REPORT THE DEMAND TO USE FOREIGN WORKERS IN VIETNAM

In order to manage the usage of foreign workers in Vietnam, the Vietnam state authority has requested employers to provide explanation for such need to use foreign workers.

This will be the preliminary procedure before applying for work permit in Vietnam then temporary residence card in Vietnam for foreigners.  The report of demand to use of foreign workers has to meet the following requirements:

Demand to use foreign workers: The employer (except contractors) is responsible for determining the demand to use foreign employees for each position that the Vietnamese employee has not met the requirement and submit written explanation. In case the employer is a contractor, in the bidding documents, it is required to declare the number, qualifications, professional competence and experience of foreign workers mobilized to implement bidding packages.

Recipient: Chairman of People’s Committees of provinces and cities under central authority (hereinafter referred to as the provincial People’s Committee) where the employer is headquartered.

Periodic notification period: Every year, the employer (except contractor) is responsible for determining the demand to use foreign employees for explanation.

The period of notice for the first time: Before at least 30 days from the date the employer (except contractor) plans to recruit foreign employees, the employer must report explanations as provided in Paragraph 1 Article 4 of Decree No. 102/2013 / ND-CP on the demand to use foreign workers, including work position, number, qualifications, experience, salary, working hours and submit directly to the Department of Labour – Invalids and Social Affairs of provinces and cities under central authority (hereinafter referred to as the Department of Labor – Invalids and Social Affairs) where the employer is headquartered.

The period of notice the adjustment: The employer whom is approved to use foreign employees, that have changes in the demand for foreign workers, has to directly submit the report explaining the adjustment and supplementation at least 30 days before the expected day for new recruitment, additional recruitment or recruitment to replace foreign workers with the Department of Labour – Invalids and Social Affairs where the employer is headquartered.

ANT Lawyers will be available to assist the clients when required dealing with the employment matters for foreign workers in Vietnam.

For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 8 3520 2779.  To learn more about us, please visit www.antlawyers.vn.  

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice.  We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions.  The firm provides a range of legal services as following to multinational and domestic clients.

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WHAT TRANS-PACIFIC PARTNERSHIP AGREEMENT IS ABOUT?

On Jul 31st, 2015 the Trans-Pacific Partnership (TPP) negotiation ended without a resolution although a great progress has been made. The sad thing is that “they finished the part of the agreement that would raise environmental standards in Vietnam, Malaysia and the other countries in the bloc” according to The Wall Street Journal. It is expected the deal will continue to be worked on in the upcoming future meeting.

US, Japan, Vietnam and 9 other countries hoped to complete the signing of TPP in 2015. If successful, TPP is expected to be a major event occurred to Vietnam in 20 years (from the time Vietnam and the United States decided to normalize relations in 1995).

1. TPP is a free trade agreement between 12 countries with the aim of promoting economic integration in Asia – Pacific area. Twelve members of TPP include Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, Vietnam, the USA and Japan. South Korea, Colombia, Costa Rica, Indonesia, Taiwan, Thailand and many other countries are planning to participate in TPP. Originally, TPP started from an agreement among Singapore, Chile, New Zealand and Brunei in 2009, before the United States decided to join and lead.

2. The main objectives of TPP are the elimination of taxes and barriers for goods and trading services between member countries.

3. In addition, TPP will also unify laws, common rules between countries, such as intellectual property, food quality or work safety.

4. The current members of TPP accounted for 40% of the world GDP and 26% of global merchandise trade.

5. The United States expects the TPP will be the key point of their new destination in Asia. China has sometimes expressed their intention to join the TPP, but many of TPP’s current provision seem to be designed not to let China have the opportunity to participate in this agreement.

6. TPP is expected to set out the international rules that transcend the scope of the WTO, such as investment policies, protect intellectual property rights, control of state companies, and the quality of product and labor.

7. TPP is expected to create international laws capable of adjusting the policies and directions of the law in each member countries. In other words, the laws of the member countries will have to follow the orientation of the TPP. Many laws in TPP also influence the changes of the legal regime of the country. For example is the legislation to encourage the members of the TPP to open a government agency, with mechanism and the way to work like in the US to perform strengths-weaknesses analysis before issuing new domestic laws.

8. TPP includes 29 chapters, in which there are only 5 chapters are directly related to the issue of exchange of goods and services, the remaining chapters addressed many issues related to different benchmarks, standards about environment, labor quality, financial rules, food and medicine. TPP will remove many benefits of state companies which is currently playing a big role in i.e. Vietnam economy, to create competitive opportunities for private companies.

