Vietnam Reforms the Law of Foreign Employment in the Country

On June 17 of this year, the Vietnamese government issued Decree n.46/2011/ND-CP (effective from August 1, 2011) amending and supplementing Decree n.34/2008/ND-CP dated March 25, 2008 on the employment and administration of foreigners working in Vietnam.
The new legislation aims at improving the ineffective implementation of foreign labor regulations with strong regard to the working permit requisite.
In fact, the newly called “expats” (foreigners) are entitled to work in Vietnam if they meet all profile requirements listed in Article 3 paragraphs 1, 2, 3 and 4. Namely, the individual is a minimum 18 years of age; in good health; holds a manager, director or expert position; and has no criminal record for national security offense. Secondly, the individual must succeed to carry out the epic administrative process to get a permit, which includes the obtainment of legal certificates of no criminal activities from all former countries of residence (Art.4.2.b).

However, Decree n.46/2011/ND-CP (hereinafter “the Decree”) makes few, but significant steps to accelerate the whole procedure thanks to major deadline revisions (now 10 days instead of 15 for granting permits, same for extension inquiries, and 3 instead of 15 for re-issuance cases).

Instead, the most questionable feature of the recent regulation is given by its faithfulness to the well-established governmental policy of discouraging in-flows of human capital and encouraging domestic labor workforce to break free national borders at the same time. In fact, Article 16.1 of the Labor Code recites “The employee has the right to work for any employer and at any place not forbidden by law (emphasis added).”

The growing number of foreign workers over the last three years (official statistics report 52,633 people in 2008 becoming 55,418 in 2009, and rising to 56,929 in 2010) has increased to between 70,000 and 74,000 foreigners and it has recently played a crucial role in the settlement of working expats’ “containment” provisions. On the whole, as Minister Nguyen Thi Kim Ngan put it, “Vietnam’s point of view is not receiving foreign unskilled workers.”

The core of the onerous task is threefold and includes new rules that have already unleashed disappointment and stirred stiffness in the foreign business environment. Under the spotlight are now measures applying to people unsupplied with work permit and employment recruitment.

New regulation imposes expulsion for working permit’s non-complianceUnder paragraph 3, Article 4 foreigners that are not geared with permits or haven’t even lodged application after 6 months from when the Decree has entered into force, are subject to irrevocable deportation proposed by the Ministry of Labor, Invalids and Social Affairs (hereinafter ‘MOLISA’) to the Minister of Public Security. Article 4.3 of the Decree illustrates that:

You can read the rest of this article about FDI in Vietnam at Vietnam business news site Vietnam-briefing.com. The site is contributed to by Dezan Shira & Associates, a business advisory firm specialising in FDI China.

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