a few weeks. For a debtor who acknowledges the debt but needs time, a mediated settlement recorded by the court is enforceable like a judgment and saves the court fee.

4. Court fees

Court fees are set by Resolution 326/2016/UBTVQH14 and remain unchanged after the 2025 reforms. For a commercial claim with a monetary value:

The claimant pays an advance of half the fee when filing. The losing party ultimately bears the fee in proportion to the outcome. The appeal fee for a commercial case is a flat VND 2 million. For a VND 5 billion claim (roughly USD 190,000), the first-instance fee is about VND 113 million, or 2.3%.

Lawyers' fees are separate and are generally not recoverable from the losing party in Vietnamese court litigation, unlike in arbitration. Budget for them as a cost of recovery.

5. Procedure and realistic timeline

Simplified procedure. The Civil Procedure Code allows a simplified procedure where the facts are clear, the defendant admits the obligation, and the parties are in Vietnam, with a decision within one month of acceptance. It is rarely applied in practice to foreign-related cases, because a foreign claimant is treated as being outside Vietnam. Do not plan around it.

Service on a foreign party. If any document must be served abroad, for example on a foreign guarantor, expect several months through official channels. A contract clause naming a Vietnamese service address removes this delay.

Realistic total: a contested commercial claim that goes through appeal takes 12 to 24 months to a final judgment. An uncontested claim where the defendant does not appear can be faster, but courts are cautious about judging in absence and will attempt service repeatedly.

6. Freezing the debtor's assets

The biggest risk in a 12-month process is that the debtor empties its accounts in month one. The Civil Procedure Code allows interim measures, including freezing bank accounts, seizing assets and prohibiting transfers, which can be requested with the lawsuit or at any time afterwards. Against the individuals behind the debtor, the court can also order an exit ban under Article 128 of the Code.

What the court requires:

• Grounds: evidence that the measure is needed to secure the case or enforcement, typically that the debtor is moving or disposing of assets.
• Security: the requesting party must lodge money, precious metals or equivalent instruments with a bank or the court. The court sets the amount based on the potential loss to the debtor from a wrongful freeze, which must be at least 20% of the amount to be frozen unless there is clear evidence the loss would be lower.
• Identification: you must identify the account or asset. Bank account information is confidential, so the court will only ask the bank for details if you show you tried and were refused.

Timeline: the judge must decide within three working days of receiving a complete request with security lodged.

Practical reality: the freeze is only as good as your information. A creditor who kept the debtor's bank details from past invoices, who knows which land-use certificates the debtor holds, and who has the security deposit ready can freeze assets within days of filing. A creditor who starts gathering this after the debtor stops paying usually freezes nothing. The frozen amount cannot exceed the debt claimed.

Where the facts point to deception rather than non-payment, a false identity, forged documents, money moved out within days, the criminal route gives a freeze without the 20% security, but only once the suspect is charged. How the police separate a crime from a bad deal, and what the complaint must contain, is in Fraud and Employee Embezzlement in Vietnam 2026: How Much a Foreign Company Can Recover, Articles 174, 175 and 353 of the Penal Code, the Criminal Complaint, Account Freezes and Enforcement After Judgment .

7. Enforcement: turning the judgment into money

Decree 152/2026/ND-CP, issued in May 2026 to implement the new Law on Civil Judgment Enforcement (Law No. 106/2025/QH15, in force since 1 July 2026), is the most significant practical improvement for creditors in years. Before it, an enforcement officer had to write to each bank individually; now database access makes it harder for a debtor to hide a working account. The weak point remains debtors who have genuinely stripped their assets, often by transferring them to related companies or parking them in an individual's name before the judgment. A creditor who suspects this should move for interim measures early rather than wait for enforcement; why assets held in a Vietnamese individual's name are so hard to reach is explained in our guide to nominee holdings in Vietnam . And where the buyer never intended to pay and obtained the goods with false identities or documents, the matter is criminal rather than civil and belongs with the police.

8. Foreign judgments: why a US court judgment is the hard road

Many foreign creditors have a contract governed by their home law with their home courts chosen. They sue at home, win, and then ask how to enforce in Vietnam. The answer is a separate recognition proceeding in Vietnam, and it is slower and less certain than enforcing a Vietnamese judgment or an arbitral award.

Legal basis. Vietnamese courts recognise foreign civil judgments on the basis of a treaty, or, absent a treaty, on the basis of reciprocity (Civil Procedure Code, Article 423). Vietnam has judicial assistance agreements covering civil judgments with a limited list of countries and territories, mostly in Europe and Asia. The United States is not on that list, and neither are the United Kingdom, Singapore or Australia. For creditors from those countries recognition depends on reciprocity, which in practice means persuading the Vietnamese court that the courts of your country would recognise a Vietnamese judgment. Vietnamese courts have applied that principle inconsistently and have recognised few judgments on that basis.

Procedure.

