Work permit for foreign investors?

Vietnam is a country that has been having many policies to attract foreign investors to work in Vietnam. In particular, foreign investors are individuals with foreign nationality, organizations established under foreign laws and carry out business investment activities in Vietnam. When conducting business investment activities in Vietnam, many people wonder if a work permit is required? In this article, we will help you answer the above questions.

Foreign investors carry out business activities in Vietnam in one of the forms such as contributing, purchasing shares or capital contributions of economic organizations. If the investor is a foreign individual who is a capital-contributing member or owner of a limited liability company, he / she will be exempted from work permit under the provisions of Clause 1, Article 7 of Decree 11/2016/ND-CP.

However, this provision does not mean that all of investors are automatically exempted from work permits. Foreign investors who are not required to have a work permit must be certified by the Department of Labor, War Invalids and Social Affairs before coming to work in Vietnam. Specifically, according to Article 8 of Decree 11/2016 / ND-CP, the employer requests the Department of Labor - Invalids and Social Affairs where the foreigner is expected to work to confirm the foreign worker is not required to issue a work permit at least 07 working days in advance from the date the foreign worker starts working.

Dossier of request for certification not subject to issuance of a work permit, including: Written request for certification of foreign workers not subject to work permit and documents proving that the foreign worker is not subject to a work permit. Within 03 working days from the date of receipt of a complete application for certification not subject to a work permit, the Department of Labor - Invalids and Social Affairs shall send a written confirmation to the employer. In case of non-certification, there must be a written reply clearly stating the reason.

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Procedures for changing information of shareholders?

In the period of industrialization and modernization, foreign investors are the objects that the government calls for investment. When deciding to invest in Vietnam, the main form is to contribute capital to buy shares and become a shareholder, this is considered the most common form. However, changes in business usually take place and they must be done under strict procedures to control.

In case of change of information that foreign shareholders in unlisted joint stock companies: According to Article 52 of Decree 78/2015/ND-CP, when this change is made, the company must notify the Business Registration Office where the enterprise has registered. The notice shall contain the following information: name, business identification number, tax code or number of business registration certificate (in case the enterprise have not a business identification number or tax code yet); information of a shareholder being a foreign investor transferring shares; information of foreign investors being transferred shares; full name, identity card number or passport or other lawful personal identification and signature of the company's legal representative.

Enclosed with the Notice, the company must send the Decision and a valid copy of the Meeting Minutes of the General Meeting of Shareholders on the change of shareholders being foreign investors; list of shareholders being foreign investors when changed; a share transfer contract or documents proving the completion of the transfer; A valid copy of the Establishment Decision or other equivalent document and a document of the Department of Planning and Investment approving the foreign investor's capital contribution, share purchase in accordance with the Law on Investment.

Upon receipt of the notice, the Business Registration Office shall give a receipt, check the validity of the file, change information about the shareholders being foreign investors in the National Enterprise Registration Database. In case of an enterprise's need, the Business Registration Office shall issue a Certification of changing the enterprise registration information to the enterprise.

In cases of changing basic information of foreign investors:

According to Article 54 of Decree 78/2015 / ND-CP, within 03 days from the change of name, enterprise ID number, head office address, number of shares and type of shares and last name , name, nationality, passport number, permanent address of authorized representatives of shareholders being foreign organizations, enterprises send notice of supplementation and update of business registration information to the Registration Office where the enterprise is headquartered.

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Incentives and investment support

In order to attract foreign investment into Vietnam, the Government of Vietnam offers many policies to encourage and support investors when investing in some special trades, industries or localities. By incentives and investment support, the state proactively restructures the economy in each field and region to sustainably develop economic sectors. Investment incentives and supports are the provisions of the Investment Law, and are further stipulated in specialized legal documents.

Vietnam has a roadmap to adjust the corporate income tax from 32% (1997) to 25% (2009) and most recently 22% (2014) and now 20% (from January 1, 2016). The State allows the application of enterprise income tax rates lower than ordinary tax rates with a definite term or the whole duration of investment project implementation; exemption or reduction of enterprise income tax for enterprises newly established from investment projects in geographical areas with exceptionally difficult socio-economic conditions, economic zones and hi-tech parks; Activities in the field of education - training, vocational training, health care, culture ... in order to attract and create conditions for investors to pay attention to these fields.

In addition, the Law on Investment, the Law on Export Tax and Import Tax also provide a policy of import duty exemption for imported goods to create fixed assets; materials, supplies and components for executing investment projects; investment projects with official development assistance (ODA). The agreements on import and export tax incentives within ASEAN countries, the WTO have helped investors reduce Input costs, high competitiveness in the domestic market as well as internationally.

In addition, exemption, reduction of land rent, land use fee, land use tax is also one of the incentives for investors if they has an investment project in the special fields which are encouraged to invest in extremely difficult socio-economic areas; projects of using land to build apartment buildings for workers in industrial zones; projects using land to build student dormitories with money from the state budget, projects using land for construction of public works for business purposes (socialization) in the field of education, health, culture, gymnastics, sports, science - technology, ...

The geographical areas and sectors eligible for investment incentives show the Government's goal of economic development to focus on attracting foreign direct investment into the areas where Vietnam needs to develop. The corporate income tax rate and Vietnam's preferential policies are considered quite attractive compared to other countries in the region. Recognizing the importance of encouraging investment, Vietnam has been issuing regulatory documents to create a useful legal corridor and in line with international practice in creating highly competitive investment environment.

