In the last article: Conditions for establishing a foreign-invested language center in Vietnam, Inco Minh Anh Law Firm advised foreign investors on the conditions to establish a foreign language center. With foreign investment capital in Vietnam, in this article, we will guide investors through the process for establishing foreign-invested language center.
Step 1: Issuing Certificate of Investment Registration for Target Project Establishing a Foreign Language Center
Investors who want to establish a foreign language center by themselves, without joint ventures or association with Vietnamese individuals or organizations must first apply for an Investment Registration Certificate. In the process of applying for an investment registration certificate, the investment registration certificate-issuing agency must obtain appraisal opinions from the Department of Education and Training because it is related to the training program, network planning educational institution.
The list of dossiers is as prescribed in Article 31 of the Investment Law 2020. The contents of the dossier must satisfy all conditions for foreign-invested foreign language centers according to Decree 86/2018/ND- CP and Circular 21/2018/TT-BGDDT. For details, see the article: Conditions for establishing a foreign-invested language center in Vietnam.
Step 2: Establish a project management business Establish a foreign language center
The foreign investor shall submit an application to the Business Registration Office where the Foreign Language Center operates, the dossier includes:
- Business registration application form.
- Company rules.
- List of founding members/shareholders
- A copy of the individual’s legal papers, for members being an individual, the legal representative;
- A copy of the organization’s legal papers for members being an organization and the document appointing an authorized representative; legal papers of individuals for authorized representatives of members being organizations.
- A copy of the Investment Registration Certificate for foreign investors in accordance with the Law on Investment.
Step 3: Apply for a decision on permission for education and announce it on the website of the licensing agency
After a foreign investor has obtained an Investment Registration Certificate, an Enterprise Registration Certificate, fully meets the prescribed conditions and has a regulation on organization and operation of the Foreign Language Center, then apply for a decision to permit educational activities at the Department of Education and Training where its head office is located. List of records include:
- Application form for registration of educational activities
- Copy of IRC, BRC
- Regulations on organization and operation of educational institutions
- Report on the implementation of investment projects
- Explanatory report of eligibility
- Attached documents:
- List of principals (directors), vice-chancellors (deputies of directors), heads of faculties, departments, and chief accountants;
- List and personal curriculum vitae of officials, teachers, lecturers (organic, visiting);
- Description of education level, training level, training major;
- Curriculum, teaching plan, study materials, list of textbooks and key references;
- Enrollment subjects, regulations and enrollment time;
- Training regulations;
- Training scale (students);
- Regulations on tuition fees and related fees;
- Regulations on examination, assessment and recognition of completion of subject programs, modules, and training levels;
- Sample diplomas and certificates will be used.
In fact, it is very difficult for foreign investors to impliment Process for establishing foreign-invested language center in Vietnam by themselves. Inco Minh Anh Law Company Limited – Law firm specializing in Investment, enterprises are ready to guide and advise on investment-related issues, on behalf of foreign investors to carry out procedures with state agencies.
Foreign investors who want a foreign language training center in Vietnam need to meet the conditions prescribed by the WTO and according to the laws of Vietnam. In this article, we – Inco Minh Anh Law Firm advise foreign investors on the conditions for establishing foreign-invested language center in Vietnam..
Firstly, conditions according to WTO regulations
According to WTO regulations, the conditions for establishing a foreign-invested foreign language center (CPC 929 including foreign language training) are: Foreign teachers working at training institutions must have at least 5 years teaching experience and must be professionally recognized by the Ministry of Education and Training of Vietnam.
Second, the conditions for establishment in accordance with Vietnamese law
Foreign-invested foreign language centers in accordance with Vietnamese law are short-term training and retraining establishments (Article 28 of Decree 86/2018/ND-CP). According to the provisions of Decree 86/2018/ND-CP, conditions for foreign-invested foreign language centers include:
The first condition, regulations on naming:
The name of the foreign-invested foreign language center is arranged in the following order: “Education or training center”, “Main training branch or group” and proper name. The proper name of the foreign-invested educational institution must not coincide with or cause confusion with the name of the registered educational institution, with the name of the enterprise implementing the investment project; do not use words and symbols that violate the historical, cultural, ethical and fine traditions of the Vietnamese nation. The foreign-invested educational institution has its transaction name in Vietnamese and its international transaction name in English (or in another common foreign language) with equivalent content.
The second condition, the investment rate:
Minimum investment rate is 20 million VND/student (excluding land use costs). The minimum total investment capital is calculated based on the time with the highest expected scale.
The third condition, the condition of facilities:
Having appropriate classrooms in terms of lighting, furniture, equipment and teaching aids; Having an area used for learning and teaching to ensure an average of at least 2.5 m2/learner; There are offices of the board of directors, leaders, teacher’s rooms, libraries and other functional rooms. In case of leasing facilities, the above conditions must be satisfied and the lease is stable for a period of at least 5 years.
The fourth condition, the educational program condition:
The educational objectives must be presented, without any content harmful to national defense and security or the interests of the community; not propagate religion, distort history; does not adversely affect the culture, morality, fine customs and traditions of Vietnam.