Practical reality. Vietnamese courts recognise far fewer foreign judgments than they receive applications for. Service on the Vietnamese debtor in the foreign proceeding is the most common failure point: if the debtor was served by email or by a method Vietnamese law does not recognise, the application fails on the "duly summoned" ground. For US claimants this is where the Hague Service Convention matters. Vietnam has been a party since 1 October 2016, with the Ministry of Justice as its central authority. Vietnam accepts service through the central authority and, under Article 10(a), by registered mail with acknowledgement of receipt, but it objects to service through judicial officers or private process servers, and every document must carry a notarised Vietnamese translation. Serve the Vietnamese debtor by one of the two accepted routes and keep the proof of service for the recognition file. A default judgment obtained after service by email or ordinary courier is close to worthless in Vietnam.

The comparison that matters. A VIAC award against the same debtor needs no recognition proceeding at all; it goes to the enforcement agency once the 30-day set-aside window closes. A foreign arbitral award, whether made in New York, Singapore or Hong Kong, needs recognition, but Vietnam has been a party to the New York Convention since 1995, the refusal grounds are narrower and there is far more precedent. A foreign court judgment is the slowest of the three. If your business sells into Vietnam regularly, this ordering should drive your contract drafting.

9. Contract clauses that make recovery possible

Everything above becomes easier or harder depending on five clauses signed years before the dispute:

• Governing law: Vietnamese law, if the debtor and its assets are in Vietnam. A Vietnamese court applying foreign law needs expert evidence and slows down; a VIAC tribunal applying Vietnamese law does not.
• Dispute resolution: VIAC arbitration seated in Hanoi or Ho Chi Minh City, with the language and number of arbitrators specified. If you prefer court, specify the regional court at the debtor's head office.
• Late-payment interest: specify the rate. For commercial contracts under Vietnamese law, a creditor may claim overdue interest at the average overdue-lending rate of commercial banks if the contract is silent, but a stated rate avoids argument. Contractual penalties are capped at 8% of the value of the breached obligation; damages are separate.
• Debt acknowledgement mechanism: a clause requiring quarterly signed reconciliation statements. Each signed statement restarts the two-year limitation period and is near-conclusive evidence of the debt.
• Service address: a Vietnamese address and email for notices, and the debtor's bank account details recorded in the contract, so that a freeze can be requested on day one.

These clauses belong in the supply contract from the start. If you are setting up your own entity in Vietnam rather than selling in from abroad, the licensing and corporate side is covered in the complete guide to establishing a business in Vietnam .

Frequently asked questions (FAQ)

How long do I have to sue for an unpaid invoice in Vietnam?

Two years from the payment due date for commercial claims between businesses. A signed acknowledgement of the debt or a partial payment restarts the period. The court applies the time bar only if the debtor raises it.

Which court hears my case after the 2025 reform?

The Regional People's Court where the defendant has its head office, unless the contract chooses another court. Provincial courts hear appeals. District courts no longer exist.

How much are court fees for a VND 1 billion claim?

VND 36 million plus 3% of the amount above VND 800 million, so VND 42 million, about 4.2%. The claimant advances half at filing; the losing party bears the fee in the end.

Can I freeze the debtor's bank account before judgment?

Yes, with the lawsuit or later. You must identify the account and lodge security of at least 20% of the amount to be frozen. The court decides within three working days.

How long does a debt recovery case take?

A contested case through appeal takes 12 to 24 months to a final judgment, plus enforcement. Early interim measures and a debtor with identifiable assets shorten the money-in-hand timeline more than anything else.

Can I enforce a US court judgment in Vietnam?

Only after a Vietnamese court recognises it. The United States has no treaty with Vietnam on civil judgments, so the court looks for reciprocity, which it rarely finds. The application must be filed within three years, the debtor must have been served in the US proceedings by a method Vietnam accepts, in practice through the Hague Service Convention's central authority or by registered mail with acknowledgement of receipt and a Vietnamese translation, and the review takes about five months plus any appeal. A US-seated arbitral award is recognised under the New York Convention instead, and a VIAC award avoids the step altogether.

Are my lawyers' fees recoverable?

Generally not in court litigation. In VIAC arbitration the tribunal may order the losing party to bear reasonable legal costs.

How Louis Group can help

Louis & Partners Vietnam handles debt recovery for foreign creditors from the demand letter through enforcement: limitation analysis invoice by invoice, pre-filing asset investigation, interim measure applications, litigation in the regional courts of Hanoi and Ho Chi Minh City , VIAC arbitration, recognition of foreign judgments and awards, and enforcement agency proceedings. Our Taipei and Bangkok offices coordinate directly with creditors in Taiwan and Thailand.

Author: Nguyen Trung Kien , Founder and Chief Lawyer, Louis & Partners Vietnam, Hanoi.

*This article reflects Vietnamese law and court practice as of October 2026. A draft law amending the Commercial Law 2005 is scheduled to go before the National Assembly; if enacted, the limitation period and penalty rules described above may change. This article provides general information only and is not legal advice. Please contact Louis Group for advice on a specific claim.*

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