Investment conditions in labor subleasing services for foreign investors 

Investment conditions in labor subleasing services for foreign investors 

The labor outsourcing industry is related to using labor, in other words, the use of human resources and is related to workers’ rights and obligations. Therefore, foreign investors who want to operate in this industry must be licensed according to Vietnamese law. Our Siglaw will provide you with information about the conditions for investing in labor leasing services for foreign investors: 

Conditions for investing in labor subleasing services for foreign investors

Nowadays, Vietnam’s economy is on the rise, so the demand for labor from a fundamental level to a high professional level is increasing. Vietnam is a country with abundant labor resources with labor qualifications that meet a variety of employers’ requirements. Therefore, foreign and domestic investors have seen the potential in the field of labor outsourcing. 

According to the 2019 Labor Code, Article 52 on Labor Subleasing:

“1. Labor subleasing is when a worker signs a labor contract with an employer who is a labor subleasing enterprise, then the worker is transferred to work and is under the management of another employer while still maintaining the relationship with the first employer who has entered into a labor contract. Labor leasing activity is conditional business lines, only carried out by businesses with a Labor Subleasing License and applicable to certain jobs.” 

Legal conditions

According to “Working Party on the accession of Vietnam” from World Trade Organization (WTO) and Free Trade Agreements (FTAs) there are no specific regulations on investment conditions for foreign investors on labor subleasing services, hence, investment conditions for labor subleasing services for foreigners will be specifically based on Vietnamese law including: 

• Labor Code 2019; 
• Decree 145/2020/ND-CP Detailing and guiding the implementation of some articles of the Labor Code on working conditions and labor relations; 
• Circular 10/2020/TT-BLDTBXH Detailing and guiding the implementation of some articles of the Labor Code on the content of labor contracts, collective bargaining councils and occupations, and jobs that have adverse effects on reproductive and child-rearing functions. 

Specific conditions

To be able to run the labor subleasing business, foreign investors need to meet the following requirements and specific conditions: 

• Foreign investors can invest in the form of a joint venture with labor outsourcing company in Vietnam 
• Foreign investors need to have the Enterprise Certificate from the competent authority of the host country and the representative of the enterprise’s capital contribution has not committed any violations of the host country or the laws of related countries. 
• Experienced foreign investors who have worked for 5 years or more in labor outsourcing are determined by a contract in which the enterprise has conducted labor subleasing services, which shows the time of labor subleasing activities are licensed according to host country regulations and relevant documents (if any)
• Foreign investors must be an enterprise specializing in labor subleasing business, with capital and total enterprise asset value of 10 billion VND or more (determined by one of the following documents: a business registration license with labor subleasing business; Labor subleasing operation license and other documents issued by the competent authority of the host country to proceed labor subleasing activities). 
• In addition, if foreign investors want to be granted a license to register labor subleasing services, they need to meet some requirements: 
• Employees of labor outsourcing companies must have at least 3 workers with college degrees or higher in foreign language, law, or economics. 
• Have a specific business location, provide valid land lease, office lease and location lease contracts. The company’s area is suitable, with all departments as well as the necessary equipment and machinery to serve the company 
• Need to ensure a deposit capital of 2 billion VND. This capital is intended to resolve compensation or related risks during the company’s business process. The minimum legal capital required is 2 billion VND. Furthermore, the minimum charter capital a business needs to declare is 2 billion VND; 
• The owner must be a person with full civilian capacity and at least 2 years of experience working in the labor leasing industry. He/she is not subject to restrictions on owning a business or opening a company. If he/she does not own a business for 3 consecutive years, his/ her business license or business registration certificate will be revoked.

Investment industry conditions

Foreign investors need to register appropriate business lines to invest in labor subleasing services, so they can fulfill their business purposes. Some industries that foreign investors can register for business include: 

Industry code: 7810: Activities of labor and employment consulting, introduction and brokerage centers and agencies;

Industry code: 7830: Supply and management of labor resources including: 

• Supply and management of domestic labor resources
• Supply and manage labor resources to work abroad

The policy of Siglaw Law Firm guarantees the following incentives:

• Free consultation, 24/7, for all questions about capital contribution to securities trading companies in Vietnam
• Ensure to complete the work quickly, compactly, 100% on time agreed
• A team of lawyers and consultants with more than 10 years of experience in consulting and carrying out procedures for applying for capital contribution to securities trading companies

   Above is the advice of Siglaw Law Firm on capital contribution to securities trading companies of foreign investors, if you have any questions, please contact us immediately via: 

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

• vphn@siglaw.com.vn
• vphcm@siglaw.com.vn

Headquarters: Floor 12A Sao Mai Building, 19 Le Van Luong Street, Nhan Chinh Ward, Thanh Xuan District, Hanoi City.

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