The fifth condition, the teacher’s condition:
Teachers must have at least a college degree or equivalent, with a training discipline relevant to their assigned teaching expertise; The maximum student/teacher ratio is 25 students/teacher. Standards for teachers specified in Circular 21/2018/TT-BGDĐT are as follows:
Vietnamese teachers must meet one of the following criteria:
- Having a college degree in foreign language pedagogy or higher;
- Having a college degree in foreign languages or higher and a certificate of pedagogy.
Teachers who are native speakers of foreign languages (for each specific foreign language):
Possess a college degree or higher and an appropriate certificate of training in foreign language teaching.
The teacher is a foreigner (non-native speaker) who meets one of the following criteria:
- Having a college degree in foreign language pedagogy or higher;
- Having a college degree in a foreign language or higher and an appropriate certificate of foreign language teaching;
- Having a college degree or higher, a certificate of foreign language ability of level 5 or higher according to the 6-level foreign language competency framework for Vietnam or equivalent and an appropriate certificate of foreign language teaching.
The sixth condition, the center director’s condition:
The director of the center must simultaneously meet the following criteria (Article 6 of Circular 21/2018/TT-BGDDT):
- Have a good character;
- Having management capacity;
- Graduated from a foreign language university or graduated from university with a foreign language certificate of at least level 3 according to the 6-level Foreign Language Competency Framework for Vietnam or equivalent
- Having experience in the field of education, training and certification.
The above are all conditions for foreign investors when establishing a foreign language center in Vietnam; In the next article, we will guide Investors in the process and procedures for establishing a Foreign Language Center. Follow us for advice, support on investment, business, real estate,… in the fastest way.
The Tax Services sectors (CPC 863) in the WTO Schedule of Commitments are better understood through their functions. Specifically: Tax consulting, tax planning, tax control, .. through regulations that are allowed by law but still must be based on the principles and conditions of establishment as a tax agent. Foreign investors need to comply with the conditions for tax service activities in Vietnam according to the conditions of the WTO and the provisions of Vietnamese law.
What occupations does the tax service cover?
According to the WTO Schedule of Commitments, tax services include the following activities:
Business tax planning and consulting services (CPC 86301)
A service that advises businesses on how they can handle their business in order to minimize the impact of corporate income tax on their profits by taking advantage of all the benefits provided by the permitted law.
Exclusion: Similar consulting services but including preparing or reviewing various incomes and reports for clients listed in subsection (business tax preparation and review services).
Business tax preparation and review services (CPC 86302)
Services include preparing, reviewing for businesses the earnings and reports necessary for compliance with income tax laws and regulations and protecting these results if required by tax authorities prove. This service may include tax planning and control.
Business tax preparation and review services for individuals (CPC 8630)
Services include advising individuals on measures to minimize the impact of corporate income tax on their profits by taking advantage of all rights permitted by law and/or Prepare tax returns and reports required to comply with tax laws and regulations.
Other tax related services (CPC 86309)
Services include assisting businesses in income tax planning and control and preparing all documents required by law.
Conditions for foreign investors providing tax services in Vietnam
According to the WTO Schedule of Commitments
Within 01 year from the date of accession, the licensing will be done on a case-by-case basis and the number of service providers will be decided by the Ministry of Finance depending on the needs and the development of the Vietnamese market, and foreign-invested tax service providers are only allowed to provide services to foreign-invested enterprises and projects with foreign funding in Vietnam.
Conditions for providing tax services under Vietnamese law
Tax services are classified as tax consulting activities, supporting tax procedures within the scope of activities of tax procedure service businesses, therefore, to participate in this service business. In Vietnam, foreign investors need to consider and pay attention to the following conditions in the Law on Tax Administration 2019.
Tax service organization (hereinafter referred to as tax agent) is an enterprise established and operating in accordance with the law on enterprises, performing services as agreed upon with taxpayers. Enterprises that are eligible to provide tax procedure service business shall register with the Tax Departments of provinces and centrally run cities for a certificate of eligibility to provide tax procedure services.
Conditions for issuance of a Certificate of eligibility for business in tax procedure services include:
- Being an enterprise established in accordance with the law.
- There are at least 02 people who are granted practice certificates of tax procedure service, working full-time at the enterprise.
Foreign individuals who want to do business, provide tax services in Vietnam or establish or work as an employee at a tax service provider in Vietnam must have a tax procedure service practice certificate issued by the General Department of Taxation is granted.
Conditions for granting a tax procedure service practice certificate:
- Being a Vietnamese or a foreigner who is allowed to reside in Vietnam for one (01) year or more fully meets the following conditions:
- Not falling into the categories specified in Clause 4 – Article 105 of the Law on Tax Administration 2019 about those who are not allowed to work as tax agents (cadres, civil servants, people who have lost their civil capacity acts, people who are prosecuted for criminal liability). criminal liability….)
- Possess a college degree or higher in economics, finance, accounting, auditing, law (specializing in economic law) and have worked in this field for two (02) years or more up to the date of application submission.
With many years of experience in providing legal advice to foreign enterprises, Inco Minh Anh Law Firm – Law Firm is ready to advise, on behalf of foreign investors to carry out procedures with state agencies to conduct tax service activities, contact us via:
The trend of “online shopping” becoming more popular and booming has made e-commerce activities more and more developed. Multinational corporations are very interested in investing in e-commerce platforms and want to expand their operations globally. In this article, Inco Minh Anh Law Firm will help foreign investors better understand the conditions of E-commerce services operation in Vietnam.
