HEAD OF FOREIGN REPRESENTATIVE OFFICE, HOW IS REGULATED

When establishing a foreign representative office in Vietnam, choosing the head of foreign representative office is an important part to ensure smooth and effective operations. Conditions are set for responsibilities and authorities, along with compliance with appropriate legal regulations in line with the functions of the foreign representative office.

Foreign representative office operates as dependent unit

Based on the Commercial Law, foreign representative office in Vietnam operates as a dependent unit of the foreign trader.

The foreign representative office performs the function of a liaison office, market research, and promotion of investment and business opportunities for the trader it represents, excluding services that are regulated against establishing foreign representative office in that field. Foreign representative office are not allowed to engage in profit-generating activities directly in Vietnam.

Restrictions for head of foreign representative office

The head of a representative office shall not concurrently hold the following titles:

– The head of a branch of the same foreign traders;

– The head of a branch of another foreign trader;

– The legal representative of the same foreign trader or others;

– The legal representative of a business organization incorporated in accordance with Laws of Vietnam.

The foreign representative office in Vietnam carries out the function of representing the foreign trader in Vietnam under authorization and must comply with Vietnamese legal regulations related to the delegation of authority to the person performing the duties of the head of foreign representative office.

Legal responsibility of the head of foreign representative office

The head of foreign representative office is responsible to the foreign trader for their own activities and those of the foreign representative office within the scope delegated by the foreign trader. Additionally, they bear responsibility for their actions in cases where they carry out activities beyond the authorized scope.

The head of foreign representative office needs to pay attention to the issue of authorization to perform functions and tasks

In the absence of the head of foreign representative office from Vietnam, he/she shall grant the power of attorney to another person. The power of attorney shall be made with the prior consent of the head office. However, the head of foreign representative office shall be responsible for exercising rights and obligations specified in the power of attorney.

Upon the expiry of the power of attorney stipulated above, if the head of foreign representative office has yet to return and no additional power of attorney is made, the current authorized person shall be eligible for exercising rights and obligations as the head of foreign representative office within the scope of authorization until the head of foreign representative office returns or the head office appoints another person as the new head of foreign representative office.

If the head of foreign representative office from Vietnam is absent from Vietnam for a period of longer than 30 days without any authorization, or if the head of foreign representative office is dead, missing, detained, sentenced to prison or has no capacity for action, the head office shall appoint another person as the new head of foreign representative office.

Penalties for violations of head of foreign representative office

Depending on the behavior and severity of the violation, the foreign representative office may be subject to administrative sanctions according to the following regulations:

Fine from VND 20,000,000 to VND 30,000,000 for one of the following acts:

– The head of foreign representative office is also the head of a branch of the same foreign trader or of another foreign trader in Vietnam;

– The head of foreign representative office concurrently serves as the legal representative of the foreign trader;

– The head of foreign representative office concurrently serves as the legal representative of an economic organization established in accordance with the laws of Vietnam.

Additional penalties:

Deprivation of the right to use the license to establish a foreign representative office from 01 month to 03 months.