9. With TPP, foreign and international companies, corporations will be able to bring the government of the member country to TPP’s special court when these countries pose the rules that go against the norms of the TPP. This special court has full authority to make the government to compensate for damage not only occurred, but also the loss of opportunities in the future of international corporations, companies.

10. The TPP members have to sign non-disclosure agreement in the detailed negotiation process about the rules of TPP. These countries may only disclose information to government agencies, organizations, and individuals that are directly related to trade policy advisory.

For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 8 3520 2779.  To learn more about us, please visit www.antlawyers.vn.  

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice.  We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions.  The firm provides a range of legal services as following to multinational and domestic clients.

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HOW TO PREPARE AND FILE A LAWSUIT IN VIETNAM?

If two parties have a dispute over a commercial matter in Vietnam, they should try to resolve disputes through negotiation, or mediation before considering to file a lawsuit against the other at a court in Vietnam.

To implement their right to sue, the plaintiff must prepare and submit the claim at the competent court in Vietnam.  The dispute lawyers in Vietnam with experience and understanding the litigation process should be invited at the early stage to advise, represent and prepare to defend the client.  The claim filing should include the petition and the supporting documents.  The petition is the most important legal document for the court to review and resolve the claim of the plaintiff, as such it should be carefully prepared to meet the requirements of the form, authority, and further contain information about the plaintiff, defendant, summary of the case and the request of the plaintiff.

The contents of the petition must be presented in full, brief, clear, and in logic.  The plaintiff should provide all documents, and evidence to prove the merit of the claim including contract, purchase order, separate terms and conditions, appendixes (if any), minutes of meetings of negotiations, invoices, delivery proof, legal status of plaintiff and defendant, documents to determine the legal status of the representative of the plaintiff such as appointment decision, power of attorney.  In order for the document issued in foreign country to be valid in Vietnam, the documents presented have to be original or notarized, legalized and authenticated copy and translated into Vietnamese in accordance with Vietnam laws.

When the claim has been filed at the competent court in Vietnam provided all conditions of acceptance are met, the court will notify the plaintiff or its representative know the court fees. When the applicant advance the court fee, the case will be recorded and brought into the process for settlement.

At the trial preparation process, the case will be assigned to a judge whom after studying would request parties to present additional necessary papers and documents relating to the case.  Parties or their representative would then be requested to meet the judge to provide further information or testimony or attend reconciliation.  If the disputing parties resolve disputes with each other, the court will make a record to acknowledge the successful reconciliation and issue the decision to recognize the agreement of the parties. Where reconciliation fails, the court records that and shall issue the decision to bring the case to trial.

Disagreements or disputes arise when parties can not agree on issues related to contract provisions, expected outcome or performance starndards…There are cases when the dispute is over a debt obligations matters which a debt recovery law firm could assist at an early stage to manage the collection process pre litigations including negotitions and managing expectations of both sides.    

ANT Lawyers, a law firm in Vietnam will be available to assist the clients when required to handle dispute matters out of court, at court or through arbitration in Vietnam.  

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NOTABLE IMPROVEMENTS IN VIETNAM INVESTMENT LAW

Vietnam Investment Law 2014 taking effect from July 1st, 2015, replaces the Investment Law 2005 with notable improvements, especially the provisions on business registration in investment projects which foreign investors making investment in Vietnam or setting up business in Vietnam are welcome.

The new Vietnam Investment Law in 2014 has brought up the concept of “business investments” to replace the previous two concepts as “direct investment” and “indirect investment”.

Under the Investment Law 2005, prohibited investment sectors are generally and broadly defined i.e. detrimental to defense and security, national interests which are vague concepts subject to arbitrary explanation of the Vietnam State authorities. The prohibited business activities in the new regulations are listed down specifically.  This change has been considered as a huge development which confirm that the foreign investors have the right to conduct investment in Vietnam in the segments not prohibited by law.  The new law specifies 267 conditional investment areas which clearly define the restrictions in one document instead of referring to various laws.  This shall also avoid different interpretations of the legal enforcement and application of the laws in Vietnam.