What is E-commerce service?
According to the provisions of Decree 09/2018/ND-CP, “E-commerce service is a commercial activity whereby an e-commerce service provider sets up an e-commerce website to provide an environment for other traders, organizations and individuals conducting trade promotion activities, selling goods or providing services”. The most obvious form of e-commerce activities is to provide an e-commerce website for organizations and individuals to carry out activities related to selling goods and providing services. E-commerce services in the WTO schedule of commitments have not been directly recognized through a CPC code. Based on the nature of e-commerce activities, investors can refer to the registration of the following CPC industry codes: Software Implementation Services (CPC 842), Other Computer Services (CPC 849), Data Processing Services (CPC 843),…
Conditions for business of E-commerce services in Vietnam with foreign investors
E-commerce activities belong to the list of industries and professions with conditional market access for foreign investors, so the applicable conditions are different from those of domestic investors. Conditions for a foreign-invested economic organization providing e-commerce services to be granted a business license as prescribed in Decree 09/2018/ND-CP include:
- Having a financial plan to carry out the activities requested for a business license;
- No overdue tax debt in case it has been established in Vietnam for 01 year or more.
Because e-commerce activities have not been committed to accessing the market in the international treaties that Vietnam is a member so investors must meet the following criteria:
- Comply with the provisions of specialized laws;
- Matching the level of competition of domestic enterprises in the same field of operation;
- Ability to create jobs for domestic workers;
- Ability and level of contribution to the state budget.
The business license shall be issued by the Department of Industry and Trade where the foreign-invested economic organization is headquartered. The term of the Business License is 5 years. After obtaining the business license, the company providing e-commerce services must also carry out the procedures to register the website to the Ministry of Industry and Trade according to the provisions of Decree 52/2013/NĐ-CP.
Some e-commerce platforms in Vietnam
The provision of e-commerce services by foreign-invested economic organizations is still strictly controlled, but foreign investors have been allowed to invest in service-providing companies, typically the 4 largest e-commerce platforms in Vietnam today, Shopee, Lazada, Tiki, and Sendo, all have foreign investment capital. In which, Lazada has the majority of capital of Alibaba Group, Sendo currently has nearly 35% of domestic capital and more than 65% of capital comes from 16 foreign shareholders.
The provision of e-commerce services, in addition to requiring investors to establish economic organizations, must also apply for a business license. The process for investors to provide e-commerce services in Vietnam is quite complicated because it has to go through the opinion of the Ministry of Industry and Trade. Inco Minh Anh Law Firm is ready to support investors to answer and carry out necessary procedures to be able to go into operation, please contact us immediately:
Employment service is one of the supporting industries that attracts a lot of attention from foreign investors. So how do Decree 23/2021/ND-CP and Decree 31/2021/ND-CP come into being with regulations on conditions for working employment service with foreign investors? Let us clarify in this article.
Firstly, what activities does employment services include?
According to the provisions of Article 36 of the Employment Law 2013, employment services include consulting and job placement activities; supply and recruit labor at the request of the employer; Collect and provide information on the labor market.
Thus, it can be understood that employment service is a service activity of an organization that has the function of providing and introducing jobs in order to create a product or service, whereby the service provider carries out recruitment and training activities according to the needs, conditions and standards of the client being the employer. The result of employment products and services is that employees find a suitable working position, and the employer finds a suitable person in charge of the job they need to recruit. Employment service organizations include employment service centers and employment service businesses. Foreign investors doing business in the field of employment services must establish an enterprise.
Secondly, conditions for working employment service
Enterprises of foreign investors in Vietnam providing employment services must be granted employment service licenses. Article 14 of Decree 23/2021/ND-CP stipulates the conditions for being granted a license to provide employment services, including:
Conditions on location
Location of the head office or branch to organize employment service activities must be owned by the enterprise or leased stably by the enterprise under a contract of 03 years (36 months) or more.
Conditions on deposit
Enterprises performing employment service activities must make a deposit of VND 300,000,000 at a Vietnamese commercial bank or a foreign bank branch lawfully established and operating in Vietnam.
Conditions for the legal representative of the enterprise
The legal representative of the employment service enterprise must ensure:
• Being an enterprise manager in accordance with the Law on Enterprises;
• Not falling into one of the following cases: being examined for penal liability, being detained, serving prison sentences, serving administrative handling measures at compulsory detoxification establishments, educational institutions Compulsory, fleeing, restricted or incapacitated for civil acts, having difficulties in cognition or behavior control, being banned by the Court from holding certain posts, practicing professions or doing related jobs. regarding employment services;
• Having a university degree or higher or having worked directly as a professional or in managing employment or labor supply services for full 02 years (24 months) or more within 05 consecutive years before license application.
The job service market currently has many large foreign-invested recruitment companies, such as Manpower Vietnam, J-Job, NIC, Talentnet, etc.
Thirdly, restrictions on activities of sending workers to work abroad under contracts of foreign-invested enterprises in Vietnam.
