Conditions for foreign investors to operate in employment services in Vietnam

In the context of Vietnam’s economy increasingly deep integration into the global economy, the demand for connecting labor supply and demand between businesses and employees is constantly rising, leading to the strong development of employment services. For foreign investors wishing to conduct employment service in Vietnam, full compliance with legal regulations regarding investment conditions and licensing is a mandatory requirement. The article below specifically analyzes the conditions that foreign investors need to meet to operate in this sector. 

1. About industry and business 

According to the WTO commitments, the business sector related to employment services, human resource supply and placement is a business line that Vietnam has not committed to opening the market to foreign investors.  

However, except for business line on the List of industries and occupations with restricted market access for foreign investors specified in Appendix I of Decree 31/2021/ND-CP, foreign investors are allowed to access the market as prescribed for domestic investors(1). The employment service is not on the List of prohibited business sectors or industries with restricted market access for foreign investors. Therefore, foreign investors wishing to invest in these business lines must comply with the provisions of relevant Vietnamese laws and explain their capacity when submitting applications for licenses to Vietnamese state agencies. 

According to Decision 27/2018/QD-TTg on promulgating the system of economic sectors in Vietnam, Investors can register the following sectors and occupations to conduct business: 

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

According to Appendix IV of the Investment Law 2020, employment services is a conditional business line. Therefore, investors need to meet the conditions under Vietnamese law before officially operating in this line of business. 

In fact, many foreign investors have been issued Investment Registration Certificates when registering to operate in Ho Chi Minh City for this business line. 

2. Conditions for granting a license to operate employment services 

After establishment, enterprises wishing to apply for a license to operate employment services must meet the following conditions: 

  • Having a location for its headquarters or branch to organize employment service activities, which is owned by the enterprise or is rented stably by the enterprise under a contract of 03 years or more; 
  • The enterprise has made a deposit of VND 300,000,000; 
  • The legal representative of an enterprise providing employment service must satisfy the following conditions: 
  • Being the enterprise manager in accordance with Law on Enterprises; 
  • Not falling into one of the following cases: being examined for penal liability, being held in custody, serving prison sentences, serving administrative sanction at compulsory detoxification establishments or compulsory education establishments, fleeing the residence places, being limited or lost capacity for civil acts, having difficulties in cognition or behavior control, being banned by the Court from holding certain positions, practicing professions or doing jobs related to employment service; 
  • Having a university degree or higher or directly worked as a professional worker or managed employment services or labor supply for 02 years or more within the previous 05 years before applying for license.(2) 

(1) Clause 1, Article 17 of Decree 31/2021/ND-CP dated March 26, 2021 on detailed regulations and instructions for the implementation of a number of articles of the Investment Law.

(2) Article 14 of Decree 23/2021/ND-CP dated March 19, 2021 on detailed regulations of Clause 3, Article 37 and Article 39 of the Law on Employment on employment service centers and employment service enterprises.

 

Disclaimers:

This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.

For issues related to the content or intellectual property rights of the article, please email cs@apolatlegal.vn.

Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to Business and Investment and contact our team of lawyers in Vietnam via email info@apolatlegal.com.



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