In the trend of globalization and the increasingly strong development of trade as it is now, many foreign business entities choose the investment form of establishing representative offices of foreign business entities. To maintain the operations of the foreign business entity's representative office, an individual is appointed to hold the position of chief of the representative office (also known as the Head Representative) to manage the office's activities. So, when changing the head of the foreign representative office, what legal requirements need to be ensured to comply fully and correctly? Let NPLaw help you clarify this matter with the article below!

I. When will the change of the head of the foreign representative office happen?

In the process of operating a foreign business entity's representative office, changes are inevitable, and there are many reasons that lead enterprises to have to change the chief of the representative office. Therefore, to clarify this content, NPLaw would like to present some related legal concepts for readers to understand better.

The representative office of a foreign business entity in Vietnam is a dependent unit of the foreign business entity, established in accordance with Vietnamese law to understand the market and carry out certain commercial promotion activities permitted by Vietnamese law.

Pursuant to Article 33 of Decree 07/2016/ND-CP detailing the Commercial Law on representative offices and branches of foreign business entities in Vietnam, it is regulated as follows:

- The chief of the Representative Office or Branch must be responsible to the foreign business entity for their own activities and those of the Representative Office or Branch within the scope authorized by the foreign business entity.

- The head of the Representative Office or Branch must be responsible for their activities in case of performing activities beyond the scope authorized by the foreign business entity.

Pursuant to Clause 3, Article 15 of Decree 07/2016/ND-CP, changing the chief of the representative office of a foreign business entity is one of the cases that require the procedure to adjust the representative office's operation license.

Changing the head of the foreign representative office is implemented when:

Firstly, the Head of the Representative Office of a foreign business entity is appointed by the foreign business entity to operate and be responsible within the scope of authorization. Therefore, the foreign business entity can, based on the contents of the authorization document or other agreements, terminate the representative activities of the current head and replace the person with a new person to ensure the business entity's operations and interests.

Secondly, the change of the head of the foreign representative office is carried out when the head of the representative office is not present in Vietnam for more than 30 days without authorizing another person to perform the rights and obligations of the head of the representative office, or is deceased, missing, detained, imprisoned, or has their civil act capacity restricted. Then the foreign business entity must appoint another person as the head of the representative office (Pursuant to Article 33 of Decree 07/2016/ND-CP).

II. Conditions for changing the head of a foreign representative office

In general, there are no specific conditions to change the head of a foreign representative office. However, for the new head of the foreign representative office, business entities need to pay attention:

The head of the representative office of a foreign business entity is not allowed to concurrently hold the following positions:

- The head of the branch of the same foreign business entity;

- The head of the branch of another foreign business entity;

- The legal representative of that foreign business entity or another foreign business entity;

- The legal representative of the economic organization that was established following the regulations of Vietnamese law.

Legal basis: Clause 6, Article 33 of Decree 07/2016/ND-CP.

III. Regulations on changing the head of a foreign representative office

Regulations on changing the head of a foreign representative office are a compilation of rules regarding the timing of changes, conditions for changes, and procedures for changing the head of a foreign representative office according to legal provisions (dossiers, execution order, execution time, etc.). Readers need to follow the entire content of this article to get more information.

IV. Instructions for the procedure of changing the head of a foreign representative office

Vietnamese law does not specifically regulate the procedure of appointing a head of a representative office, as this is decided by the foreign business entity. However, based on practical experience, NPLaw would like to provide the following guidelines:

1. Dossier for changing the head of the foreign representative office

A complete set of dossiers is a necessary and sufficient requirement for proceeding with the next steps in the procedure of changing the head of a foreign representative office. This content is very important, but not everyone knows about it.

According to the provisions of Article 16 of Decree 07/2016/ND-CP, the dossier for changing the head of the foreign business entity's representative office includes:

- Application for adjustment of the head of the foreign business entity's representative office (Form MD-3 Circular 11/2016/TT-BCT).

- Document from the foreign business entity appointing the new chief of the representative office (notarized and translated into Vietnamese).

- A copy of the passport, identity card, citizen identification card (if Vietnamese) or a copy of the passport (if foreign) of the new chief of the representative office (notarized and translated into Vietnamese).

- Documents proving that the former head of the representative office fulfilled their personal income tax obligations up to the time of the change (personal income tax settlement declaration or the confirmation of no tax debt from the tax authority;…).

- Certificate of registration for the operation of the foreign business entity's representative office (original).

2. The procedure for changing the head of a foreign representative office

Step 1: Recruit a substitute head representative.

Step 2: Issue a decision to change and declare the tax settlement fully in accordance with legal regulations.

The appointment decision is signed and sealed by the legally authorized representative of the business entity.

To adjust the operating license of a foreign business entity's representative office (change the chief of the representative office), the following procedure must be followed:

Tax declaration and personal income tax settlement for the former head of the representative office: The tax declaration and settlement are carried out until the decision to change the chief of the representative office is made at the provincial (city) tax department where the representative office is located.

Step 3: Notify the Department of Industry and Commerce where the representative office headquarter is located.

Pursuant to Clause 1, Article 17 of Decree 07/2016/ND-CP, within 60 working days from the date of changes regulated in Article 15 of this Decree, foreign business entities must complete the procedures to adjust the Representative Office Establishment License.

3. The duration for changing the head of the foreign representative office

Resolution duration: Within 03 working days from the date of receiving the dossier, the licensing authority will review and request additional documents if the dossier is incomplete or invalid. The request for additional documents can be made a maximum of once during the entire process of handling the dossier.

Within 05 working days from the date of receiving a complete and valid dossier, the licensing authority will either approve or deny the adjustment of the Representative Office establishment license. A written document stating the reasons must be provided in case of denial of adjustment.

Legal basis: Clauses 3 and 4, Article 17 of Decree 07/2016/ND-CP.

Regarding the competent authority for resolution: The authority that issues the operating license for representative offices.

In addition, enterprises also need to pay attention to the tasks that need to be done after changing the head of the foreign representative office in Vietnam as follows:

Immediately after being granted the Representative Office License with the information of the new chief of the representative office, foreign business entities should pay attention to the following contents:

- Keep the appointment decisions; employment contracts;

- Complete the procedures for personal income tax declaration and insurance for the new head of the representative office.

- Change digital signature information; bank account, and other related documents.

V. Should I find a lawyer to consult on the procedures for changing the head of the foreign representative office?

Hiring a lawyer to consult on the procedures for changing the head of a foreign representative office is absolutely necessary.

Hiring a lawyer helps you ensure compliance with legal regulations regarding procedures and dossier, thereby avoiding unnecessary mistakes, saving the enterprise time and costs (ensuring no violations that lead to administrative penalties).

The consultation fees of the lawyer are not too high and are relatively reasonable.

The consultation provided is comprehensive, with clear legal grounds and specific analysis for the enterprise to understand. At the same time, the lawyer also provides guidance to help the enterprise prepare the most complete dossier.

Currently, NPLaw also provides reputable and responsible consulting services for changing the head of a foreign representative office, ensuring absolute satisfaction for our clients.

At NPLaw we:

- Receive information from the Client about the procedure for changing the head of the representative office.

- Draft the dossiers for the procedure to change the head of the representative office.

- On behalf of the client, implement the procedure to change the head of the representative office.

- Receive and hand over the results to the Client after completing the procedure to change the head of the representative office.

Above is the consultative content from NPLaw for readers on the topic of changing the head of a foreign representative office and other related issues. Hope the article is useful to you. During the process of referring to the article, if there is any unclear content or if you need consultation on using the service, please contact our consultation hotline using the information below to receive timely support from our team of experts!