According to the Vietnam Investment Law 2005, regardless of the proportion of foreign invested capital, all projects involving foreign ownership are subject to investment certificate. Under the new law, only the projects of foreign investors or enterprises with foreign investment capital contributed 51% of charter capital or more must apply for new registration certificate for the project investment of foreign investment. This is a big step to attract and encourage investment for foreign investors investing in Vietnam through reducing the amount of administrative formalities which foreign investors had to go through.

ANT Lawyers will be available to assist the clients when required dealing with the incorporation and post-licensing in Vietnam.

For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 8 3520 2779.  To learn more about us, please visit www.antlawyers.vn.  

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice.  We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions.  The firm provides a range of legal services as following to multinational and domestic clients.

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WHICH FORM OF INVESTMENT – BRANCH OR COMPANY?

Foreign entities can set-up company or branch offices in Vietnam to carry out business activities.

There are several main different aspects between opening a branch office or establishing a foreign owned company in Vietnam.

1. Conditions

• Permits for establishment of Vietnam-based branches of foreign enterprise shall each have a valid term of five years.
• Foreign enterprise must choose between establishing a 100% foreign capital enterprise or forming a joint-venture with domestic investor or company.

2. Certificate

• The Branch office needs to apply and obtain the operation license of a Branch;
• A foreign owned company will need to apply and obtain the investment certificate (“IC”) to operate in Vietnam.

3. Capital

• Optional, foreign entity will decide how much money to invest in branch. The allocation capital for branch is capital for the subordinate units.
• Mandatory, foreign entity will need to provide minimum capital as required by Vietnam Law in conditional investment area.

4. Obligation of owner

• For branch office in Vietnam, owner takes full responsibility;
• For company, owner takes responsibility within the capital contributed into the company in Vietnam;

5. Other matters

• For branch office setting up in Vietnam, the procedure is less complicated compared to those for the establishment of a 100% foreign owned company;  the branch office is able to carry out trading and some other activities as stipulated by Vietnam laws and the WTO commitments which Vietnam enters.  The business lines of a branch have to be aligned with the business lines of the headquarter of the foreign entity.
• Setting up foreign owned company would be more complicated than the setting up of the branch office, however this form of investment has more flexibility and freedom as it is a stand alone Vietnam entity recognized under Vietnam laws.

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WHICH AUTHORITY APPROVES BUSINESS SETTING UP IN VIETNAM?

Investment projects in Vietnam could be evaluated and approved for business setting-up at top level of the government, at ministerial levels or at the provincial levels.

The licensing authorities for business setting up in Vietnam has been divided to distribute workloads at different state agencies with aim to speed up the process and attract more quality investment projects in Vietnam.

In practice, the process for establishing companies or executing investment projects in Vietnam would take from one month for simple project, three to six month for areas categorized under conditional investment areas, requiring sub-licenses, or additional time for more complicated projects.  At the provincial levels, there might be inconsistency between cities and provinces due to different interpretation of laws.  For investment project with difficulty to manage, the provincial levels would need to consult with technical department of central government agencies, as such the time taken to process the investment certificate would be lengthen.

Understanding the mechanism and the work division of Vietnam authorities that evaluate and approve business licensing at different government agencies would help foreign investors to smoothen the process and improve their experience in Vietnam.

It is notable that, the government level will be focusing on significant projects, in special area at large investment capital with impact on social economic situations.  Most of the investment licensing procedures will be carried out at the provincial levels where the investment projects exist.

The following will point out directions for foreigners to approach respective agencies based on the particular area of interests, scale, and nature of the investment.  However, to avoid delay and increase effectiveness, it is advisable that the foreign clients would consult with Vietnam law firms to help advise and represent them in preparing and executing the investment in Vietnam.

I. Projects evaluated and granted investment licensing at government level

Depending on the business nature, industry sector, investment scale, and investment policy, the Vietnam Prime Minister, on behalf of the government will evaluate and approve investment licensing for setting up business.

1. The investment project in Vietnam the government will evaluate and approve regardless of funding, the scale of investment are in the following areas:

a) Development and commercialization of airports and air transport;
b) Development and commercialization of national port;
c) Exploration, mining and processing of oil and gas; exploration and exploitation of minerals;
d) Radio, television;
e) Casino;
f) Production of cigarettes;
g) Establishment of university level educational institute;
h) Establishment of industrial zones, export processing zones, high-tech zones and economic zones.

2. Although investment projects which do not fall under the cases listed above, but the government of Vietnam also evaluates and approves investment project with investment capital of VND 1,500 billion (around USD 75 mil) upwards regardless of funding and in the following areas:

a) Sales of electricity, mineral processing, metallurgical;
b) Construction of railway infrastructure, roads, inland waterways;
c) Production, sales of wine and beer.