The service of recruiting workers to work abroad under contracts is an industry on the list of industries and trades not yet accessible to the market for foreign investors promulgated together with Decree 31/2021/ND- CP. In Article 8 of the Law on Vietnamese workers going to work abroad under contract in 2020 (effective from January 1, 2022), it stipulates: “Service activities to send Vietnamese workers to work abroad Outside of the contract are conditional business lines and investment lines and can only be performed by Vietnamese enterprises that have a license to operate the service of sending Vietnamese workers to work abroad under a contract issued by the Minister of Labor, War Invalids and Social Affairs”.
Thus, the current Vietnamese law does not allow foreign investors to provide the service of sending workers to work abroad. Currently, this service is still considered a service that needs to be strictly controlled, in order to avoid risks for workers when working abroad. Therefore, businesses providing this service must ensure strict conditions as prescribed by law and foreign investors are still not allowed to invest in this industry.
Foreign investors have questions about regulations related to business conditions with foreign investors or need to learn and update new points of labor law, investment law or have any other needs. For any other legal advice, please contact us immediately:
Conditions for establishment of short-term training and retraining establishments of foreign investors in Vietnam
Conditions for establishment of short-term training of foreign investor in VN under the Education Service and is one of the industries and professions with conditional market access for foreign investors. Accordingly, a short-term training and fostering institution is a foreign-invested educational institution, including a center for training and fostering foreign languages, informatics, culture, skills, expertise, professionalism, including training and retraining institutions established by foreign diplomatic missions or intergovernmental international organizations licensed to operate in Vietnam (Article 2 of Decree 86/2018ND-CP)
For example: Foreign language training center, Informatics training center, Soft skills training center (cooking, dancing, garment,…),….
Firstly, conditions for foreign investors according to the WTO schedule of commitments
Short-term training and retraining institutions in the adult education service industry (CPC 924) are committed by Vietnam to open freely and without restrictions from January 1, 2009. Foreign investors with nationality as a member of WTO can establish short-term training and retraining establishments with a maximum foreign capital of 100% in Vietnam.
Secondly, conditions according to Vietnamese law (Decree 86/2018/ND-CP)
Capital conditions (Article 35):
Must have an investment rate of at least 20 million VND/student (excluding land use costs). The minimum total investment capital is calculated based on the time with the highest expected scale.
Conditions on facilities (Article 36):
• Having appropriate classrooms in terms of lighting, furniture, equipment, and teaching aids;
• Having an area used for learning and teaching to ensure an average of at least 2.5 m2/learner;
• There are offices of the board of directors, leaders, teachers’ rooms, libraries and other functional rooms.
Conditions on the training program (Article 37):
The educational program must reflect the educational objectives and must not contain any content harmful to national defense, security or the interests of the community; not propagate religion, distort history; must not adversely affect the culture, morality, fine customs and traditions of Vietnam and must ensure the connection conditions between educational levels and training levels. Organized educational programs include:
• Vietnam’s educational program in accordance with Vietnamese law;
• Foreign short-term training and retraining programs;
• Training programs at university, master and doctoral degrees from abroad within the framework of training links with foreign countries.
Conditions for teaching staff (Article 38):
Teachers must have at least a college degree or equivalent, with a training discipline relevant to their assigned teaching specialty. The maximum student/teacher ratio is 25 students/teacher.
Note to investors: When carrying out the procedures for setting up a short-term training and retraining institution in Vietnam, foreign investors need to prove the investor’s capacity when meeting all the conditions under the provisions of this Law. regulations of Vietnamese law on dossiers, step-by-step establishment of short-term training institutions and implement those conditions in practice after being approved by the competent authority and carry out the procedures for obtaining an operating license and posting notices on the website of the licensing authority.
Inco Minh Anh Law Firm – Law firm specializing in Investment, enterprises are ready to guide and advise on investment-related issues, on behalf of foreign investors to carry out procedures with state agencies. To receive the latest legal information, to provide professional legal services for businesses, please contact us.
In order to improve efficiency and investment cooperation, in line with planning and development orientation of key sectors and areas on the basis of ensuring security, national defense and sustainable development and environmental protection in Vietnam, The Government of Vietnam has promulgated the Investment Law 2020, officially effective from January 1, 2021 with many provisions to encourage the development of investment projects that have a great impact on Vietnam’s socio-economic development and attract foreign investors. Specifically, Article 20 of the Law on Investment 2020 provides for the first time the form of special investment incentives and support with the following contents:
Firstly, about the subjects entitled to special investment incentives and support
“Investment incentives” are understood as beneficial policies given to investors by the State when investors have investment activities in industries and areas encouraged by the State.
“Investment support” is a measure that the State creates opportunities for investors to enjoy when certain conditions are met in order to attract investment.
Accordingly, group of subjects entitled to special investment incentives and support in the investment law 2020 include:
The beneficiaries of special investment incentives and support belong to the group of subjects with investment projects that have a great impact on the socio-economic development of the country. These investment projects are specified in Clauses 2 and 6, Article 20 of the Law on Investment 2020, as follows:
- New establishment investment projects (including the expansion of such newly established projects) innovation centers, research and development centers with total investment capital of 3,000 billion VND or more. currently disbursing at least VND 1,000 billion within 03 years from the date of issuance of the Investment Registration Certificate or approval of the investment policy;
- National Innovation Center are established by decision of the Prime Minister. For example, the National Innovation Center (NIC), based in Hoa Lac Hi-Tech Park, established under Decision No. 1269/QD-TTg, operates under an autonomous mechanism. With the function of supporting and developing Vietnam’s startup and innovation ecosystem, contributing to innovating the growth model based on science and technology.
