Does a Foreigner Acting as the Legal Representative of a Company Need a Work Permit if They Remain Abroad and Manage the Company Remotely?
Question:
If a foreigner serves as the legal representative of a company but is not physically present in Vietnam, manages the company remotely from abroad, and company documents are sent overseas for signature, is a work permit required?
Lawyer’s Opinion about Foreigner Acting as the Legal Representative of a Company in Viet Nam:
A work permit is a document that authorizes a foreign national to work legally in Vietnam. It is issued by the Employment Department under the Ministry of Labour, Invalids and Social Affairs or by the provincial Departments of Labour, Invalids and Social Affairs.
Clause 3, Article 12 of the 2020 Law on Enterprises provides:
Article 12. Legal Representatives of Enterprises
An enterprise must always ensure that at least one legal representative resides in Vietnam. If the enterprise has only one legal representative residing in Vietnam, when that person leaves Vietnam, he or she must authorize another individual residing in Vietnam in writing to exercise the rights and perform the obligations of the legal representative. In such case, the legal representative remains responsible for the exercise of the delegated rights and obligations.
Accordingly, if a company has only one legal representative, the company is generally required to obtain a work permit for that legal representative because the legal representative must maintain a residential address in Vietnam in order to comply with the Law on Enterprises. Based on this requirement, the labor authorities may determine that the legal representative resides and works in Vietnam and therefore must obtain a work permit.
Article 51 of Decree No. 122/2021/ND-CP on administrative penalties provides:
1. A fine ranging from VND 20,000,000 to VND 30,000,000 shall be imposed for one of the following violations:
a) Failure to have a legal representative residing in Vietnam.
Therefore, if a company has only one legal representative and that person is not regularly present in Vietnam, the company may be subject to a fine of up to VND 30,000,000.
In addition, Clause 2, Article 12 of the 2020 Law on Enterprises allows limited liability companies and joint-stock companies to have one or more legal representatives.
Accordingly, the company may appoint an additional legal representative who is either a Vietnamese citizen or a foreigner who regularly resides in Vietnam.
In this case, the company does not need to replace the existing legal representative but can still satisfy the legal requirement of having at least one legal representative residing in Vietnam. At the same time, the company may not be required to obtain a work permit for the first legal representative, thereby allowing that person to continue holding the position without violating labor regulations.
However, having multiple legal representatives requires the company to establish clear provisions in its Charter regarding the situation where the first legal representative is not present in Vietnam and does not directly manage the company’s operations from the time of establishment, while still retaining supervisory and decision-making authority over the management activities of the second legal representative. This ensures compliance with Vietnamese law and meets the company’s internal control requirements.
Conclusion
Based on the above regulations, the answer to the question is as follows:
If a foreigner serves as the legal representative of a company but remains outside Vietnam, manages the company remotely, and signs company documents abroad, a work permit is generally required.
For more detailed advice, please contact our Hotline: 0868 335 186.
Legal Consultation by Lawyer Tran Duc Hung – DHP Law Firm
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