The new Enterprise Law and Investment Law which were both adopted in 2014 apply to foreign-invested and local companies in Vietnam. These laws confer the legal frame for an equal treatment in most of the economy industries. In this article, our company formation consultants in Vietnam explain a few key aspects related to company directors in Vietnam.
General roles of directors in Vietnam
The director of a legal entity in Vietnam, who is appointed by the owner(s) of the company, assumes executive powers and manages the daily activities of the company for shareholding and limited liability companies.
He or she is legally liable for the implementation of the delegated duties and rights. The directors of limited liability companies cannot be affiliated to a member of the Members’ Council, thus ensuring the power segregation between the ownership of the legal entity and the management.
For shareholding companies, though, the Enterprise Law allows individuals to assume roles of both a director and a chairman of the board of management. Our Vietnam company formation advisors can offer more details on this matter. We can also help investors to open a company in Vietnam. In addition to getting information from our agents about company directors in Vietnam, you can also rely on our specialists in other matters. If you own a company in Vietnam, you are recommended to avail of the services of our CPA in Vietnam. Accounting is essential to the success of your company. You must understand how much money is flowing into your company, where it is going, and what you can do with that information. Accounting services improve the efficiency of all accounting tasks such as payroll, taxes, invoicing, accounting, and more.
Director powers and responsibilities in Vietnam
Shareholders of legal entities in Vietnam entrust their businesses to the directory management. The board of directors, in exchange, supervises the daily running of the business by senior management.
In private legal entities, the directors are many times shareholders and managers who are salaried. In public companies, though, it is more likely for the board of directors to be more diverse: some managers could be salaried (executive directors) and others, non-executive ones. Our Vietnam company registration agents can provide more information on this subject.
Company directors in Vietnam can be:
• Executive;
• Non-executive.
The number of directors on the board and the ratio of executive and non-executive ones differs with every legal entity.
If you have more questions about the corporate structure of companies in Vietnam, or for assistance to set up a company in Vietnam, please get in touch with our friendly staff.