A circular economy is broadly defined as a regenerative industrial economy that captures vast amounts of resources for repeated use while ideally positively impacting the environment. It has been linked to significant economic benefits. The significant role of small and medium-sized enterprises in most economies is highlighted through an empirical analysis that explores the potential for implementing the circular economy in these enterprises, as well as the barriers to their transition toward a circular economy within a sustainable development strategy. Based on the described scenario of challenges and opportunities, this study aimed to make a legal analysis and show that companies are limited to complying with the law system in Vietnam. This study researches legal regulation systems to identify barriers and opportunities, which have been generally validated, and to raise awareness for taking action to encourage the development of SMEs in the circular economy.