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Issuing Investment Certificate for Foreign Investors

Foreign investors whom wish to carry out business in Vietnam need to have investment project proposal prepared for submission to State Authority in Vietnam. Investment projects of foreign investors and projects of economic organizations with 51% or more foreign owned capital (except for cases of capital contribution, purchase of shares or capital contributions of economic organizations) need to follow procedures for issuing Investment Registration Certificate (IRC).

Investment registration certificate records information of an investor's registration of an investment project. In Vietnam, the agency which has competent to grant, adjust and revoke investment registration certificates is the Department of Planning and Investment or the Management Board of Industrial Parks, Export Processing Zones, High-Tech Zone and Economic Zone depending on the specific project details. The time limit for issuing investment registration certificates for each project is usually 15 days from the date of receipt of a complete application dossier submitted by the investors.

When the investors need to change the scope, purpose of an investment registration certificate, he must carry out the procedures for adjusting the investment registration certificate corresponding to the changed content. Within 10 days, this procedure will have results based on the records that investors submit to the competent authorities.

The existence of an investment project permitted by the State for an investment project in an economic zone shall not exceed 70 years; investment projects outside economic zones shall not exceeding 50 years; investment projects implemented in geographical areas with difficult socio-economic conditions, areas with exceptionally difficult socio-economic conditions or projects with large investment capital but with slow capital recovery, the term can be granted longer but not more than 70 years.

In some cases, to ensure the project implementation in Vietnam, the State issues regulations that require obligations of investor. During the operation of a project, for projects that are allocated or leased land, permitted to change the purpose of land use by the State, investors must make a deposit from 1% to 3% of the project investment capital to ensure project implementation based on the scale, property and implementation schedule of each specific project. This deposit is returned to the investor according to the progress of the investment project, unless otherwise refunded. In addition, investors are responsible for ensuring the quality of machinery, equipment, technology lines to execute investment projects in accordance with law by themselves.

In case of subjective or objective reasons, the investor is entitled to transfer the investment project, delay the investment schedule, suspend the operation of the investment project, or terminate the investment project's operation.

It is always challenging to navigate the Vietnam regulations, especially with real estate, energy, infrastructure, manufacturing projects involving the use of land, with large scale of investment involving the authorities at provincial levels and therefore at ANT Lawyers our lawyers and consultants would assist the clients from the early stages to work with state government agencies, landlords being industrial parks, industrial processing zone to work out the land lease contract, project appraisal process, and setting up company corresponding to the needs of the investors, and finally assist the investors in obtaining Investment Certificate.

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Solving commercial disputes by negotiation

When participating in economic relations, the occurrence of disputes and conflicts between individuals and organizations is inevitable. In the dispute, all parties want to find the solution to resolve the dispute to best ensure their rights and affect the relationship between the parties is the lowest, so as to achieve efficiency but less costly time and money. Therefore, the choice of dispute resolution method is extremely important. In fact, the most commonly used methods of dispute resolution include negotiation, mediation, arbitration, and court.

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Negotiation is the first method of settlement in the dispute resolution process, which is reflected in the fact that the parties in the dispute actively meet, discuss and agree on each party's rights and obligations.

The law on dispute resolution does not require the parties to negotiate. Therefore, from the process of organization, implementation, the presence of the parties, the rights and obligations of the entities, the negotiation results are not subject to the adjustment of legal regulations. It all depends on the goodwill of the parties. In case an agreement is reached in the negotiation meeting, and then one of the parties fails to comply, the parties cannot request the competent state agency to carry out the enforcement.

The mode of negotiation is usually prioritized by the parties when the dispute occurs, because this method is adjust by the law and not restricted by strict regulations on the process of negotiation, participants, time, as well as inexpensive money. Due to the self-settlement with each other, disputes should not be greatly enlarged, without affecting the reputation of the parties. Also because there is no regulation of the law, there is no enforcement on the bargaining results.

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Entering into a labor contract

A Labor contract is an agreement between an employee and an employer on paid employment, working conditions, rights and obligations of each party in the employment relationship.

Before starting to work, the employee and the employer need to sign a full employment contract so that they can know their rights and obligations when working, and carry out immigration-related procedures, temporary residence in compliance with Vietnamese law.

Labor contracts are made on the principles of voluntariness, equality, goodwill, cooperation and honesty, free-of-agreement between the parties but must not contravene the law and collective labor agreements and social ethics. .

There are three main types of Labor contracts: indefinite-term labor contracts, definite-term labor contracts (with term from full 12 months to 36 months), seasonal or specific employment contracts with a term of less than 12 months. The parties to the contract should pay attention to be able to know the time of contract termination according to the provisions and make an extension, sign a new contract according to the agreement of the parties.

The content of the labor contract should contain sufficient information about the parties, the job and the place of work, the contract term, salary, form and deadline of salary payment, wage allowances and additional amounts, the regime of wage increase, working time, rest time, insurance policies, training, ... these are necessary information required in a labor contract, the parties need to consider implementing, to ensure its rights and obligations with respect to employment contracts.

For foreign employee, it is necessary to pay attention to the content and cost of implementing legal procedures to ensure working in Vietnam such as entry visa, temporary residence card, work permit to avoid unqualified labor contract performance as committed with the employer. During the implementation of the labor contract, the parties have the right to agree to terminate the contract ahead of time or unilaterally terminate the labor contract in accordance with the law, but the notice must be given within the time appropriate to the other party.

In addition, during the implementation of the labor contract, the parties may amend and supplement the labor contract in accordance with the current law. Any addition or modification must be agreed by the parties by signing an appendix of the contract or signing a new labor contract.

The labor contract is a very important agreement that directly affects the rights and interests of the parties in their activities, so the parties should pay attention to the terms of the contract to avoid unfortunately disputes. 

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