Must the Director of a Single-Member LLC Sign a Labor Contract in Vietnam?

Whether the Director of a single-member limited liability company must sign a labor contract with the company depends on the capacity of the person serving as Director: if the Director is hired to manage (not the owner, not a capital contributor), a labor contract must be signed; if the Director is also the company owner or is appointed as an enterprise manager under the charter, the relationship is a management relationship, not a labor relationship. This article analyzes both cases under the Law on Enterprises 2020 (as amended by Law No. 76/2025/QH15) and the Labor Code 2019.

1. How is the Director of a single-member LLC regulated?

Under the Law on Enterprises 2020, the Director/General Director of a single-member LLC is the person managing day-to-day business operations, appointed and dismissed by the Members’ Council or the Company President in accordance with the company charter. The Director may be the company owner, a person designated by the owner, or a person hired from outside. Regarding salary and remuneration: under Article 84 of the Law on Enterprises 2020, the company decides the salary, remuneration, and bonuses of managers in accordance with the charter and internal regulations.

2. Cases where a labor contract must be signed

When the Director is a hired person (not the owner, not a capital contributor), a labor relationship exists between the Director and the company: the Director works under the management of the owner/Members’ Council and receives a salary. In this case, a labor contract must be concluded under the Labor Code 2019, possibly together with a decision appointing the Director position. Social insurance, health insurance, and unemployment insurance regimes apply as for ordinary employees.

3. Cases where no labor contract is required

When the Director is also the company owner (an individual owning a single-member LLC) or is designated by an organizational owner as a representative or manager under the charter, this is an enterprise management relationship, not a labor relationship — there is no obligation to sign a labor contract with oneself. The Director’s income in this case is the salary and remuneration of a manager under Article 84 of the Law on Enterprises 2020, as decided by the company. Note: compulsory social insurance participation for enterprise managers is carried out in accordance with current social insurance legislation (Law on Social Insurance 2024).

Notes on applying current legal provisions

This article is presented for reference purposes, helping readers understand the legal issue at a general level. Determining whether the relationship is a labor or management relationship depends on the company charter, the appointment decision, and actual management practice. Note: where an appointed manager (e.g., a hired Director) also signs a labor contract, the two relationships coexist in parallel — the management relationship governs management rights and obligations under the Law on Enterprises and the charter; the labor relationship governs salary, social insurance, and contract termination under the Labor Code. Where you need an accurate determination for your company, please contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to watch for

• Giving a blanket “must sign” or “need not sign” answer for all cases.
• Failing to distinguish an appointed management position from a labor relationship.
• A hired Director without a labor contract, lacking a basis for insurance contributions.
• An owner signing a labor contract with themselves, creating an invalid dossier.

How can ANT Legal help?

ANT Legal assists in reviewing charters, advising on management position structures, and completing labor and appointment dossiers in compliance with regulations. For prompt advice, please contact our lawyers at 0966.475.966.

Frequently asked questions

Must the Director of a single-member LLC sign a labor contract?
It depends on the capacity of the person serving as Director: if the Director is hired to manage (not the owner, not a capital contributor), a labor contract must be signed under the Labor Code 2019; if the Director is also the company owner or is appointed as an enterprise manager under the charter, the relationship is a management relationship, not a labor relationship.

May a hired Director participate in social insurance?
Yes. Social insurance, health insurance, and unemployment insurance regimes apply as for ordinary employees; compulsory social insurance participation for enterprise managers is carried out in accordance with current social insurance legislation (Law on Social Insurance 2024).

May a company owner sign a labor contract with themselves?
They should not — an owner signing a labor contract with themselves creates an invalid dossier; the relationship is an enterprise management relationship, and income is the manager’s salary and remuneration under Article 84 of the Law on Enterprises 2020, as decided by the company.

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