LEGAL NEWSLETTER NO.07 - 08/2020: NEW POINTS ON WORK PERMITS FOR FOREIGNERS IN VIETNAM UNDER LABOR C

LEGAL NEWSLETTER NO.07 - 08/2020: NEW POINTS ON WORK PERMITS FOR FOREIGNERS IN VIETNAM UNDER LABOR CODE 2019 AND LAW ON INVESTMENT 2020

Posted date: 17/09/2020

PART 1: RESEARCH & EXCHANGE

NEW POINTS ON WORK PERMITS FOR FOREIGNERS IN VIETNAM

UNDER LABOR CODE 2019 AND LAW ON INVESTMENT 2020

“In fact, foreign investors (hereinafter referred to as “foreign investors”) have created a strong economic resource to develop in all aspects in Viet Nam. The investment capital of foreign investors over the past years has created many values in economic growth, infrastructure development, improvement of social life, creating employment resources ... Hence, the law of Vietnam tends for opening more conditions to welcome foreign investors to come to Vietnam.

Besides basic positive issues, there are still cases of foreigners take advantage of Vietnam's investment policies to enter our country for other purposes, even though they are not qualified to work in Vietnam, taking advantage of the provisions of the current law, they have stayed in Vietnam to live and work, but actually, it is not true to the nature of the subjects working in Vietnam. Consequently, arising issues of social life, order and security, and national security are posed very painfully, there is a need for legal provisions to create the best conditions to attract investement resources and controlling the activities of foreigners in Vietnam to ensure the security, order, security and national defense of the country at the same time.

Through this article, we would like to discuss some issues of the Labor Code 2019 and the investment Law 2020 that have been enacted with notable issues related to work permits (hereinafter referred to as "GPLĐ" ) and notable regulations on foreign investors ”.

1. Regulations on foreign investors and work permits are specified in the Labor Code 2012 and the Investment Law 2014

As prescribed in Clause 14, Article 3 of the Law on Investment 2014: “Foreign investor is an individual with foreign nationality, an organization established under the foreign law conducting business investment activities in Vietnam. . "

According to the above-mentioned provisions, foreign investors include individuals and economic organizations, when investing in Vietnam, foreign investors can invest through 04 forms: investment in establishing economic organizations; investment in the form of capital contribution, share purchase, capital contribution to economic organizations; Investment in the form of PPP contract; Investment in the form of BCC contract. When investing in Vietnam, foreign investors should note that the conditional investment sectors are specified in Appendix 4 of the Investment Law 2014 and the sectors and services of foreign investors are not allowed to invest in Vietnam. Regulations are scattered in legal documents, decrees, and circulars such as: lottery business[1], Publisher establishment [2], industrial property representation services [3], industrial property assessment services [4]…

In order to making favorable conditions for the investment process, attracting more foreign investors, at Article 172 of the Labor Code 2012, foreign citizens working in Vietnam are not issued work permits, in which is:

“1. Capital contributor or owner of a limited liability company;

2. Member of the Board of Directors of a joint stock company”.

According to the above-mentioned provisions, foreign investors invest through two forms: investment in the establishment of economic organizations and investment in the form of capital contribution, share purchase, capital contribution to economic organizations will not be issued work permits

From the above-mentioned regulations, in fact, the following problems have occurred :

Firstly, the regulation of foreign investors investing in Vietnam in the form of establishing economic organizations and contributing capital, buying shares, and contributing capital to economic organizations that are not subject to the issuance of legal licenses is the regulation. To help promote the investment process in Vietnam to be faster, when foreigners entering Vietnam are required to apply for a work permit, they will have to prepare a lot of papers to apply for a work permit specified in Article 10 of Decree 11 / 2016 / ND-CP detailing the implementation of a number of articles of the Labor Code regarding foreign workers working in Vietnam ("Decree 11/2016 / ND-CP") such as: (1) Document issue the work permit of the employer in accordance with the regulations of the Ministry of Labor, War Invalids and Social Affairs; (2) Health certificate; (3) Judicial record or documents certifying that the foreign worker is not a criminal or prosecuted for criminal liability issued by the foreign country; (4) Proof of identity as manager, executive director, expert or technical worker; (5) Certified copy of passport or passport substitute document or international travel document valid as prescribed by law; (6) Documents relating to the foreign worker.

