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New regulations create favorable conditions for foreign employees

30/3/16


On February 02, 2016, the Government issued Decree No.11/2016/ND-CP guiding a number of articles of the Labor Code on foreigners working in Vietnam (“Decree No.11”). Decree No.11 will take effect on April 01, 2016 and replace Decree No.102/2013/ND-CP dated September 05, 2013 guiding a number of articles of the Labor Code on foreigners working in Vietnam (“Decree No.102”) and Point (a) of Item (4) of Resolution No.47/NQ-CP of the Government dated July 07, 2014 (“Resolution No.47”).
Vietnam will lift restrictions on hiring foreign workers, allowing them to take even manual unskilled jobs for the first time in years.
According to a decree that will become effective on April 1, local employers are still required to seek candidates from the local workforce first. But if they fail to do so after a certain period of time, they can hire foreign workers instead.
Since 2003, foreigners have been banned from positions that Vietnamese workers can fill, which generally means only a number of foreign experts with high qualifications and sought-after skills are welcome.
Under the new rule, government agencies will assist employers to find the right Vietnamese candidates. If that 30-day search proves unsuccessful, the employers can look for workers from overseas. The required search period is 60 days if more than 500 workers are needed.
The decree also states that foreign teachers and researchers at educational institutions, such as high schools and universities, will no longer have to apply for a work permit. They will instead only need to obtain approval from the Ministry of Education and Training.
English teachers at language centers will still need work permits. Students from international schools do not need a permit for their internship in Vietnam.
The process of issuing a work permit will be shortened from 10 to seven days. Renewals take three days to process.
The maximum validity of a work permit will remain two years.
According to the decree, illegal foreign workers will be deported within 15 days after being caught.

Here are some new significant regulations of Decree No.11:

1. Changes to definition of “experts”, “managers” and “executive directors”

1.1. Stricter conditions for “experts” (“chuyên gia” in Vietnamese)
Under Decree No.102 and Resolution No.47, a foreigner shall be deemed as an “expert” if: (i) He is certified by a relevant foreign authority/ organization as an expert; or (ii) He possesses a university degree or higher; or (iii) He has at least five (05) years of working experience relevant to the job position for which the work permit is applied.
Decree No.11 has combined (ii) with (iii), so that a person shall be deemed as an expert in one of the two (02) following cases: (i) He is certified by a relevant foreign authority/organization as an expert; or (ii) He possesses a university degree or higher and has at least three (03) years of working experience. It is clear that the required years of experience decreases from five (05) years to three (03) years, but the condition for the expert is stricter because it is a dual condition requiring both qualification and experience. Decree No.11 also provides that the Prime Minister may determine some exceptions for the conditions of an expert.
1.2. Clear definitions of “managers” and “executive directors” (“nhà quản lý”, “giám đốc điều hành” in Vietnamese)
Decree No.11 has a clause to define “managers” and “executive directors” (which have not been defined in Decree No.102 but defined in Circular No.03/2014/TT-BLDTXBH dated January 20, 2014 (“Circular No.03”)). By referring to the 2014 Law on Enterprise, Decree No.11 defines a “manager” as the following person: the owner of a private company, a general partner, the Chairperson of the Members’ Council, a member of the Members’ Council, president of a company, chairperson of the Board of Directors, member of the Board of Directors, director or general director and persons holding other managerial positions who are competent to enter into the company’s transactions on its behalf in accordance with the company’s charter; the manager is also the head or deputy head of the agency or organization. An “executive director” is the head of and directly manages subordinate units/ departments of an agency, organization or enterprise.

2. Simplifying the application file for the work permit

2.1. Not requiring the written approval of the chairperson of the provincial People’s Committee in the application file: Under Decree No.102, the written approval of the chairperson of the provincial People’s Committee must be obtained and submitted enclosed with the application file for the work permit. However, Decree No.11 does not require the written approval in the application file, but obtaining this document from the chairperson of the provincial People’s Committee is still required.
2.2. The validity of the health certificate is within twelve (12) months: Decree No.11 provides that the health certificate is acceptable if it is issued within twelve (12) months prior to the submission of the application file for the work permit rather than six (06) months as provided currently in Circular No.14/2013/TT-BYT guiding the health check-up. The health certificate can be issued by either by the competent Vietnamese or foreign health establishment.
2.3. If a foreigner resided in Vietnam, only the Vietnamese criminal record is required: The existing provision provides that a foreign criminal record and a Vietnamese criminal record must be obtained for the work permit purpose although the foreigner resided in Vietnam. From April 01, 2016, only the Vietnamese criminal record is required for this case. However, in our experience, this new provision should need more clarification and the foreign criminal record may be required in some circumstances in practice; for example, if a foreign had resided in Vietnam for 02 years, but then he left Vietnam to live in his country in 01 year, now he returns to Vietnam, the criminal record issued by the competent authority in his country should be required as the Vietnamese authority will not know whether he did commit any crime in his country before he returns to Vietnam.
2.4. Providing special procedures for some special circumstances: If a foreigner falls in one of the following circumstances, the application file for the work permit will be more simplified, in particular: (i) If a foreigner currently has an effective work permit and plan to work for another employer in the same position, the health certificate, the criminal record and the document proving the foreigner is the manager, executive director, expert or technician are not required; (ii) If a foreigner currently has an effective work permit but plan to work in another position for the same employer, the health certificate and the criminal record in the application for the new work permit are not required; or (iii) If a foreigner has an expired work permit and plan to continue working in the same position for the same employer, the document proving the foreigner is manager, executive director, expert or technician is not required.
With this simplification, Decree No.11 is more practical and helps foreigners and employers to save time and cost for the work permit in some cases, especially when, for example, foreigners are not required to prove their eligibilities for their employed positions again or provide their criminal records that consume time to obtain.
Besides the simplification as mentioned above, for documents regarding the fact that foreigners are the managers, executive directors, experts or technicians, Decree No.11 does not use the phrase of “confirmation documents” any more, instead, it uses “proving documents” without any clarification. As the result, foreigners and their employers may have difficulties to determine which proving documents should be prepared to be acceptable for the work permit purpose.

