When the legal representative of a company — usually the director, general director or chairperson — is absent for a long period (overseas business trips, medical treatment, or relocation abroad), the company cannot leave signing authority vacant. Vietnamese enterprise law provides clear mechanisms: from written authorization of another person, to the mandatory appointment of a new legal representative when the absence exceeds 30 days without authorization.
1. Foundational rule: the company must always have a legal representative residing in Vietnam
Under Article 12 of the Law on Enterprises 59/2020/QH14, an enterprise must ensure that at least one legal representative resides in Vietnam at all times. This is mandatory regardless of how many legal representatives the charter provides for.
2. Authorization checklist when the sole resident representative departs
When only one legal representative residing in Vietnam remains and that person exits the country, the enterprise must authorize in writing another individual residing in Vietnam to exercise the rights and perform the obligations of the legal representative (Article 12.3). Practical checklist:
- Form: must be in writing. The law prescribes no mandatory template — the company drafts it itself, but the document should clearly state the scope and term of authorization.
- Authorized person: must be an individual residing in Vietnam. Authorizing a non-resident does not satisfy the legal requirement.
- Liability: the legal representative remains liable for the exercise of the authorized rights and obligations — choose someone trustworthy, competent, and familiar with the business.
3. What happens when the authorization expires but the representative has not returned?
Article 12.4 distinguishes two cases:
- Private enterprises: the authorized person continues to act until the legal representative returns.
- Limited liability companies, joint stock companies, partnerships: the authorized person continues until the legal representative returns or a decision is made to appoint another person.
4. When authorization is no longer enough — a new representative must be appointed
If the legal representative is absent from Vietnam for more than 30 days without authorization, the company owner, Members Council or Board of Directors must appoint another person as legal representative (Article 12.5). The same applies when the representative dies, goes missing, faces criminal prosecution, is detained, is serving a prison sentence or administrative handling measure, loses or has restricted civil act capacity, or is prohibited by a court from holding the position.
Practical advice: for an indefinite long-term absence, the company should register a change of legal representative rather than repeatedly extending authorizations. Registration follows Article 43 of Decree 168/2025/ND-CP, with the provincial business registration authority processing within 03 working days.
5. Special cases
- Multiple legal representatives: if one departs while another still resides in Vietnam, written authorization is not mandatory.
- Two-or-more-member LLCs: the remaining member automatically becomes the legal representative in the Article 12.5 scenario (Article 12.6).
- Litigation: courts and competent procedural authorities may designate a legal representative to participate in proceedings (Article 12.7).
6. What is new from 01/7/2025
- Article 12 was amended by Law 76/2025/QH15 (Clause 3, Article 1), adding joint liability of legal representatives where the enterprise has multiple legal representatives for damage caused by breach of duties. Details of the amendment are being verified against the original text before full quotation.
- Article 13.2 was amended under Clause 4, Article 1 of Law 76/2025/QH15: the legal representative bears personal liability “in accordance with the law” for damage caused by breach of duties — extending to civil, administrative and criminal liability.
7. Risks of non-compliance
- Administrative fines: VND 20 to 30 million (for organizations; half for individuals) for failing to maintain a resident legal representative or failing to authorize in writing when the sole representative exits Vietnam (Article 51, Decree 122/2021/ND-CP). Note: the VND 10–15 million fine under Decree 50/2016/ND-CP is no longer in force (replaced from 01/01/2022).
- Transaction risk: contracts signed by an unauthorized person risk invalidity or disputes.
- Personal liability: the absent representative may still face joint liability for decisions made during the authorization period.
Frequently asked questions
How are the “more than 30 days” counted — consecutively or cumulatively? The Law on Enterprises does not define the counting method in detail. Companies should take a cautious approach and arrange authorization or replacement as soon as a long absence is planned.
Does authorizing an internal executive replace legal-representative authorization? Not fully. Internal management delegation and authorization to exercise the legal representative rights and obligations (external dealings with third parties) are distinct mechanisms. When only one resident representative remains and departs, written authorization under Article 12.3 is mandatory.
Is there a mandatory authorization template? No. The law prescribes no template; the company drafts its own document, stating the scope and term of authorization and identifying both parties.
Conclusion
Three key takeaways: (1) always maintain at least one legal representative residing in Vietnam; (2) when the sole resident representative departs, written authorization of a Vietnam-resident individual is mandatory; (3) absence beyond 30 days without authorization requires appointing a new representative. Companies whose leaders travel abroad frequently should add legal-representative status checks to their periodic compliance calendar.
Legal basis
- Law on Enterprises 59/2020/QH14 (effective 01/01/2021) — Article 12 (as amended by Law 76/2025/QH15), Article 13
- Law 76/2025/QH15 amending the Law on Enterprises (effective 01/7/2025)
- Decree 122/2021/ND-CP on administrative sanctions in planning and investment (effective 01/01/2022) — Article 51
- Decree 168/2025/ND-CP on enterprise registration (effective 01/7/2025) — Article 43
This article is for general reference only and does not constitute legal advice for any specific case.
Transparency note: This content was prepared with AI assistance and will undergo quality review by the FLAW AI Legal Council before publication approval; it is not legal advice from a human lawyer.
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