May a Branch Head Concurrently Head Another Trader’s Representative Office?

May the head of a Branch of a foreign trader concurrently serve as the head of a Representative Office of another foreign trader?

Concurrent holding of positions by the head of a Branch of a foreign trader is prescribed in Clause 6, Article 33 of Decree 07/2016/ND-CP as follows:

Heads of Representative Offices and Branches

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6. The head of a Representative Office of a foreign trader may not concurrently hold the following positions:

a) Head of a Branch of the same foreign trader;

b) Head of a Branch of another foreign trader;

c) Legal representative of that foreign trader or of another foreign trader;

d) Legal representative of an economic organization established under Vietnamese law.

7. Where the head of a Representative Office is authorized by the foreign trader to enter into contracts, amend or supplement contracts already entered into, the foreign trader must grant written authorization for each contract conclusion, amendment or supplementation of contracts already entered into.

8. The head of a Branch of a foreign trader may not concurrently hold the following positions:

a) Head of a Representative Office of another foreign trader;

b) Head of a Representative Office of the same foreign trader;

c) Legal representative of an economic organization established under Vietnamese law.

Under the above regulations, the head of a Branch of a foreign trader may not concurrently hold the following positions:

(1) Head of a Representative Office of another foreign trader;

(2) Head of a Representative Office of the same foreign trader;

(3) Legal representative of an economic organization established under Vietnamese law.

Thus, the head of a Branch of a foreign trader may not concurrently serve as the head of a Representative Office of another foreign trader.

When a foreign trader changes the head of its Branch, must it carry out procedures to adjust the License for the establishment of the Branch?

The change of the head of a Branch by a foreign trader is prescribed in Clause 1, Article 15 of Decree 07/2016/ND-CP  as follows:

Cases of adjustment of Licenses for the establishment of Representative Offices and Branches

Foreign traders must carry out procedures to adjust Licenses for the establishment of Representative Offices and Branches in the following cases:

1. Change of the name or head office address of the foreign trader.

2. Change of the operating contents of the foreign trader directly related to the operating contents of the Branch in Vietnam.

3. Change of the head of the Representative Office or Branch.

4. Change of the name of the Representative Office or Branch.

5. Change of the operating contents of the Representative Office or Branch.

6. Change of the head office address of the Representative Office within a centrally-run province or city or within a geographical area under the management of a Management Board.

7. Change of the head office address of the Branch.

Thus, under the regulations, where a foreign trader changes the head of its Branch, it must carry out procedures to adjust the License for the establishment of the Branch.

What matters is the head of a Branch responsible for to the foreign trader?

The responsibilities of the head of a Branch are prescribed in Clause 1, Article 33 of Decree 07/2016/ND-CP as follows:

Heads of Representative Offices and Branches

1. The head of a Representative Office or Branch shall be responsible to the foreign trader for his/her activities and those of the Representative Office or Branch within the scope authorized by the foreign trader.

2. The head of a Representative Office or Branch shall be responsible for his/her activities where such activities are performed beyond the scope authorized by the foreign trader.

3. The head of a Representative Office or Branch must authorize in writing another person to perform the rights and obligations of the head of the Representative Office or Branch in accordance with the law when leaving Vietnam. Such authorization must be approved by the foreign trader. The head of the Representative Office or Branch remains responsible for the performance of the authorized rights and obligations.

Thus, under the regulations, the head of a Branch shall be responsible to the foreign trader for his/her activities and those of the Branch within the scope authorized by the foreign trader.

At the same time, the head of a Branch shall be responsible for his/her activities where such activities are performed beyond the scope authorized by the foreign trader.