- Investment projects in industries and trades with special investment incentives (List of industries in Appendix 2 of Decree 31/2021/ND-CP) with an investment capital of 30,000 billion VND or more, the solution is to be implemented minimum amount of VND 10,000 billion within 03 years from the date of issuance of the Investment Registration Certificate or approval of the investment policy.
- Particularly important investment projects or special administrative – economic units (typically Phu Quoc)
The Law on Investment 2020 has been based on three criteria: 1. Industry and field of investment, 2. Total registered capital for investment, and 3. Time limit for disbursement of investment capital to distinguish projects enjoying special investment incentives and support from some projects enjoying other investment incentives. These projects are on the list of beneficiaries of incentives under Clause 2, Article 15 of the Law on Investment 2020 and Article 19 of Decree No. 31/ND-CP. Such amendments and supplements are necessary to enhance, attract and promote high-quality investment in fields to develop the quality of life of Vietnamese people.
Note: some target groups are not eligible for special investment incentives and support:
Special investment incentives are applied to investors with the aim of ensuring a stable and fair legal environment, bringing benefits to society in general and areas with socio-economic conditions. difficult, especially difficult in particular. However, projects that are not entitled to special investment incentives and support specified in Clause 5, Article 15 and Clause 5, Article 20 of the Law on Investment 2020 include:
• Investment projects that have been granted investment certificates; investment registration certificates or approved investment policies before the effective date of this Law (before January 1, 2021);
• Mineral mining investment projects;
• Investment projects on production and trading of goods and services subject to excise tax under the provisions of the Law on Special Consumption Tax, except for projects on production of cars, aircraft, and yachts;
• Investment projects to build commercial houses in accordance with the law on housing.
The above projects do not enjoy special incentives and support due to the development orientation of “green economy” in Vietnam as well as in many countries around the world. The failure to apply special incentives and support to discourage investment in areas that are harmful to the environment (mineral extraction, etc.) or have adverse effects on human health (trade in alcohol, beer, cigarettes, cigars…) to protect morality, public order, human life, and natural resources.
Secondly, about level of investment incentives
Projects enjoy special investment incentives in accordance with the Law on Corporate Income Tax and the law on land. Including the main contents (tax incentives, and investment support):
Corporate income tax: 5% reduction in tax rate, maximum period not exceeding 37.5 years; about tax exemption/reduction period: 6 years of exemption, 13 years of reduction (50% of payable tax) (Article 14 Law on Corporate Income Tax);
Land rent, water surface rent: the land rent and water surface rent exemption period shall not exceed 22.5 years; the reduction of not more than 75% of the land rent is guidelined in Decree 45/2014 on collection of land use fees.
Investment support: projects eligible for investment support are implemented in the form specified in Clause 1, Article 18 of the Law on Investment 2020 and Clause 6, Article 20 of Decree No. 31/2021/ND-CP, including:
• Supporting the development of technical and social infrastructure systems inside and outside the fence of investment projects;
• Supporting in training and developing human resources;
• Supporting in credit;
• Supporting in access to production and business premises;
• Supporting in production and business establishments to relocate under decisions of state agencies;
• Supporting in scientific and technical, technology transfer;
• Supporting market development, providing information; research and development support.
Thirdly, on the authority to decide on the application of special investment incentives and support
According to the provisions of Clause 1, Article 20 of the Law on Investment 2020, the Government is the competent authority to decide on the application of special investment incentives and support. In addition, the Prime Minister also decides the level and duration of special investment incentives according to the criteria of high technology, technology transfer, Vietnamese enterprises participating in the chain, and the value of domestic production for domestic enterprisesin vestment projects specified in Clause 2, Article 20 of Law on Investment 2020. Including projects:
• Innovation center, research and development center with total investment capital of 3000 billion VND, disbursed at least 1000 billion VND/03 years;
• National Innovation Center;
• Special industries with investment incentives with total investment capital from 30000 billion VND, disbursed at least 10000 billion VND/03 years.
To further analyze the new points in investment incentives, evaluate investment opportunities and incentives for investors under the new investment law 2020, customers, businesses and investors domestic and foreign investors please contact us – Trustconsulting – the leading prestigious investment law consulting firm in Vietnam for foreign investors
We look forward to cooperating with you!
INCO MINH ANH CO., LTD
Email: [email protected]
Law on Social Insurance 2014, amended and supplemented in 2018 stipulates that “The monthly salary on which social insurance premiums are based will be the salary plus salary-based allowance and other amounts as prescribed in the labour law”. In labor contracts, besides the salary, the agreement about payment of social insurance is an issue of particular concern to the employer and the employee and there are still many unclear points. We, a law consulting firm Inco Minh Anh, will analyze and clarify in this article based on new circulars issued by the Ministry of Labor, War Invalids and Social Affairs.