On the other hand, Vietnam only grants WP to subjects having professional qualifications and skills such as managers, executives, experts or technical workers.[5] Thus, foreign workers working in Vietnam are highly qualified people.

Meanwhile, the dossier shall be submitted in case foreigners are not required for granting work permit only includes:[6]: (1) A written request to confirm that the foreign worker is not required fro granting a work permit; (2) A list of foreign workers with the following contents: full name; year old; sex; nationality; passport; work start date and end date; the job position of the foreign worker; (3) Documents proving that the foreign worker is not required to be issued a work permit. The procedure for confirmation is also simpler than specified in Article 8 of Decree 11/2016 / ND-CP is within 03 working days from the date of receipt of a complete application for certification of not subject to a work permit. The Department of Labor, War Invalids and Social Affairs where the foreigner is expected to work shall send a written confirmation to the employer. In case of not confirming, it will reply in writing and state the reason.

Because of the above reasons, a large part of foreign unskilled workers (ineligible for issuance of a work permit) invest, contribute a small amount to a limited liability company with two or more members to not be part of the issue of work permit. These are "virtual" investors who not only bring benefits to the Vietnamese economy, but also take away the working opportunities of Vietnamese workers. The fact that foreigners are unskilled workers contribute a small amount of capital to a limited liability company to become a contributor and work in Vietnam is very common. As Mr. Mai Xuan Tri, Deputy Director of the Department of Labor, Invalids and Social Affairs of Khanh Hoa province said, currently the Investment Law and the Enterprise Law do not regulate the level of capital contribution, so many foreigners have contributed capital to the business. Enterprises with only 1 million VND or more are of course not required to be issued with a work permit. Because as much as you contribute, you will become a capital contributor and can work in Vietnam. In 2017 in Khan Hoa province, when an inspection discovered at Shree Yashoda Investments Co., Ltd. (Loc Tho ward, Nha Trang city), there are 3 foreigners working. All 3 people are capital contributors of the company with the contribution of only… 3 million VND / person.[7]

Secondly, the law stipulates that foreign investors invest through two forms:in the establishment of economic organizations and investment in the form of capital contribution, share purchase, capital contribution to economic organizations will not be subject to be issued work permit, but it is not clear whether the other two investment forms of foreign investor are an investment in the form of a PPP contract and investment in the form of a BCC contract, are eligible for issuance of a work permit or not.

Comparing with the provisions at Article 172 of the Labor Code 2012 about the cases are not issued work permit, it is clear that the investment under PPP contracts and BCC is not subject to be issued work permit. Thus, this regulation seems to make inequality among investors when investing in Vietnam.

2. Regulations on foreign investors, work permits as prescribed by the Labor Code 2019 and the Law on Investment 2020 shall take effect from the date of January 1 2021.

At Clause 19, Article 3 of the Investment Law 2020 stipulates that “Foreign investors are individuals with foreign nationality, organizations established under foreign laws and conducting business investment activities in Vietnam.”

Similar to the regulations on foreign investors in the Law on Investment 2014, foreign investors include two entities who are individuals with foreign nationality and organizations established under foreign laws. Foreign investors can invest in Vietnam through 05 investment forms, including: investment in establishing economic organizations; Capital contribution investment, share purchase, capital contribution purchase; Implementation of investment projects; Investment in the form of BCC contract; New forms of investment, new types of economic organizations according to government regulations.

