Finding potential employees and prospective candidates from third parties is a trend that enterprises are currently applying. Accordingly, the enterprise uses employment services to search for candidates or to transmit the recruitment news. This way encourages the Vietnam labor market to remain active and attracts Foreign investors to invest in Vietnam to provide ” Job recommendation” service.

However, this is a conditional business line, then before making an investment, the Investor shall ensure that it meets the specific conditions of Vietnamese law. The following article will analyze this issue in more detail.

Employment services according to the WTO Schedule of Commitments in Services

Similarly to other services, Investor shall consider Vietnam’s commitment to the WTO Schedule of Specific Commitments in Services as well as specialized documents to determine whether they are allowed to establish a business in Vietnam to provide employment services.

In terms of the WTO schedule of commitment, Vietnam has not yet committed to open the market for employment services. However, this is not  a prohibited or restricted business in Vietnam, thus Investor can establish a business providing employment services in Viet Nam.

What are the legal requirements for employment services in Vietnam?

For specialized management legal documents, Investor shall meet the following additional conditions to provide employment services in Vietnam:

– Having location for its head office, branch to organize employment services activities which are owned or rented permanently by the business under a contract having a term of 3 years (36 months) or more.

– The enterprise has made a deposit of 300,000,000 VND (Three hundred million dong) at a Vietnamese commercial bank or a foreign bank branch legally established and operating in Vietnam.

– The legal representative of an enterprise who perform employment services activities shall meet the following requirements: Shall be be an enterprise manager in accordance with the Law on Enterprises (Chairman of the Board of Members;  member of the Board of Members; Company President; Chairman of the Board of Directors; members of the Board of Directors; Director or General Director) and individuals holding other management roles as prescribed in the company’s charter.

In addition, the legal representative does not fall into one of the following cases:

– Prosecuted for criminal liability; detained; serving imprisonment penalty; serving administrative penalties at compulsory detoxification establishments, compulsory education establishments; escaping from his/her place of residence;

– Having restricted or lost capacity of performing civil acts, having difficult in cognition, controlling the behavior, be banned by Court from holding certain posts or practicing certain occupations, or doing certain jobs relating to employment services;

– Besides, the legal representative shall have a university degree or higher qualification or have directly worked as a professional or employment services manager or the supply labor for full 02 years (24 months) or more within 05 consecutive years before applying for the license.

Terms of deposit for employment services

In Vietnam, the deposit is required for employment service businesses in Vietnam. Accordingly, the margin deposit will be maintained at a Vietnamese commercial bank and used in case the enterprise fails to perform or fulfill its obligations in employment service activities. In all cases, the enterprise shall ensure that the margin deposit always retains the original amount, unless the business withdraws the margin deposit to perform some regulatory obligations and the enterprise is responsible for supplementing the missing amount within 30 days.

The enterprise will be able to withdraw the margin deposit when the enterprise falls into some of the following cases:

– The enterprise is not licensed to operate employment services;

– The enterprise’s license is revoked or is not renewed or re-issued;

– The enterprise has deposited at another deposit-receiving bank;

– The Enterprise face difficulties and cannot afford to compensate workers, employers for violations of employment service regulations after 60 days from the date of payment of compensation as prescribed by law.

After reviewing the conditions prescribed by Vietnamese law, the Investor can begin the stage of document preparation and planning for the submission of documents for the establishment of a business providing employment services in. CDLAF will share information about the steps to start a business providing employment services in Vietnam in the next articles.

Writing Time: 12/03/2023

The article contains general information with a reference value; if you want legal opinions on the issues you are facing, kindly inform our Lawyers via email at info@cdlaf.vn