Global Vietnam Lawyers is pleased to introduce an article by Lawyer Nguyen Kim Nhu titled “Electronic identification account for an enterprise – Can it become a “new-type seal”?”. This article was originally published in The Saigon Times, issue No.24-2025 (1.800) on June 12, 2025 and is shared here with permission from the publisher.
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Electronic identification accounts are a step forward in reforming administrative procedures and implementing national digital transformation. However, if enterprises are not proactive in internal governance, this tool can become a digitalized version of the “exclusive seal” of the past.
Abolishing the seal – a step forward in modernizing corporate governance
Before the 2014 Enterprise Law, Vietnamese enterprises operated under a centralized governance model, with a legal representative holding the sole corporate seal; all transaction documents of the enterprise must have the signature of the legal representative and be sealed. The combination of the mechanism of one legal representative and one seal has become a sticking point in modernizing corporate governance. In the absence of the legal representative or in case of his dismissal or removal without handing over the seal, almost all of the enterprise's operations are paralyzed.
The aforesaid status of "representative exclusivity" and "seal exclusivity" has been resolved when the Enterprise Law 2014 allows enterprises to have multiple legal representatives without limiting the form and number of seals. This is a big step forward in corporate governance from the model of one director (one legal representative) to a modern governance model: the Company is run by a board of management (many representatives) with the authority and responsibilities of each director clearly assigned. A few years later, the enterprise's transaction documents were digitized, no longer needing a seal, with the speed of enterprise transactions increased and operating costs decreased.
Electronic identification accounts - will they become a “new-type seal”?
From July 1, 2025, pursuant to Decree 69/2024/ND-CP, all administrative procedures of enterprises in Vietnam must be carried out through electronic identification accounts issued by the Ministry of Public Security. This is the only identification tool that completely replaces traditional accounts after June 30, 2025.
Unlike individuals who can be granted identification accounts with many levels of authentication, enterprises are only granted a single type of electronic identification account, synchronized across all administrative systems.
An electronic identification account is aimed at bringing convenience to transactions between enterprises and state agencies. But in reality, this account is often registered with the legal representative of the enterprise, and authenticated mainly through the electronic identification account application installed on the personal mobile device of the legal representative. Although the electronic identification account platform allows enterprises to add members and grant access rights to other members, account activation, granting rights, and revoking access rights still depend entirely on the will of the legal representative. This creates exclusive rights for the legal representative to activate, grant rights, revoke access rights, or work on the electronic identification account. This status potentially poses significant risks, especially when the individual holding the electronic identification account quits, is absent, refuses to cooperate, loses the ability to operate, or intentionally does not grant rights. The risk becomes even more serious if an internal dispute arises and the previous representative still holds the electronic identification account, making it impossible for the newly appointed person to use the system to exercise the rights and obligations of the enterprise. In such cases, the entire administrative and legal activities of the enterprise may fall into a state of “operational freeze”, is unable to pay taxes, apply for licenses, register changes to business information or fulfill obligations to the state.
We see the re-emergence of an exclusivity similar to the “representative exclusivity” and “seal exclusivity” of the past – mechanisms that the State and the Vietnamese business community spent many years eliminating.
Lessons from the past: tools are secondary, governance is the core factor
From a legal perspective, an electronic identification account is just an identification means without changing the nature of the right to representation. The current Enterprise Law neither prohibits an enterprise from having multiple representatives, nor limits the number of people who can use the identification account or access the system, or assign the right to use the identification code. Therefore, assigning full power to an individual is still the enterprise's choice, outside of a matter of legal regulations or the nature of the tool. Therefore, enterprises can apply an effective internal control mechanism by registering multiple representatives to jointly own an electronic identification account; in addition, formulating clear internal regulations on the assignment of approval, signing of documents, and data access; storing electronic system access information in a safe and transparent manner and having a transfer plan when necessary; contingency plans for emergency situations when there are personnel incidents, internal conflicts and more.
The application of electronic identification accounts is a step forward in reforming administrative procedures and implementing national digital transformation. However, if enterprises do not take the initiative to carry out internal management, this tool can become a digitalized version of the “seal exclusivity” of the past.
Therefore, the core still lies in the management mindset and design of the enterprise’s internal decision-making system. No tool – whether a traditional seal or a modern electronic identification account – can ensure smooth operations if the power continues to be concentrated in a single individual. It is time for businesses – especially private businesses – to take a serious look at establishing a modern, controlled and transparent governance model, preventing risks and staying harmless from the consequences of power concentration. Technology is just a means, management is the deciding factor in whether a business can truly enter the digital age safely, effectively and sustainably.