Do foreign-invested companies (FDI companies) have the power to operate an conduct business in industries such as labor and employment in Vietnam?

What are the conditions of operating within these business lines?

These are questions that quite a few foreign investors ask. Our following article will provide the basic provisions for the above issue.

Common business lines related to labor and employment within Vietnam

The Prime Minister issued Decision 27/2018/QD-TTg on July 6, 2018, which relevantly provides that the current main occupations in the field of labor and employment include the following business lines:

  • Industry code 7810: Activities of employment placement agencies;
  • Industry code 7820: Temporary employment agency activities;
  • Industry code 7830: Provision and management of human resources;

Currently, and with particular regard to the WTO Schedule of Commitments, Vietnam has not yet provided access conditions for business lines in the field of employment and labor. Thus, FDI companies that want to invest in these business lines need to comply with relevant Vietnamese laws.

Detailed conditions of each specific business line related to labor and employment service

Currently, except the service of provision of Vietnamese guest worker service FDI companies do not have the ability to invest and do business as Article 10 of the law on Vietnamese guest workers provides.

Regarding other business lines related to the field of labor and employment, there are no specific regulations allowing FDI companies to do business. There are however also relevant prohibitions to be aware of.  

FDI companies can fully invest in these business lines (except the service of provision of Vietnamese guest worker) if the foreign investors can justify their specific conditions for consideration of consent by competent authorities in the field of investment.

After the competent authorities approve investment for FDI companies these FDI companies must meet other conditions related to business lines related to the field of labor and employment such as: conditions of deposit, experience, qualifications of employees and relevant facilities.

After meeting the above conditions, Vietnamese companies in general, and FDI companies in particular need to carry out the necessary procedures to apply for sub-licenses such as: Employment service business license, Labor dispatch license.

Article 14 of Decree 23/2021/ND-CP provides the conditions for issuance of Employment service business license, including:

  1. Providing a premises for an employment service business’s main office, to organize employment service activities, which are owned or rented permanently by the business for a term of 3 years (36 months) or more.
  2. The business has already pledged 300,000,000 dong (Three hundred million dong, USD Equivalent) as a security deposit.
  3. The business’s legal representative must meet the following conditions:
  • They are the business’s executive in accordance with regulations of the Law on Enterprises;
  • They should not is not fall into the following situations: prosecuted for criminal liability; detained; serving imprisonment penalties; serving administrative penalties at compulsory detoxification establishments or compulsory education centers; fleeing from his/her place of residence; having restricted or lost capacity of performing civil acts; facing cognitive difficulties, problems in awareness and behavior control; banned by courts from holding certain posts or practicing certain occupations or doing certain jobs relating to employment services; and
  • Having a university degree or higher qualification or having been directly involved in professional or administrative tasks related to employment services, or rendering of employment services, for 02 years (24 months) or more, within 05 consecutive years before applying for the license.

Article 21 of Decree 145/2020/ND-CP provides the Conditions for issuance of Labor dispatch license (labor supply), including:

  • The legal representative of the dispatching agency shall:
  • be an enterprise executive as prescribed by the Law on Enterprises;
  • not have any criminal conviction;
  • have at least 03 years (36 months) of working in labor dispatch or labor supply in the last 05 years before the application for licensing is submitted.
  • The enterprise has paid a deposit of 2.000.000.000 VND (2 billion Vietnam dong, USD Equivalent).

Note, Vietnamese companies in general and FDI companies in particular are only allowed to provide the following jobs for labor outsourcing services (Appendix II to Decree No. 145/2020/ND-CP):

  1. Interpreter/Compile/Shortogram
  2. Secretary/Administrative Assistant
  3. Reception
  4. Travel Guide
  5. Sales support
  6. Project support
  7. Programming the production machine system
  8. Production and installation of television and telecommunications equipment
  9. Operation/inspection/repair of construction machinery, production power system
  10. Cleaning and sanitizing buildings and factories
  11. Document editing
  12. Bodyguard/Guard
  13. Marketing/Customer Care over the phone
  14. Handling financial and tax issues
  15. Repair/Check operation of cars
  16. Scan, draw industrial engineering/Interior decoration
  17. Driving
  18. Management, operation, maintenance and service on board ships
  19. Management, supervision, operation, repair, maintenance and service on oil and gas rigs
  20. Piloting, serving on board/Maintenance and repair of aircraft and aircraft equipment/Dispatch, flight operations/Flight supervision.

The above are the contents of analysis related to activities of foreign invested companies in the field of labor, employment. In order to ensure correct and sufficient understanding and exercise of rights and obligations in accordance with the law, do not forget to follow and update many other useful information on our website. Please contact us for more detailed instructions: letran@corporatecounsels.vn