Conditions for establishing a labor outsourcing company in Vietnam

Labor outsourcing is a business line permitted by law to form enterprises specializing in providing professional services for specific industries, improving labor productivity, reducing costs for recruiting and training human resources. In addition, labor outsourcing makes it easy for businesses to adjust human resources in a short time, creating conditions for employees to change many working environments, but still legally guaranteed. However, to establish a labor outsourcing company, the business entity must meet certain conditions. So what are the conditions for establishing a labor outsourcing company?

Legal bases

• WTO, CPTPP
• Labor Code 2019;
• Enterprise Law 2020;
• Decree 145/2020/ND-CP details and guides the implementation of a number of articles of the Labor Code on labor conditions and industrial relations.

Market access conditions for labor outsourcing services

WTO commitments: not specified

CPTPP commitments: no restrictions

Thus, for this service, Vietnam has only opened its market to foreign investors within the scope of CPTPP commitments and has not committed to the remaining countries. When entering the market, foreign investors need to fully meet the provisions of Vietnamese law, specifically Decree 145/2020/ND-CP detailing and guiding the implementation of a number of articles of the Labor Code on labor conditions and industrial relations.

Conditions for establishing a labor outsourcing company in Vietnam

Labor outsourcing is the fact that an employee enters into a labor contract with an employer that is a labor outsourcing enterprise, after which the employee is transferred to work and is under the management of another employer while maintaining labor relations with the employer who has entered into the labor contract.

Therefore, in order to carry out labor outsourcing activities, the labor outsourcing enterprise must ensure the conditions specified in Article 54 of the 2019 Labor Code and guidance in Article 12 of Decree 145/2020/ND-CP detailing and guiding the implementation of a number of articles of the Labor Code on labor conditions and industrial relations (Decree Regulation 145/2020/ND-CP), including the following conditions:

Conditions for legal representative

The legal representative of the enterprise conducting labor outsourcing activities must ensure the following conditions:

• Be the manager of the business as prescribed. Enterprise managers here include private enterprise owners, general partners, Chairman of the Members’ Council, members of the Members’ Council, President of the company, Chairman of the Board of Directors, members of the Board of Directors, Director or General Director and individuals holding other management titles competent to sign transactions of the company on behalf of the company as prescribed in the company’s charter.
• There was no conviction.
• Having worked directly as a professional or manager in labor outsourcing or labor supply for full 03 years (36 months) or more during the preceding 05 years before applying for a license.

Margin

The enterprise has made a deposit of VND 2,000,000,000 (two billion Vietnam dongs) at a commercial bank of Vietnam or a branch of a foreign bank legally established and operating in Vietnam.

Employers

Recruit, enter into labor contracts with employees, then transfer employees to work and be under the management of other employers while maintaining labor relations with the outsourcing enterprise.

List of industries to be outsourced

In addition to regulations on conditions for enterprises engaged in labor outsourcing, Vietnamese law also stipulates industries and jobs permitted for labor outsourcing. Accordingly, the list of jobs to be outsourced is specified in Appendix 2 promulgated together with Decree 145/2020/ND-CP, detailing and guiding the implementation of a number of articles of the Labor Code on labor conditions and industrial relations,  Includes 20 professions:

• Interpretation/Translation/Stenography.
• Secretary/Administrative Assistant.
• Travel guide.
• Sales support.
• Project support.
• Programming production machine systems.
• Production and installation of television and telecommunications equipment.
• Operation/inspection/repair of construction machinery, electrical production systems.
• Cleaning and cleaning buildings, factories
• Document editing.
• Bodyguard/Guard.
• Telemarketing/Customer Service.
• Handling financial and tax issues.
• Car Repair/Operation Inspection
• Scan, industrial technical drawing/Interior decoration.
• Management, operation, maintenance and service on ships.
• Manage, supervise, operate, repair, maintain and service on oil and gas rigs.
• Flying aircraft, serving on board/Maintenance and repair of aircraft and aircraft equipment/Dispatch, flight operation/Flight monitoring.

Cases in which enterprises are not granted licenses for labor outsourcing activities in Vietnam

To be granted an operation license, enterprises must meet the conditions specified in Article 21 of Decree 145/2020/ND-CP. An enterprise shall not be granted a license for labor outsourcing activities in the following cases:

• Not meeting the conditions specified in Article 21 of the Government’s Decree No. 145/2020/ND-CP.
• Used fake licenses to outsource labor.
• There is a legal representative who used to be the legal representative of an enterprise whose license is revoked for the reasons at Points d, dd and e, Clause 1, Article 28 of the Government’s Decree No. 145/2020/ND-CP for 05 preceding years before applying for a license for labor outsourcing activities.
• There is a legal representative who used to be the legal representative of the enterprise using a fake license.

Dossier of application for a labor outsourcing license in Vietnam

• Written application for an enterprise’s license according to Form No. 01/PLIII Appendix III issued together with Decree No. 145/2020/ND-CP.
• Autobiographical resume of the legal representative of the enterprise according to Form No. 07/PLIII Appendix III issued together with Decree No. 145/2020/ND-CP.
• Criminal record card No. 1 in accordance with the law on criminal record of the legal representative of the enterprise. In case the legal representative is a foreigner who is not subject to the issuance of criminal record card No. 1, it shall be replaced with a criminal record card in the country of nationality (the criminal record card is issued no more than 06 months before the date of submission; documents in a foreign language must be translated into Vietnamese, authenticated and consular legalized in accordance with law).
• A document proving that the time of direct professional or management in labor outsourcing or labor supply of the legal representative of the enterprise is full 03 years (36 months) or more within 05 consecutive years before applying for a license is one of the following types of documents.
• A certified copy from the original labor contract or work contract or the decision on recruitment, appointment or assignment of tasks of the legal representative of the enterprise. In case the document is a foreign document, it must be translated into Vietnamese, authenticated and consular legalized in accordance with law.
• A certified copy of the original decision on appointment (for people working under the appointment regime) or a document recognizing the election results (for people working under the election regime) of the legal representative of the enterprise or a copy of the enterprise registration certificate (in case of being the legal representative of the enterprise for outsourcing or supplying labor). In case the document is a foreign document, it must be translated into Vietnamese, authenticated and consular legalized in accordance with law.
• Certificate of deposit for labor outsourcing activities according to Form No. 01/PLIII Appendix III issued together with Decree No. 145/2020/ND-CP.

Procedures for application for a labor outsourcing license in Vietnam

Step 1: The enterprise sends 01 set of dossiers as prescribed to the Department of Labor, War Invalids and Social Affairs of the province or centrally-run city where the enterprise is headquartered to apply for a license. After checking all prescribed documents, the Department of Labor, War Invalids and Social Affairs shall issue a receipt clearly stating the date, month and year of receipt of the dossier.

Step 2: Within 20 working days from the date of receipt of the assurance dossier as prescribed, the Department of Labor, War Invalids and Social Affairs shall verify and submit to the Chairman of the People’s Committee of the province for issuance of a labor outsourcing license for the enterprise. In case the dossier is not guaranteed as prescribed, within 10 working days from the date of receipt of the dossier, the Department of Labor, War Invalids and Social Affairs shall request the enterprise in writing to complete the dossier.

Step 3: Within 07 working days from the date of receipt of the dossier submitted by the Department of Labor, War Invalids and Social Affairs, the Chairman of the People’s Committee of the province shall consider and grant licenses to the enterprise; In case of refusal to grant a license, a written reply to the enterprise clearly stating the reason for refusal to grant the license.

If you want to establish a labor outsourcing company, please contact Viet An Law Firm for the best support!