When foreign investors want to establish a company or expand their operations in Vietnam, the condition is that they need to appoint an individual as the Nominee Director. However, they do not always find suitable candidates for the position of director in Vietnam. At this time, using the Nominated Director service is the optimal solution. So what is a Nominee Director? Roles and responsibilities of the nominated director in the business? Let’s find out through the following article!
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What is a Nominee Director?
The nominee director is an individual appointed by the company as a local director in case foreign investors want to establish a company or expand their existing operations to Vietnam.
A Nominee Director is not considered an ordinary corporate director. In most cases, the Nominated Director will not have executive power over decisions within the company. However, Nominated Directors are allowed to monitor standards within the company they are working for to report any illegal activity and ensure that the company is operating within the law.
Roles and responsibilities of a Nominee Director
Nominee directors are not required to be present in all organizations in every country. They are only required in certain countries and can be appointed for short or long term.
Many companies that expand internationally have been fortunate enough to have an insider who can fill this role. However, many others do not have employees at the leadership level who can take on these tasks. In such cases, the nominated Director will be the best and most suitable choice for the company to fill this internal gap.
- The main task of the Nominee Director is to ensure that the company they are working for is in compliance with the law.
- Besides that, they also perform other duties similar to a regular corporate director, ensure corporate governance and apply best practices for corporate social responsibility.
- The nominee director of a company is an important person in the company. He or she has to be well-informed about all the projects and tasks that are going on in the company. The director also has to be able to communicate with other people in the company and communicate effectively with them.
- The nominee director is a person who is selected by the management to be the supervisor of a certain department. He or she has to take care of the employees and make sure that they are performing their duties.
A nominated Director may have little or no powers. Even so, they are still responsible for the decisions the company makes. As a result, the nominated Directors are allowed to have complete transparency of all company activities, so that they can report any illegal activities.
Requirements of a Nominee Director
According to the provisions of the Enterprise Law 2020 and other relevant laws, the conditions for becoming a nominated director are as follows:
- Being an individual residing in Vietnam or a Vietnamese citizen.
- Not holding the position of director or general director in a state-owned enterprise.
- Has full capacity for civil acts and is not prohibited from managing an enterprise under the Enterprise Law 2020.
- Not subject to being in the process of executing a judgment or waiting for a court ruling.
- Professional qualifications and experience in business administration.
- If companies conduct business activities with conditions that require the Director to meet additional conditions, the Designated Director must also meet those conditions.
Benefits of using the Nominee Director service
To start a business or expand operations in Vietnam, foreign investors choose the Nominee Director service. This is because the service brings many benefits to businesses as follows:
- With just a reasonable cost, businesses were able to save time and simplify the company establishment process.
- Limit the risk compared to hiring a Nominee Director yourself. Because they can abuse their positions to embezzle company assets or cause significant damage.
- Obtain commitment from the service provider against any abuse or non-compliance with their Designated Director’s obligations under the Contract.
- Enterprises do not have to worry too much about whether the nominated director has properly performed his or her obligations because this is the responsibility of the service provider.
- Meeting the needs of foreign investors when they want to remain anonymous on the Certificate of Business Registration.
Nominee Director Service at LTS LAW
If you are a foreign investor who is intending to establish a company in Vietnam and do not know how to register a company. Contact LTS LAW immediately for the best support from a team of consultants. Here we provide the Nominee Director service for investors who want to penetrate Vietnam but do not want to appear on legal papers. LTS LAW is committed to the best service quality and cost.
The nominee director plays an important role in supervising and managing the activities of foreign enterprises in Vietnam. Therefore, you need to research carefully before hiring a Nominated Director to meet the legal requirements. Hope this article has provided you with the most useful information!
