This is a comprehensive guide to the legal framework for corporate document retention in Vietnam. It covers the legal basis, document classification, retention periods, archiving procedures, and how to handle accounting records, human resources files, and invoices to ensure compliance and optimize corporate governance.
1. Overview of Corporate Document Retention and Preservation
1.1. “Retention” vs. “Archiving”: Key Legal Distinctions
Understanding the difference between these two concepts is the first step in building an effective document management policy. Retention is the act of keeping documents for day-to-day business operations. Archiving, on the other hand, is the systematic preservation of documents for their long-term legal value after their operational use has ended.
1.2. The Importance of Legal Compliance and Administrative Benefits
Complying with document retention and archiving regulations is not only a mandatory legal obligation but also a strategic investment. A well-organized archiving system saves the company time and resources when searching for information during audits, inspections, or restructuring. This minimizes legal risks and increases the company’s value.
1.3. Core Legal Framework: Key Current Regulations
Document retention regulations are scattered across various legal instruments. Key laws include:
- Law on Enterprises of Vietnam 2020: Provides general provisions on the types of documents that must be retained.
- Law on Accounting of Vietnam 2015: Specifies detailed regulations on the retention period and location for accounting documents.
- Law on Archives of Vietnam 2011: Outlines general principles for document archiving activities.
- Other Specialized Laws and Regulations: This includes laws such as the Law on Construction, the Law on Securities, and other guiding decrees and circulars.
2. Mandatory Document Classification and Retention Periods
2.1. Classification by Functional Group
For effective management, documents should be classified into the following primary groups:
- Accounting and Tax Documents: Accounting vouchers, ledgers, financial statements, invoices, etc.
- Legal and Corporate Documents: Company charter, member register, meeting minutes, etc.
- Human Resources and Labor Documents: HR files, labor contracts, payroll records, etc.
- Specialized Documents: Bid dossiers, construction project files, etc.
2.2. Detailed Retention Periods as Per Law
Based on Vietnamese law, document retention periods are categorized into three tiers:
- Minimum 5 years: This applies to vouchers not used directly for accounting entries (e.g., receipts, payment slips) and other internal documents.
- Minimum 10 years: This applies to documents used directly for accounting entries, financial statements, invoices, and asset liquidation records.
- Permanent: This applies to documents of historical significance or with important legal value, such as original personnel files and labor management ledgers. This period is generally understood to be at least 10 years or until the document is naturally destroyed.
2.3. Summary Table of Corporate Document Retention Periods
| Document Type | Legal Basis | Retention Period | Notes |
|---|---|---|---|
| Accounting documents used directly for entries, financial reports; ledgers; monthly/quarterly/annual financial statements; asset liquidation records | Law on Accounting of Vietnam 2015, Decree 174/2016/ND-CP | Minimum 10 years | Applicable to documents with high legal and financial value. |
| Invoices | Decree 174/2016/ND-CP, Circular 39/2014/TT-BTC | Minimum 10 years | Applies to both paper and electronic invoices. |
| Terminated labor contracts | Former Circular 09/2011/TT-BNV | Minimum 5 years | Must be retained to resolve potential disputes. |
| Original personnel files (CVs, diplomas, employment decisions) and labor management ledgers | Law on Archiveso of Vietnam 2011, Ministry of Home Affairs Circulars, Labor Code 2019 | Permanent or for the duration of the enterprise’s operation | Ensures the continuity of labor management records. |
| Accounting documents used for management and not directly for entries (receipts, payment/warehouse slips); customs declarations | Decree 174/2016/ND-CP, Law on Customs | Minimum 5 years | Applies to vouchers that are not direct basis for tax declarations. |
| Winning bid dossiers | Circular 10/2022/TT-BNV | 10 years | Applies to winning bid dossiers. |
3. Implementation: Building a Professional Archiving Procedure
3.1. The 7-Step Process Based on ISO 9001 Standards
To establish a systematic archiving process, businesses can follow these seven standard steps:
- Document Collection: Periodically gather all generated records and documents.
- Classification and Arrangement: Organize documents according to clear criteria.
- Determination of Retention Period: Assign a specific retention period for each type of document.
- Storage Management: Place documents in a physical archive or an electronic system.
- Document Use: Establish rules for accessing, borrowing, and returning documents.
- Monitoring and Updating: Regularly update document records.
- Document Disposal: Dispose of documents that have reached the end of their retention period following a strict procedure.
3.2. Principles for Scientific Document Organization
To optimize efficiency, businesses should apply these principles:
- Consistent Naming Conventions: Use a consistent, concise, and easy-to-understand naming rule for all documents.
- Logical Folder Structure: Build a clear and logical folder structure, hierarchically organized by function or project.
- Access Control: Ensure that only authorized personnel can access documents to maintain information security.
4. Modern Archiving Solutions: From Paper to Digital
4.1. Legal Requirements for Electronic Documents
Vietnamese law recognizes the legal validity of electronic documents provided they meet standards for security, authenticity, and integrity. Electronic archiving must ensure data is secure and regularly backed up to mitigate risks.
4.2. Pros and Cons of Archiving Methods
| Method | Pros | Cons |
|---|---|---|
| Physical Archiving | Easy to access, sense of security. | Takes up space, prone to damage and loss. |
| Electronic Archiving | Cost-effective, easy to search, high security. | Requires infrastructure investment, risk of data breaches or cyberattacks. |
4.3. The “Paradox” of Digital Legal Framework
Although electronic documents are recognized, the Law on Enterprises still requires businesses to retain documents at their “head office or other location specified in the company’s charter.” This creates a paradox for modern cloud-based solutions, presenting an administrative barrier for businesses that want to go fully digital.
5. Legal Penalties and Risks of Non-Compliance
5.1. Common Violations and Corresponding Administrative Fines
Violating retention regulations can lead to severe financial penalties, ranging from failure to retain documents at the registered office to improper destruction of records.
| Violation | Legal Basis | Fine |
|---|---|---|
| Failure to retain records at the head office or location specified in the company charter | Decree 122/2021/ND-CP | VND 30,000,000 to VND 50,000,000 |
| Late archiving of accounting documents by 12 months or more past the deadline | Decree 41/2018/ND-CP | VND 500,000 to VND 1,000,000 or a Warning |
| Incomplete retention of accounting documents or unsafe storage causing damage or loss | Decree 41/2018/ND-CP | VND 5,000,000 to VND 10,000,000 |
| Destruction of accounting documents before the retention period expires | Decree 41/2018/ND-CP | VND 10,000,000 to VND 20,000,000 |
| Destruction of accounting documents without establishing a destruction council, using improper methods, or failing to prepare a destruction record | Decree 41/2018/ND-CP | VND 10,000,000 to VND 20,000,000 |
| Illegal copying or backup of archival documents or failure to return documents on time | Proposed Law on Archives (amended) | VND 15,000,000 to VND 30,000,000 |
5.2. Consequences Beyond Fines
Beyond financial penalties, non-compliance can lead to more serious consequences, such as the loss of evidence in litigation, damage to the company’s reputation, and business disruption due to inspections.
Document retention is an essential component of modern corporate governance. Complying with the law and implementing a scientific archiving process not only helps businesses avoid legal risks but also serves as a solid foundation for sustainable and effective development. The transition to electronic archiving is an inevitable trend that helps optimize processes and enhance information security.
