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The role of a Country Manager is pivotal in multinational corporations, especially when expanding into new markets such as Vietnam. The position is generally tasked with establishing a solid operational base for the company, ensuring the stability and growth of its business in a foreign jurisdiction. Given the importance of this role, the legal implications of holding the title of Country Manager need to be carefully examined. Specifically, it is crucial to determine whether the Country Manager automatically qualifies as the Legal Representative of the company under Vietnamese law. This article seeks to clarify the legal framework governing the designation of a Legal Representative in Vietnam and how this applies to the role of Country Manager. For purposes of this discussion, the terms "company" and "enterprise" are used interchangeably.
Definition of Legal Representative Under Vietnamese Law
Under Vietnamese law, a Legal Representative is an individual who represents to act on behalf of the company, executing rights and obligations arising from the company's transactions, representing the company in disputes before adjudicative bodies, and performing other duties as stipulated by law. Although the company, as a legal entity, possesses the capacity to engage in legal relations independently, it cannot directly carry out its rights and obligations. This responsibility must be undertaken by a specific individual, in this case referred to as the Legal Representative.
In some instances, the Legal Representative may delegate their authority to another person to perform certain tasks. However, the Legal Representative remains liable for any actions performed by their delegate in accordance with the authority granted.
The Critical Role of the Legal Representative
A company incorporated in Vietnam is required to appoint at least one Legal Representative. The appointed Legal Representative is the person to sign the application for company registration during its initial days, which is submitted to the Department of Planning and Investment in the locality where the company is headquartered. Depending on the company's organizational structure and business model, the company may have more than one Legal Representative. This must be clearly stipulated in the company’s Charter.
If the company appoints multiple Legal Representatives, the Charter must detail the specific rights and responsibilities of each individual. In the absence of such provisions, all Legal Representatives are deemed to have full authority and are jointly and severally liable for any damage caused to the company under the law.
Requirements to Serve as a Legal Representative
The Legal Representative of a company in Vietnam may be either a Vietnamese or a foreigner, provided that the following conditions are met:
- The individual must be at least 18 years old and possess full legal capacity.
- If the company has only one Legal Representative, that individual must reside in Vietnam.
- The individual must hold a management position or higher, depending on the company’s organizational structure.
- The individual must demonstrate the professional capacity and operational acumen necessary to effectively manage the company’s affairs.
- The individual must not be serving a prison sentence, facing criminal prosecution, or be otherwise legally restricted from serving as a Legal Representative.
Titles Associated with the Legal Representative
The title of Legal Representative must be associated with a managerial position or higher, as determined by the company and recorded in its Charter. However, when a company appoints only one Legal Representative, the individual must occupy one of the following titles, depending on the type of company: Chairman of the Members’ Council, Chairman of the Company, Chairman of the Board of Directors, Director, or General Director.
In light of this, it is clear that the title of Country Manager does not automatically confer the status of Legal Representative if the company has only one Legal Representative. The Country Manager may only be recognized as the Legal Representative if they concurrently hold one of the above-mentioned titles or if the company has appointed multiple Legal Representatives.
Conclusion
In conclusion, while the position of Country Manager is of strategic importance for multinational companies operating in Vietnam, it does not inherently carry the status of Legal Representative unless specific legal conditions are met. Companies must carefully evaluate their internal governance structures and ensure that they appoint individuals who meet the legal requirements to serve as Legal Representatives in Vietnam. This distinction is essential for the smooth functioning of the company and for ensuring compliance with local laws.
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