All companies in Vietnam must appoint at least one legal representative. So who can be a legal representative and what are the requirements of this role within the legal frameworks of Vietnam? Let’s find out.

1. What is a Legal Representative in Vietnam?

A Legal Representative is an individual, either a Vietnamese citizen or a foreigner, who represents a company in Vietnam. The scope of their representation includes:

• Exercising the rights and obligations arising from the company’s business transactions;
• Representing the company in legal proceedings;
• Fulfilling other rights and obligations related to the company according to relevant regulations.

The primary legal documents governing the legal representatives of companies in Vietnam include the Law on Enterprises 2020, the Civil Code 2015, and the company’s internal charter.

The appointment of a legal representative must be stipulated in the company’s charter and registered with the Business Registration Office. The information of the legal representative(s) will be publicly available on the Enterprise Registration Certificate, the National Business Registration Portal, the Tax Information Portal, and potentially on many private websites.

The Legal Representative must have a management title. Specifically:

• The first legal representative must hold the title of Director, or General Director, or Chairman, depending on the type and managing model of the company.
• Subsequent legal representatives have more title options. Please select from this LIST.

2. Who can be a Legal Representative?

To become the legal representative of a company in Vietnam, an individual must meet the following standards:

• Be a Vietnamese citizen or a foreigner;
• Be at least 18 years old and have full legal capacity;
• Possess professional qualifications and experience in the company’s business administration, and meet other conditions as stipulated in the company’s charter;
• Not be subject to any prohibitions on managing businesses as outlined in Article 17.2 of the Law on Enterprises.

An individual can act as the legal representative of multiple companies, provided that all those companies are in full compliance with Vietnamese laws, including tax, customs, labor, and social insurance regulations.

3. Residency Requirement for Legal Rep

A company must have at least one legal representative residing in Vietnam. If the sole legal representative residing in Vietnam travels abroad, they must delegate their responsibilities to another Vietnamese resident through an authorization letter. Importantly, the legal representative remains accountable for the delegated duties.

If the authorization period expires and the legal representative has not returned to Vietnam, and there is no other authorization in place, the authorized person will continue to carry out the rights and obligations of the legal representative until:

• The legal representative returns to work; or
• The company appoints another person as the legal representative.

4. Multiple Legal Representatives of a Company

LLCs and JSCs may have one or more legal representatives. The company’s charter must specifically divide the rights and obligations among legal representatives. Otherwise, each legal representative shall be considered a duly authorized representative of the company before third parties. Additionally, all legal representatives shall be jointly and severally liable for any damages caused to the company in accordance with relevant laws.

5. Duties of the Legal Representatives

Here are the key legal duties of a legal representative according to Article 13 of the Law on Enterprises 2020:

• Exercise the assigned rights and obligations honestly and prudently to ensure the company’s lawful interests;
• Act loyally in the best interests of the company;
• Avoid abusing their position or title. This includes abstaining from decisions where they have a personal interest;
• Promptly and fully disclose to the company any information about enterprises in which they or their related parties own shares or hold stakes, as prescribed by the Enterprise Law.

If a legal representative fails to comply with these duties and causes damage to the company, they will be personally liable for such damages.

6. Foreign Legal Representatives

In Vietnam, there is no requirement that the company’s legal representative must be a Vietnamese national. Therefore, the company may appoint qualified foreigners residing in Vietnam as the legal representative. Next, the company needs to apply for a work permit for the foreigner unless exempt. Foreign legal representatives are also eligible to apply for a Temporary Residence Card (TRC) to stay long-term in Vietnam.

7. Changing the Legal Representative

When the company changes its legal representative, it must register the change of information on the Enterprise Registration Certificate (ERC) with the Department of Planning and Investment within 10 days from the date of the change.

Failure to comply with this requirement may result in a fine ranging from VND 20,000,000 to VND 30,000,000 (According to Article 49.5 of Decree122/2021/ND-CP).

Conclusion

A legal representative plays an important role in ensuring a company’s lawful and sustainable operation in Vietnam. By fulfilling their duties diligently, legal representatives can effectively safeguard their company’s interests and contribute to its success.

The above information only reflects some basic regulations for the role of legal representative in Vietnam. For in-depth legal advice on legal representatives or a change in your Vietnam company’s legal representative, contact Nova Law for a quote.

Author: Lawyer Nguyen Minh Phuong – Hanoi Bar Association