Firstly, the amounts included in the monthly salary to pay social insurance premiums (mandatory) include:
1. The salary by job or title is the salary calculated according to the time of the job or title according to the salary scale and salary table developed by the employer in accordance with the law; for employees who are paid by product or package salary, it is the salary calculated over time to determine the product unit price or package salary;
2. Salary-based allowance to compensate for factors on working conditions, job complexity, living conditions, and level of labor attraction that the salary agreed in the labor contract has not been taken into account or calculated not enough.
3. Other amounts can determine the specific salary along with the salary agreed in the labor contract and pay regularly in each pay period.
The amounts included in the monthly salary on which social insurance premiums are based are regular incomes, and it is easy to determine a specific amount. This makes it easy for enterprises to determine the insurance payment obligation for each employee. At the same time, the insurance agency also easily manages the declaration and payment of social insurance.
Second: Amounts not included in the monthly salary to calculate the payment of social insurance (stipulated in Circular 06/2021/TT-BLDTBXH effective from September 1, 2021) include:
Bonuses; initiative bonus; mid-shift meal; allowances for petrol, phone, transportation, housing, child care, and child rearing; support when the employee has a dead relative, the employee has a married relative, the employee’s birthday, allowances for the employee in difficult circumstances when suffering from a work accident, occupational disease and other allowances that are recorded in a separate amount in the labor contract.
Thus, not all incomes recorded on labor contracts are included in the monthly salary on which social insurance premiums are based. Therefore, employers need to understand these provisions in order to stipulate salaries, expenses, and support for employees in accordance with the demand of the business as well as to ensure the provisions of the law.
In reality, many enterprises are confused in determining the amounts included in the monthly salary on which social insurance premiums are based, leading to the result of miscalculation of the insurance obligation. In case the enterprise determines the monthly salary on which social insurance premiums are based, including optional amounts, it will lead to an increase in the obligation for both employees and employers. In case, due to an error, there is a lack of calculation of the amounts included in the monthly salary on which social insurance premiums are based, the enterprise may be sanctioned for the act of improperly paying social insurance premiums when the insurance agency checks their business.
Thirdly, about pay grades, each salary-based allowance and other amounts, the law does not stipulate a minimum or maximum level
The current Labor Code prefers the agreement between the parties and the regulations of the enterprise. Article 103 of the Labor Code 2019 stipulates that: “Regimes on wage raise, wage rank promotion, allowances and subsidies and incentive regimes for employees shall be agreed upon in labor contracts and collective labor agreements or regulations of employers”. Therefore, the employee’s monthly salary on which social insurance premiums are based depends on the agreed salary by the parties recorded in the labor contract (not lower than the regional minimum salary) and other regulations of the enterprise. When declaring and paying social insurance premiums, employers need to pay attention to the above provisions not only for ensuring their interests but also ensuring complying with the law.
Enterprises and employees have questions about regulations related to labor law, labor agreement, social insurance in Vietnam, need to learn and update new points of labor law, legal insurance law or have any other legal advice needs, please contact us immediately:
INCO MINH ANH CO., LTD
Email: [email protected]
Time is counted as hours of paid work according to the Labor Code 2019
Mid-hour breaks are counted into working hours when working in continuous shifts;
Take breaks according to the nature of the job;
Rest required during labor included in the labor norm for human physiological needs;
Take a 60-minute break every day for a female employee nursing a child under 12 months old;
Take a 30-minute break every day for female employees during menstruation;
The time to stop working is not due to the employee’s fault;
Training time for labor safety and hygiene;
Time of meeting, study, training is at the request of the employer or agreed by the employer;
Time for meetings, study and training sessions by the superior trade union summons part-time trade union officers according to the law provisions on trade union;
The duration of the employee’s health check-up and occupational disease check-up according to the provisions of law.
Time is considered the working time of the employee to calculate the number of annual leave days according to the Labor Code 2019
Apprenticeship period, if the employee continues to work for the employer after finishing the apprenticeship period.
The probationary period, if the employee continues to work for the employer under the labor contract after finishing the probation period.
Separate paid leave time according to Clause 1, Article 115 of the Labor Code 2019
The period of unpaid leave, if agreed by the employer, must not exceed 01 month.
The time of suspicion of labor accident or occupational disease but the cumulative time must not exceed 6 months.
The time off due to sickness but the cumulative time must not exceed 02 months.
The period of leave to enjoy the maternity benefits in accordance with the law on social insurance
Time off for union activities which is counted as working time in accordance with the law on trade union.
The time to stop working or resign is not due to the employee’s fault. Time off because of work suspension but not subject to labor discipline.
Time of being held in custody or temporary detention but being allowed to return to work due to conclusions of competent state agencies
Register Labor regulations
Enterprises with 10 or more employees must issue the Labor regulations in accordance with the law with the labor-specialized agency of the provincial People’s Committee or the labor-specialized agency under the district-level People’s Committee (authorized by the labor-specialized agency of the provincial People’s Committee). On the basis of the Labor Code 2019, the Ministry of Labor, Invalids and Social Affairs issued Decision 338 / QD-LĐTBXH dated March 17, 2021 providing the procedures for registration of the Labor regulations as follows:
Step 1: Submit the application to the specialized agency
Within 10 days from the date of issuance of the Labor regulations, the employer shall submit 01 set of dossier to the specialized agency where the employer has registered his business.