3. Changes in timeline of applying and issuing/reissuing the work permit

3.1. Reducing the time of issuing the work permit from ten (10) working days to seven (07) working days from the date that the competent authority fully receives all required documents; and
3.2. Prolonging the time of applying for the re-issued work permit in case the current work permit of the employee expires i.e. forty-five (45) days to five (05) days prior to the expiry of the work permit (the current provision is only fifteen (15) days to five (05) days prior to the expiry date of the work permit). This will provide the foreign workers with more time in preparing the documents for the re-issuance of their work permits prior to the expiry dates.

4. Changes in work permit exemption

4.1. Supplementing some cases of exemption from the work permit
Decree No.11 provides several new cases where foreigners are exempt from the work permit, in particular: (i) Foreigners are appointed by foreign agencies/organizations to conduct research at international schools under the management of foreign diplomatic missions or international organizations in Vietnam; (ii) Foreigners are certified by the Ministry of Education and Training to teach or conduct researchs at educational and training institutions in Vietnam; (iii) Foreigners enter Vietnam to work as managers, executive directors, experts or technicians for a period of less than thirty (30) days and the accumulated working period in Vietnam of not exceeding ninety (90) days per year; (iv) Students who are studying at foreign schools/training institutions enter Vietnam pursuant to an internship agreement at agencies, organizations or enterprises in Vietnam; (v) Relatives of staffs of foreign diplomatic missions in Vietnam after being permitted by the Ministry of Foreign Affairs, except otherwise provided by international treaties to which Vietnam is a signatory; and (vi) Foreigners holding an official passport enter Vietnam to work for State agencies, political organizations, or socio-political organizations.
Additionally, Decree No.11 removes a case from the list of exemption from the work permit, i.e. where the foreigners who hold a master’s degree or an equal do consultancy, teach or conduct scientific research at higher education institutions or vocational colleges within thirty (30) days.
4.2. Defining the term of work permit exemption certificate
While current regulations are silent on the term of a work permit exemption certificate, Decree No.11 provides that the term of this certificate will not exceed two (02) years (as the term of the work permit).
4.3. Providing cases where the work permit exemption certificate is not required
If foreigners are exempt from the work permit, they have to obtain the work permit exemption certificate, except for the following: (i) Foreigners enter Vietnam for under three (03) months to offer services for sale; (ii) Foreigners enter Vietnam for under three (03) months to deal with complicated technical or technological problems that adversely impact or are at risk of exerting adverse impacts on production and business activities and that cannot be handled by Vietnamese and foreign experts who are currently in Vietnam; and (iii) Foreigners enter Vietnam to work as managers, executive directors, experts or technicians for a period of less than thirty (30) days and the accumulated working period in Vietnam of not exceeding ninety (90) days per year.
4.4. Not requiring the written approval of the chairperson of the provincial People’s Committee in some exempt cases
Decree No.11 provides that for the cases where an exemption certificate is not required (provided in Item 4.3 herein), the written approval of the chairperson of the provincial People’s Committee for employing these foreigners is not required either.
Additionally, the written approval is also not required in the two (02) following cases: (i) Students who are studying in Vietnam works in Vietnam; in this case, employers shall notify the employment to the provincial-level State management agency of labor seven (07) days in advance; and (ii) Students who are studying at foreign schools/training institutions enter Vietnam pursuant to an internship agreement at agencies, organizations or enterprises in Vietnam.
In general, with new provisions, from April 01, 2016, the procedure of applying for the work permit becomes simpler and more convenient for employers and foreigners. The extension of cases exempt from the work permit gives foreigners opportunity to work in Vietnam freely by which employers can take advantage of the foreign labor workforce effectively for their business./.
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