Legal representative of foreign-owned companies in Vietnam

During operation in Vietnam, many foreign-owned companies need to appoint foreigners as the legal representatives of the companies. This is a necessary need as the legal representative shall act on behalf of the company to sign contracts, make transactions and perform obligations and rights of the company. Appointing foreigners as the legal representatives of foreign-owned companies in Vietnam could make management, control and daily business decisions become easier. However, currently, the regulations on foreign labor have become narrower. Hence, appointment of foreign legal representative of foreign-owned companies in Vietnam need to be complied with the laws. Viet An Law Firm collects and provides some main information on the process of appointment of legal representative of foreign-owned companies in Vietnam as well as foreign employees as follows:

Step 1: Determination and reports on foreign labor demand

Foreign-owned companies in Vietnam have obligation to determine the foreign labor demand of them and report to the Ministry of Labor, War Invalid and Social Welfare or the President of the People’s Committee of provinces.

Report form: Form No.1 attached in Circular No.40/2016/TT-BLĐTBXH issued by the Ministry of Labor, War Invalid and Social Welfare dated October 25^th 2016.

Execution time: At least 30 days prior to the expected date of recruitment.

Duration of the process: Within 15 days from the date of submission of the report, the Ministry of Labor, War Invalid and Social Welfare or the President of the People’s Committee of provinces will approve the foreign labor demand of foreign-owned companies.

Notice: Currently, many representative offices in Vietnam of foreign companies are planning to establish foreign companies and intending to appoint the head of representative office to hold the position of legal representative of the company. However, in accordance with Article 33 Decree No.07/2016/NĐ-CP, the legal representative of a business organization established under the laws of Vietnam cannot hold the following positions at the same time:

• The head of a representative office in Vietnam;
• The head of a branch in Vietnam.

Because the laws of each country are different, foreign investors should pay attention to this regulations in order to have suitable recruitment plan, avoid wasting time and application refusal.

Step 2: Apply for Work Permit for foreign employees

Conditions foreign employees need to satisfy to be granted the Work Permit:

• Have full legal capacity as regulated by the laws;
• The employee’s health is fit for the job;
• The employee is a manager, executive officer, expert or technician;
• The employee is not a criminal or liable to criminal prosecution under the laws of Vietnam or foreign laws;
• The Ministry of Labor, War Invalid and Social Welfare or the President of the People’s Committee of provinces granted an approval on foreign labor demand.

Application for Work Permit includes:

• A written request for the work permit of the employer (Form No.7 attached in Circular No.40/2016/TT-BLĐTBXH);
• The health certificate or medical examination issued by competent health organizations or agencies in foreign countries or Vietnam which is valid within 12 months from the signing date of those certificate or examination to the submission date of the Work Permit application;
• Criminal record or written confirmation verifying that foreign employee is not a criminal or not liable to criminal prosecution issued in the foreign countries. If the employee resides in Vietnam, just the criminal record issued in Vietnam is required;

Notice: The criminal record and written confirmation must be issued within 06 months from the date of issuance to the date of submission of the Work Permit application;

• Documents proving that the employee is manager, executive officer, expert or technician: Each job and position requires different document. Generally, any foreign employee should have at least 03 years of working experiences in the related field, suitable with the position he/she will hold in Vietnam and is confirmed by competent organizations, agencies in foreign countries and have a bachelor degree and above;
• 02 colored photos (4cm x 6cm, white background, frontal face, bareheaded and no colorful glasses);
• Notarized copies of passport or equivalent documents or other license for international travel which is valid as regulated by the laws.

Notice: The health certificate or medical examination, criminal record or written confirmation, documents proving employee’s experiences mentioned above must be notarized copies. If they are issued by foreign competent agencies, they must be notarized under the laws of the foreign country, consular legalized at the diplomatic mission of Vietnam then translated into Vietnamese and notarized in Vietnam to be valid for usage in Vietnam.

Execution time: At least 15 days prior to the day the foreign employee starts working, the company shall submit the application for Work Permit.

Submission place: The Department of Labor – War Invalid and Social Welfare

Duration: Within 07 working days from the date of receipt of the valid and full application, the Department of Labor – War Invalid and Social Welfare shall decide to grant the Work Permit or not. If case of refusal, the Department shall grant a written respond providing explanation.

Step 3: Sign labor contracts

After the foreign employee is granted the Work Permit, foreign-owned company in Vietnam must sign labor contract with the foreign employee and send the copy of contract to the Department of Labor – War Invalid and Social Welfare within 05 days from the signing date.

Foreign investment services in Viet An Law Firm:

• Consult about regulations and procedures of foreign investment in Vietnam;
• Consult about foreign employees working in foreign-owned companies in Vietnam;
• Consult and draft application for Investment Registration Certificate, Business Registration Certificate, sublicense for foreign-owned companies in Vietnam;
• Consult and draft application for foreign labor demand and application for Work Permit for foreign employees in Vietnam;
• Submit the application and work with state-authorized agencies when Clients authorize us;
• Consult about after-establishing issues: labor, tax, contract, social insurance…

Clients seeking for advice about regulations and procedures related to foreign investment and enterprises in Vietnam, please feel free to contact Viet An Law Firm for more information!