How Is a Single-Member LLC Organized and Managed in Vietnam?

Can anyone establish and manage an enterprise in Vietnam?

Under Article 17 of the Law on Enterprises 2020 on the right to establish, contribute capital, purchase shares, purchase contributed capital and manage enterprises, as follows:

“1. Organizations and individuals have the right to establish and manage enterprises in Vietnam in accordance with this Law, except for the cases provided in Clause 2 of this Article.

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2. The following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:

a) State agencies and people’s armed forces units using state assets to establish enterprises for their own profit;

b) Cadres, civil servants and public employees under the Law on Cadres and Civil Servants and the Law on Public Employees, except where implemented in accordance with laws on science, technology, innovation and national digital transformation;

Update note: point b, Clause 2, Article 17 above has been amended by Law No. 76/2025/QH15 (effective from 01/07/2025), adding an exception for cases implemented in accordance with laws on science, technology, innovation and national digital transformation.

c) Officers, non-commissioned officers, professional soldiers, defense workers and employees in agencies and units of the Vietnam People’s Army; professional officers, non-commissioned officers and police workers in agencies and units of the Vietnam People’s Public Security, except persons appointed as authorized representatives to manage the State’s capital contribution in enterprises or to manage state-owned enterprises;

d) Managerial and professional leaders in state-owned enterprises as provided in point a, Clause 1, Article 88 of this Law, except persons appointed as authorized representatives to manage the State’s capital contribution in other enterprises;

đ) Minors; persons with limited civil act capacity; persons who have lost civil act capacity; persons with difficulties in cognition and behavior control; organizations without legal person status;

e) Persons being prosecuted for criminal liability, being held in temporary detention, serving prison sentences, serving administrative handling measures at compulsory drug rehabilitation facilities or compulsory education facilities, or being prohibited by a Court from holding positions, practicing a profession or performing certain jobs; other cases as provided in the Law on Bankruptcy and the Law on Anti-Corruption.

Where the business registration authority so requests, the enterprise founder must submit a judicial record card to the business registration authority;

g) Organizations that are commercial legal persons prohibited from doing business or operating in certain fields under the Penal Code.

The Law on Enterprises allows individuals and organizations to establish enterprises in Vietnam; these subjects have the right to participate in enterprise legal relations, with equal rights and obligations as recognized in the law.

However, not everyone may establish and manage enterprises in Vietnam, because the law also restricts the right to establish and manage enterprises in certain specific cases as stated, to ensure the interests of the enterprise as well as other interests when participating in enterprise legal relations.

What conditions must the owner of a single-member limited liability company satisfy?

Under Clause 25, Article 4 of the Law on Enterprises 2020: “An enterprise founder is an individual or organization that establishes or contributes capital to establish an enterprise.”

Under Clause 24, Article 4 of the Law on Enterprises 2020: “An enterprise manager is a manager of a private enterprise and a manager of a company, including the private enterprise owner, general partners, Chairman of the Members’ Council, members of the Members’ Council, Company Chairman, Chairman of the Board of Directors, members of the Board of Directors, Director or General Director and individuals holding other managerial titles as provided in the company charter.”

And under Clause 1, Article 74 of the Law on Enterprises 2020: “A single-member limited liability company is an enterprise owned by one organization or one individual (hereinafter referred to as the company owner). The company owner is liable for the debts and other property obligations of the company within the amount of the company’s charter capital.”

Accordingly, the owner of a single-member limited liability company must satisfy the conditions stated above, provided in Article 17 of the Law on Enterprises 2020 on the right to establish, contribute capital, purchase shares, purchase contributed capital and manage enterprises, as well as the specific provisions on single-member limited liability companies.

How is the management model of a single-member limited liability company owned by an organization regulated?

Article 79 of the Law on Enterprises 2020 provides that a single-member limited liability company owned by an organization is organized, managed and operates under one of the following two models:

– Company Chairman, Director or General Director;

– Members’ Council, Director or General Director.

For a company whose owner is a state-owned enterprise under the Law on Enterprises, a Board of Controllers must be established; in other cases, the company decides.

The organizational structure, working regime, standards, conditions, dismissal, removal, rights, obligations and responsibilities of the Board of Controllers and Controllers are carried out accordingly under this Law.

The company must have at least one legal representative who holds one of the titles of Chairman of the Members’ Council, Company Chairman, or Director or General Director.

Where the company charter does not provide, the Chairman of the Members’ Council or the Company Chairman is the legal representative of the company. Where the company charter provides no otherwise, the organizational structure, operation, functions, rights and obligations of the Members’ Council, the Company Chairman, and the Director or General Director are carried out in accordance with regulations.

The management organizational structure of a single-member limited liability company, whether owned by an organization or an individual, has different provisions suited to each type of subject. This meets the needs of business owners while ensuring the operation of the organization when it becomes the owner of an enterprise. In this way, the organization can both exercise its rights and ensure compliance with principles of law.