Regulations on changes to information of the authorized representatives of foreign organizational shareholders

Changing the information of the authorized representatives of foreign organizational shareholders is an important legal procedure that requires strict compliance with Vietnamese law. As a person who holds and exercises the rights and obligations of a foreign organizational shareholder in Vietnam, the authorized representative has a significant influence on the enterprise’s operations. NPLaw hereby provides the relevant regulations governing the above matter to ensure that such changes are implemented lawfully and effectively.

I. Overview of changes to information of the authorized representatives of foreign organizational shareholders

In joint stock companies in Vietnam, changing the information of the authorized representatives of foreign organizational shareholders is an important procedure to ensure transparency and legal compliance. 

The authorized representative is an individual appointed by the foreign organization to exercise the shareholder’s rights and obligations in the company on behalf of. When there is a change to such a representative, the company is required to notify the Business Registration Office where its headquarters is located. Proper and timely completion of such a procedure not only ensures compliance with the law but also safeguards shareholders’ rights and the company’s reputation in its business operations.

II. Legal regulations on changes to information of the authorized representatives of foreign organizational shareholders

1. Cases in which changes to information of the authorized representatives may arise

Changes to the information of the authorized representative of the foreign organizational shareholder may arise in various circumstances, including:

• Change of the authorized representative: Where the foreign organizational shareholder decides to terminate the authorization of the former representative and appoint a new one; or where the current representative resigns, is changed its position, or no longer satisfies the conditions to assume such a role.
• Change of personal information of the authorized representative: Where the representative remains unchanged but there are changes to personal details such as full name, passport number, nationality, or contact address, such information must be updated accordingly.
• Change in ownership ratio or capital structure: Where the foreign organization changes its shareholding ratio, it may be necessary to adjust or appoint additional authorized representatives to correspond to the contributed capital.
• Changes based on internal regulations or legal requirements: These may arise from amendments to the company charter, new regulations on the number or standards of authorized representatives, or requirements from competent State authorities during inspection or examination processes.

Accordingly, foreign organizational shareholders must implement the change procedures in a timely manner to avoid affecting their shareholder rights and obligations as well as the company’s corporate governance.

2. Obligations to notify changes to information of the authorized representatives 

Pursuant to Clause 3, Article 60 of Decree No. 01/2021/NĐ-CP, the foreign organizational shareholder is obliged to notify the Business Registration Office where the company’s headquarters is located of any changes to the information of its authorized representative within 10 days from the date such changes occur.

3. Procedures for changing information of the authorized representatives 

Step 1: Preparation of the dossier

Pursuant to Article 60 of Decree No. 01/2021/NĐ-CP, the dossier for notification of changes to the information of the authorized representative of the foreign organizational shareholder includes:

• A notice of supplementation or update of enterprise registration information (in accordance with the form set out in Appendix II-5 issued together with Circular No. 01/2021/TT-BKHĐT);
• A power of attorney authorizing the person to submit the dossier and receive the results, where such person is not the legal representative of the joint stock company. This document is not required to be notarized or certified;
• A valid copy of one of the personal identification documents of the authorized person implementing the procedure (if any):
  + For Vietnamese citizens: Citizen Identity Card, Identity Card, or valid Vietnamese passport;
  + For foreigners: Valid foreign passport or equivalent valid document.

Step 2: Submission of the dossier

• The dossier shall be submitted to the Business Registration Office under the Department of Planning and Investment where the company’s headquarters is located, either directly or via the National Enterprise Registration Portal.

Step 3: Receipt and processing of the dossier

• The Business Registration Office shall receive the dossier and issue a receipt, examine the validity of the dossier, and update the changed information in the National Enterprise Registration Database.

Step 4: Receipt of results

• Within 03 working days from the receipt of the complete and valid dossier, the Business Registration Office shall complete the procedure and notify the results.
• Upon request, the Business Registration Office shall issue a Certificate of Changes to Enterprise Registration Contents to the joint stock company.