3. Further, the government of Vietnam also evaluates and approve investment projects with foreign investment in the following areas:

a) Maritime transport;
b) Establishment of networks and provision of postal services, courier, telecommunication and internet; network setup and signal transmission;
c) Printing and distribution of newspapers; publication;
d) Establishment of independent scientific research.

4. Where the investment projects specified in the above cases are in the plan which the Prime Minister has approved or authorized other agencies to approve, and that the investment projects meet the conditions prescribed by law and treaties to which Vietnam Nam is a member, the agency granted investment certificates perform the procedure for issuance of investment certificates is not required to submit to the Prime Minister to decide on the investment policy.

5. Where the investment projects specified in the above case is not in the plan which has been approved by the Vietnam Prime Minister or authorized other agency to approve, and that the projects do not meet the conditions for market access provisions in international treaties which Vietnam is a member, the agency granted investment certificates shall consult with other of relevant industries and submit to the Prime Minister for investment policy decision.

II. Projects evaluated and granted investment licensing at ministerial level

1. The Vietnam Ministry of Planning and Investment shall evaluate and approve licensing for investment projects in the form of BOT, BTO, BT.

2. Other ministries will be evaluating and granting license for investment in some sectors.

a.Vietnam Ministry of Commerce and Industry shall evaluate and approve licensing for investment project in oil and gas sector;

b. Vietnam State Bank shall grant licensing for financial institutions;

c. Vietnam Ministry of Finance shall be responsible for issuing license for investment project of insurance business.

III. Projects evaluated and granted investment licensing at provincial levels

1. Department of Planning and Investment shall be the single point of contact that receive the application and evaluate the investment plan of the foreign investors wishing to establish business in Vietnam for projects

a. Outside of Industrial Zone, Industrial Processing Zone;

b. Infrastructure development project for Industrial Zone, Industrial Processing Zone which management board of industrial zone and industrial processing zone are not yet established.

2. The management board of Industrial Zone, and Industrial Processing Zone:

a. For investment projects within the Industrial Zone, and Industrial Processing Zone which are not under the authority of the Prime Minister;

b. Infrastructure development project to for industrial zone and industrial processing zone.

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REPORT THE DEMAND TO USE FOREIGN WORKERS IN VIETNAM

In order to manage the usage of foreign workers in Vietnam, the Vietnam state authority has requested employers to provide explanation for such need to use foreign workers.

This will be the preliminary procedure before applying for work permit in Vietnam then temporary residence card in Vietnam for foreigners.  The report of demand to use of foreign workers has to meet the following requirements:

Demand to use foreign workers: The employer (except contractors) is responsible for determining the demand to use foreign employees for each position that the Vietnamese employee has not met the requirement and submit written explanation. In case the employer is a contractor, in the bidding documents, it is required to declare the number, qualifications, professional competence and experience of foreign workers mobilized to implement bidding packages.

Recipient: Chairman of People’s Committees of provinces and cities under central authority (hereinafter referred to as the provincial People’s Committee) where the employer is headquartered.

Periodic notification period: Every year, the employer (except contractor) is responsible for determining the demand to use foreign employees for explanation.

The period of notice for the first time: Before at least 30 days from the date the employer (except contractor) plans to recruit foreign employees, the employer must report explanations as provided in Paragraph 1 Article 4 of Decree No. 102/2013 / ND-CP on the demand to use foreign workers, including work position, number, qualifications, experience, salary, working hours and submit directly to the Department of Labour – Invalids and Social Affairs of provinces and cities under central authority (hereinafter referred to as the Department of Labor – Invalids and Social Affairs) where the employer is headquartered.

The period of notice the adjustment: The employer whom is approved to use foreign employees, that have changes in the demand for foreign workers, has to directly submit the report explaining the adjustment and supplementation at least 30 days before the expected day for new recruitment, additional recruitment or recruitment to replace foreign workers with the Department of Labour – Invalids and Social Affairs where the employer is headquartered.

ANT Lawyers will be available to assist the clients when required dealing with the employment matters for foreign workers in Vietnam.

For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 8 3520 2779.  To learn more about us, please visit www.antlawyers.vn.  

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice.  We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions.  The firm provides a range of legal services as following to multinational and domestic clients.

Read More