Who is not eligible to head a representative office of a foreign trader?

The head of a representative office (also referred to as the Chief Representative) is an individual dispatched or appointed by a foreign trader to direct and manage all operations of the representative office in Vietnam. This position bears the ultimate responsibility for ensuring that the representative office operates within its authorized scope and complies with Vietnamese law, including international treaties to which Vietnam is a party.

1. Roles and Responsibilities of the Head of the Representative Office

The head of a representative office (also known as the Chief Representative) is a foreign commercial individual appointed or assigned to manage and oversee all activities of the representative office in Vietnam. This position has the highest responsibility for ensuring that the representative office operates within the scope of its authorization and in compliance with Vietnamese law, including all international treaties to which Vietnam is a party.

According to Article 33 of Decree 07/2016/ND-CP, the head of the representative office has the following main responsibilities:

- Responsible to foreign businesses for the activities of the body and representative office within the scope of authorization.

- Be responsible for your actions when performing them outside the scope of your authorization.

- When leaving Vietnam, a written authorization must be given to another person to exercise one's rights and obligations, with the consent of the foreign business entity. The head of the entity remains responsible for the authorization granted.

- In case of absence exceeding 30 days without authorization, or death, disappearance, detention, imprisonment, or restriction/loss of civil capacity, the foreign trader must appoint another person to head the representative office.

- If authorized to consolidate, amend, or supplement contracts, foreign traders must exercise their rights in writing for each transaction or amendment.

2. Who is not allowed to be the Head of a Representative Office?

Although Vietnamese law does not specifically stipulate standards regarding qualifications and experience for the position of a mature representative office, it does have clear regulations on cases where individuals are not permitted to assume or lack the legal capacity to perform this function.

According to current regulations (including general regulations on civil capacity and specific regulations for representative offices), the following individuals are not eligible to head a representative office of a foreign trader:

- Individuals who are volunteering to handle criminal cases or are serving prison sentences: Any individual who is under criminal investigation, trial, or serving a prison sentence is not legally qualified to manage and operate an organization.

- Individuals currently serving a sentence at a compulsory rehabilitation center or compulsory education facility: These individuals are granted freedom and the ability to act independently, but cannot perform managerial or administrative duties.

- Individuals who have been previously stripped of their right to practice a profession or engage in a job by a court according to the law: If an individual has been ruled by a court to have their right to manage or conduct business revoked due to prior offenses, they will not be eligible for this position.

- Individuals with cognitive difficulties, behavioral control issues, or limited/lost civil capacity: These are individuals who cannot make decisions or assume full legal responsibility on their own, and therefore are unsuitable for management positions.

- Individuals holding dual positions that conflict with interest or whose ability to manage independently is compromised: According to Clause 6, Article 33 of Decree 07/2016/ND-CP, the head of a representative office of a foreign trader is not permitted to hold the following positions:

+ The head of a branch of the same foreign trader.

+ The head of a branch of a foreign trader.

+ The legal representative of the foreign trader itself or another foreign trader.

+ The legal representative of an economic organization established under Vietnamese law (for example, the director of a Vietnamese limited liability company).

The regulations regarding this responsibility aim to ensure that the head of the representative office can fully focus on the office's operations, avoid conflicts of interest, and ensure independence in transactions.

Simply selecting and adding tasks to the initial document of a representative office is a strategic decision requiring a deep understanding of the law. Foreign businesses need to pay particular attention to regulations regarding ineligible entities and related legal obligations to ensure the representative office operates effectively, legally, and avoids unnecessary risks.

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(Author: Le Nguyen Phuong; Translator: Nguyen Phuong Anh; Date: June 13, 2025)

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