Step 5: Public disclosure of the changes

• Upon completion of the change procedure, the joint stock company is obliged to publicly disclose the changes on the National Enterprise Registration Portal within 30 days from the date of change.
• Thus, full compliance with procedural steps, dossier requirements, submission deadlines, and disclosure obligations will enable the company to promptly complete the procedure and avoid unnecessary legal risks.

4. Competent authority for handling changes to information of the authorized representatives 

Pursuant to Article 60 of Decree No. 01/2021/NĐ-CP, the competent authority to handle changes to the information of the authorized representative of the foreign organizational shareholder is the Business Registration Office under the Department of Planning and Investment where the company’s headquarters is located.

5. Legal consequences of failure to notify or late notification of changes

Pursuant to Clause 1, Article 45 of Decree No. 122/2021/NĐ-CP, failure to publicly disclose enterprise registration contents on the National Enterprise Registration Portal or failure to do so within the prescribed time limit shall result in an administrative fine ranging from 10,000,000 VND to 15,000,000 VND.

In addition to the monetary fine, the enterprise shall be compelled to publicly disclose the enterprise registration contents on the National Enterprise Registration Portal in accordance with Point a, Clause 1, Article 45 of Decree No. 122/2021/NĐ-CP.

In summary, to avoid legal consequences and ensure effective business operations, enterprises must fully and timely implement procedures for notifying changes to the information of the authorized representative of foreign organizational shareholders.

III. Certain questions regarding changes to information of the authorized representatives 

1. If the former authorized representatives lose civil act capacity, how is the replacement procedure implemented and what documents are required?

Where the authorized representative of the foreign organizational shareholder loses civil act capacity, the joint stock company must implement procedures to replace such representative in accordance with law. Detailed procedures are set out in Section II.3 above.

2. Do changing the authorized representatives affect transactions or decisions made by the former representative during the previous authorization period?

The change of the authorized representative of the foreign organizational shareholder does not affect the legal validity of transactions or decisions made by the former representative during the authorization period, provided that such transactions or decisions were executed within the scope and term of authorization.

Pursuant to Articles 140 and 141 of the Civil Code 2015, an authorized representative is entitled to establish and perform civil transactions within the scope and duration of authorization. Accordingly, transactions and decisions lawfully made by the former representative during the valid authorization period remain legally binding on third parties.

3. If the new power of attorney contains ambiguities or conflicts with the previous one, what clarifications should the Vietnamese joint stock company request from the foreign organizational shareholders?

Where the new power of attorney contains unclear provisions or conflicts with the previous one, the Vietnamese joint stock company should request the foreign organizational shareholder to clarify the following matters to ensure legal validity and avoid operational risks:

• Scope and content of authorization: Determining whether the scope of authorization under the new document differs from the previous one. If differences exist, request clarification of the reasons and written confirmation of the new scope of authorization.
• Duration of authorization: Verifying the effective term of the new power of attorney and comparing it with the previous one. Requesting clear confirmation of the commencement and expiration dates to avoid overlap or legal gaps.
• Legal status of the authorized person: Verifying the personal information and legal status of the new authorized representative, and requesting supporting documents evidencing legal capacity and civil act capacity.
• Validity of the previous power of attorney: Clarifying whether the previous power of attorney has expired, been revoked, or remains effective, and request an official document confirming its termination to avoid conflicts in determining the lawful representative.
• Form and validity of the power of attorney: Ensuring that the new power of attorney is executed in the proper form as required by law, duly signed by a competent person and affixed with a seal (if any). If necessary, it should request notarization or certification to enhance legal enforceability.

Clarifying these issues enables the Vietnamese joint stock company to ensure that the new authorized representative has full authority and lawful status to implement transactions and make decisions on behalf of the foreign organizational shareholder.

IV. Legal consulting services on changes to information of the authorized representatives of foreign organizational shareholders

The above are the main legal issues concerning changes to information of the authorized representatives of foreign organizational shareholders as presented by NPLaw. Should you have any questions or require further clarification, please do not hesitate to contact NPLaw.