In order to make conditions for foreign investors invest in Vietnam, according to Clauses 1 and 2, Article 154 of the Labor Code 2019, some cases in which foreign investors are not required to be granted WP, including :

“1. Is the owner or capital contributor of a limited liability company with a capital contribution value conformable with regulations of the Government.

2. Is the Chairperson or a member of the Board of Directors of a joint-stock company a capital contribution value conformable with regulations of the Government.”

Similar to the provisions of Law on Investment 2014, Law on Investment 2020 stipulates that foreign investors are the owners or capital contributors of limited liability companies or members of the Board of Directors of joint-stock company will not be eligible to be issued work permit. The difference is the Labor Code 2019 specifies conditions for foreign investors to contribute capital with a certain value (the Government will later provide details), meet the condition of this capital contribution is not eligible to be issued work permit. Although, no guidance of government on the value of capital contribution is not eligible to be issued work permit, but this regulation will set a minimum level of capital for foreign investors to contribute capital to businesses. This amendment overcomes regulations that foreign investors taking advantage of a small capital contribution to a limited liability company to stay and work in Vietnam under the Investment Law 2014.

However, in order to take best results,there need to be regulations guiding the handling of foreign investors investing in Vietnam before the Labor Code 2019 comes into effect and the capital is insufficient with regulation of the Government, moreover, the above-mentioned provisions have not yet clarified the remaining 3 forms in case foreign investors invest in Vietnam:Implementation of investment projects; Investment in the form of BCC contract; new forms of investment, new types of economic organizations according to the Government's regulations are cases are not issued work permit or are required to grant a work permit. To make equality for foreign investors invest in Vietnam, we think that all forms of foreign investors investing in Vietnam shouldn't be subject to be issued work permit to reduce less administrative procedures, save time for foreign investors, make favorable conditions for foreign investors invest in Vietnam.

Besides that, there should be additional regulations to manage the residence, the purchase of real estate and other practical activities of foreign investors to ensure there are no administrative cases. The main policy is strict, but the management in terms of the reality of residence and labor is lax, leading to attracting investment is not attractive, but there are negative problems when a part of foreigners live in Vietnam causes negative consequences for security, security and national defense./.

Ha Thi Hien - FDVN LAW FIRM

[1] Decision 58/2016 / QD-TTg on criteria for classification of state-owned enterprises, state-owned enterprises and the list of state-owned enterprises to be rearranged for the period of 2016-2020..

[2] Article 12 of the Publication Law 2012

[3] Article 1 of the Law amending and supplementing some articles of the Intellectual Property Law in 2019.

[4] Article 1 of Circular 04/2012 / TT-BKHCN Amending and Supplementing some regulations of Circular No. 01/2008 / TT / BKHCN dated February 25, 2008.

[5] One of the four conditions for the issuing work permit specified in Article 9 of Decree 11/2016 / ND-CP detailing the implementation of a number of articles of the Labor Code regarding foreign workers working in Vietnam.

[6] Clause 3 Article 8 of Decree 11/2016 / ND-CP.

[7] The Laborers newspaper, The management gap of foreign workers work illegal was published on June 20, 2017..

PART 2: LAW & PRACTICE

WHICH DOES RESPONSBILITY ON VERIFING ADDRESS OF THE DEFENDANT BELONG TO THE COURT OR THE INVOLVED PARTIES?
IS DECISION ON APPLYING PROVISIONAL URGENT MEASURES IN THE PRIMARY VERIFICATION APPEALED?
HOW IS USING TELECOM NETWORK AND ELECTRONIC MEDIA ON ILLEGAL GAMBLE?
HOW TO HANDLE IN CASE THE DECEASED AUTHORIZED SIGNING MORTGAGE CONTRACT?

PART 3: KNOW THE RULES

SUMMARIZING 67 THE TIME LIMITS AND THE STATUTE OF LIMITATIONS ON SETTLEMENT OF ADMINISTRATIVE CASE

Link for download: LEGAL NEWSLETTER NO.07 - 08/2020

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