• Written request for registration of the Labor Regulation;
• Labor regulations;
• Written comments of the organization representing employees at the grassroots about where there is a representative organization for employees at the grassroots level;
• Documents of the employer that have provisions related to labor discipline and material liability (if any).
Process of submitting dossier:
• Submit through the specialist agency’s online Public Service Portal
• Submit directly to the specialized agency
• Submit the application by mail to the specialized agency.
Step 2: Handling dossier
Within 7 working days from the date of receipt of the dossier for registration of the Labor Regulation, if detecting that the Labor Regulation contains illegal provisions, the specialized agency shall notify and guide the employer. amending, supplementing and re-registering the Labor Regulation.
Your company needs advice and implementation of the provisions of the Labor Code 2019; or any other need for legal advice, real estate consulting please contact us directly:
Email: [email protected]
Labor Code 2019 takes effect from the date of 01.01.2021. Some prominent notes for employers are as follows:
1. The probationary period
The Labor Code 2019 requires the parties to sign a probationary contract, which can be recorded into a separate contract, agreed by mouth or recorded in the contents of the labor contract; change the regulations on the subjects who are not required to sign the probationary contract (for those with a labor contract of less than 01 month) and expand the probationary audience. The probation period for each subject is specified in Article 25 of the Labor Code 2019, specifically as follows:
1. 180 days for the position of enterprise executive prescribed by the Law on Enterprises, the Law on management and use of state investment in enterprises;
2. 60 days for positions that require a junior college degree or above;
3. 30 days for positions that require a secondary vocational certificate, professional secondary school; positions of or for technicians, and skilled employees;
4. 06 working days for other jobs.
2. The employer unilaterally terminates without prior notice (Article 36 Labor Code 2019)
Cases where employers unilaterally terminate without prior notice include:
– The employee voluntarily quit his job without having a plausible reason for 05 or more consecutive working days
– The employee is not present at the workplace after the period specified in Article 31
3. Salary regulations
The Labor Code 2019 has a number of additional requirements for employers in terms of wages as follows:
– Not to limit or interfere with the employee’s right to self-determination to spend salary; do not force the employee to spend the salary on buying goods or using services of the employer or other units designated by the employer.
– Each time the salary is paid, the employer must notify the payroll to the employee, clearly stating the salary, overtime pay, night work salary, content and deductible amount (if any). .
– If due to force majeure, the employer has found all remedies but cannot pay the salary on time, it must not exceed 30 days; If the salary is delayed for 15 days or more, the employee must be compensated an amount as prescribed in Article 95.
– In case of resignation due to water and water problems, but not due to the fault of the employer and not the natural disaster … as prescribed in Article 95, the salary must not be lower than the regional minimum wage.
4. Working time, rest time
Maximum overtime hours 40 hours / month (Article 105)
– Additional cases are not allowed to overtime more than 300 hours / year (Article 107)
– In special cases, there will be no limit on overtime hours (Đ108)
– Add jobs with specified working hours and rest time (Article 109)
– Employers are responsible for setting the annual leave schedule after consulting with the employee and must notify the employee in advance.
5. Retirement age
The retirement age for employees is specified as follows:
|2021||Increase annually||Retirement age|
|Male||60 years old 3 months||3 months / year||62 years old from 2028|
|Female||55 years old 4 months||4 months / year||60 years old from 2035|
|Hard work||Less than 05 years|
Changes in retirement age lead to changes in retirement conditions and retirement conditions in some cases (Article 218). For male employees, the salary used as a basis for pension calculation is the average salary of 20 social insurance contributions..
6. Some other new points of Labor Code 2019
– Form a labor contract agreement may be entered through electronic means (Article 14)
– Type of employment contract (Article 20)
– Quoc Khanh vacation 02 days full salary
– A female employee who “works hard” while pregnant can reduce 1 hour of work per day but still receive full salary (Article 137).
– In addition to monetary rewards, which could be property, or any other form (Article 104)
– The statute of limitations for handling the labor force: It is allowed to extend the time limit for disciplinary action by 60 days in some cases (Article 122)
– Some new points about the settlement of labor disputes: Articles 185, 187, 188, 190, 194, 199, …
Your company needs advice and implementation of the provisions of the Labor Code 2019; or any other need for legal advice, real estate consulting please contact us directly:
Email: [email protected]
1. What is M&A?
M&A stands for two English words “merger” and “acquisition“.
M&A is an activity carried out by an individual or an organization that acquires an existing property of another individual or organization. Such existing property can be in the form of a company or a combination of assets, human resources, and methods. model for conducting certain business operations.
2. Types of M&A transactions: M&A is executed under two main types: buying shares and buying assets.
Factors affecting the reason parties choose to buy shares or buy assets to include: commercial, legal, tax, third-party consent, time required to refund transaction, etc. Sometimes, two methods of buying shares and buying assets are combined in one transaction in order to take advantage of advantages and disadvantages of each method.
– Share acquisition: the purchaser will buy shares / capital contribution in an existing and established company to become the sole owner, shareholder or member of that company -> The purchaser has the right to operate and indirectly own the assets that the target company has. Shares purchased by the purchaser become the property of the purchaser and the purchaser has the right to dispose of such shares in accordance with the laws, the charter and a separate agreement between the buyer and other shareholders of the company.
