Corporate governance for foreign-invested companies
Corporate governance in Vietnam is set by the Law on Enterprises and by your company charter. The charter decides who may sign, how decisions are taken and how meetings run, so it is the first document to get right after incorporation. Many disputes and filing delays in foreign-invested companies come from a charter that copies a template and does not reflect how the group actually controls the Vietnamese entity.
Management structure by company type
| Company type | Required bodies | Practical notes |
|---|---|---|
| Single-member LLC owned by an organization | Either (a) Company Chairman and Director/General Director, or (b) Members’ Council and Director/General Director (Article 79) | The most common vehicle for a foreign parent. Model (a) is simpler; model (b) suits groups that appoint several authorized representatives. |
| Multi-member LLC | Members’ Council, Chairman of the Members’ Council, Director/General Director (Article 54) | Used for joint ventures with a small number of partners. Reserved matters and deadlock rules should be written into the charter. |
| Joint stock company | Either (a) General Meeting of Shareholders, Board of Directors, Supervisory Board and Director/General Director, or (b) General Meeting, Board of Directors with at least 20% independent members and an Audit Committee, and Director/General Director (Article 137) | Under model (a), a Supervisory Board is not mandatory where the company has fewer than 11 shareholders and institutional shareholders hold less than 50% of shares. |
What the charter should settle
Article 24 of the Law on Enterprises lists the minimum content of a charter. For a foreign-invested company, the points that matter most in practice are:
- The number of legal representatives, their titles and how authority is split between them.
- Matters reserved to the owner, Members’ Council or General Meeting, and any thresholds stricter than the statutory ones.
- Meeting, notice, quorum and voting rules, including written resolutions and online meetings.
- Approval of related-party contracts and transactions.
- Transfer restrictions, pre-emption rights and exit mechanics for joint ventures.
- Profit distribution and the order of priority for capital contributions.
Meetings, quorum and resolutions
The statutory defaults below apply unless the charter sets a different ratio where the law allows it.
| Body | Meetings and quorum | Passing a resolution |
|---|---|---|
| Members’ Council (multi-member LLC) | At least once a year (Article 55). Quorum: members holding 65% of charter capital; 50% at the second call; no minimum at the third (Article 58). | 65% of the capital of members attending; 75% for amending the charter, reorganization or dissolution, and selling assets worth 50% or more of total assets (Article 59). |
| General Meeting of Shareholders (JSC) | Annual meeting within 4 months of the financial year end, extendable to 6 months (Article 139). Quorum: over 50% of votes; 33% at the second call; no minimum at the third (Article 145). | Over 50% of votes of shareholders attending; 65% for share classes, changes of business lines, management structure, major investments or asset sales of 35% or more of total assets, reorganization or dissolution (Article 148). |
| Board of Directors (JSC) | At least once a quarter (Article 157). | Voting ratio as set by the charter. |
Legal representative and authorized representatives
Every company must always have at least one legal representative residing in Vietnam (Article 12). If the only resident legal representative leaves Vietnam, they must authorize another resident individual in writing. A foreign parent that owns the company acts through one or more authorized representatives, whose appointment should be documented and filed where required. See Legal representative.
Related-party transactions and records
Contracts between the company and its owners, managers or their related persons need prior approval by the competent body: Article 67 for multi-member LLCs and Article 167 for joint stock companies. Intra-group service fees, loans and royalties are common examples. Keep signed minutes, resolutions, the register of members or shareholders and the beneficial-owner information current, because banks, tax authorities and licensing bodies regularly ask for them.
Changing the charter capital, business lines, address or legal representative is a corporate change with its own filings. See Corporate changes: amendment matrix.