– Buying assets (Business acquisition): the purchaser acquires ownership of the property sold by the seller. Assets can be tangible or intangible, in a broad sense: reputation, human resources, resources, distribution network mạng The purchaser becomes a direct owner of the property and operates the business according to his way. Business acquisition is executed in Vietnam under the form of transfering of investment projects.
– Merger / consolidation (Merger): can also be considered as the third type of M&A transaction, however, in essence, merger / has many similarities with the share purchase: the shareholders of the merged or consolidated company often become shareholders of the merging or acquiring party; The merging or acquiring party inherits the rights and obligations of the merged or consolidate company and often does not have a choice of assets when conducting the merger / consolidation process. This is a stepping stone for two or more companies to be merged / merged together because they are the same owners.
3. The legal nature of M&A:
The decision made by an individual or organization to whether to buy property or to buy shares will be affected by the laws of Vietnam. For example, Vietnamese law does not allow foreign investors to directly buy land in Vietnam, but it is allowed to buy shares in Vietnamese enterprises even if they are “owned many land lots.
Vietnamese regulations is also the reason why this method has many advantages over the other. For example, the law also sets out quite strict conditions that a company that is an investor of a real estate project must meet many conditions in order to be allowed to transfer a real estate project but hardly sets any coditions to shareholders of that company to sell their shares in the company.
An advantage of the ethod of share acquisition:
The purchaser will indirectly own all the assets of the target company and all the government licenses and approvals which the target company has in order to continue conduct current business. In contrast, the purchaser in business acquisition must apply for re-issuance (by amendment or new grant) of almost all the licenses and approvals of the government necessary to carry out the acquired business operation.
If in the business acquisition, the buyer does not inherit any of the seller “sobligations and responsibilities with respect to the purchased property, then in share acquisition, the purchaser must inherit the obligations and responsibilities. of the target company from the seller, equivalent to the
percentage of traded shares. Such obligations and responsibilities may be obligations to partners in contracts signed by the target company, obligations to employees in collective labor agreements, tax obligations to the state or legal liability that has arisen or is potential due to the law violation of the target company.
4. M&A in Vietnam
In fact, merger is rarely used in M&A transactions in Vietnam because the laws of Vietnam are still sketchy, general and lack of detailed instructions. The administrative procedures for transferring assets from the merged or consolidated company to the merging or acquiring company are unclear, time-consuming and do not have a common operating mechanism. The merging or acquiring company must inherit the debts and other obligations of the consolidating companies and the merged companies. This creates a risk for the buyer.
When buying shares in the merged or consolidated company, the purchaser is only at risk with all the assets of the company being merged or merged. When consolidating, merging, the purchaser must be responsible with all his assets.
5. M&A support services
M&A in Vietnam is a form of activity that has not really developed, therefore businesses and investors, especially foreign investors, often face many difficulties.. Clients wishing to transfer, purchase, merge or consolidate can contact us for assistancein finding a transfer partner and legal support.
If you need to use the service, please contact us:
INCO MINH ANH Co,.Ltd
Email: [email protected]
Chưa được phân loại, Investment & Consulting, News & Event, Tin tức văn bản pháp luật, Tu van Doanh nghiep
The Labor Code 2019 was officially passed by the National Assembly Viet Nam XIV on November 20, 2019. The Labor Code includes many new provisions compared to the Labor Code 2012 and if the Labor code takes effect, it’s will affect many aspects of the lives of workers. Especially in those new regulations, the increase in retirement age is most concerned by the majority of employees.
Accordingly, Clause 2, Article 169 of the 2019 Labor Code provides: “The retirement age for workers in normal working conditions is adjusted to full 62 years old for male workers in 2028 and full 60 years old for female workers in 2035.
From 2021, the retirement age for ordinary employees is 60 years and 03 months for male workers and 55 years and 04 months for female workers; after that, every year it will increase by 3 months for male workers and 04 months for female workers. ”
Therefore, the retirement age for employees in Labor Code 2019 is increase to more 02 years for male workers and 05 years for Woker women than to the old rule. This change will increase according to the roadmap so that workers can adapt to this change, as follows:
|Male Worker||Female Worker|
|2021||Full 60 years 03 months||Full 55 years 04 months|
|2022||Full 60 years 06 months||Full 55 years 08 months|
|2023||Full 60 years 09 months||Full 55 years|
|2024||Full 61 years||Full 56 years 04 months|
|2025||Full 61 years 03 months||Full 56 years 08 months|
|2026||Full 61 years 06 months||Full 57 years|
|2027||Full 61 years 09 months||Full 57 years 04 months|
|2028||Full 62 years||Full 57 years 04 months|
|2029||Full 62 years||Full 58 years|
|2030||Full 62 years||Full 58 years 04 months|
|2031||Full 62 years||Full 58 years 08 months|
|2032||Full 62 years||Full 59 years|
|2033||Full 62 years||Full 59 years 04 months|
|2034||Full 62 years||Full 59 years 08 months|
|2035||Full 62 years||Full 60 years|
If you need to use the service, please contact us:
INCO MINH ANH Co,.Ltd
Email: [email protected]