Labor outsourcing company means an enterprise established in accordance with the Enterprise Law, licensed for labour outsourcing operation, recruits, signs a labour contract with the employees, and then transfer the employee to work and be under the control of another employer while still maintaining the labour relationship with the Labour outsourcing company. So, what is the license for labour outsourcing operation? What are the conditions, procedures and applications for the business and licensing a labour outsourcing operation? The following article will focus on answering the above questions by 5 aspects of Labour Outsourcing Operations in Vietnam. 

1. License for labour outsourcing operation

License for labour outsourcing operation (hereinafter referred to as “LO License”) is a type of sublicense granted to a labour outsourcing company, which is a mandatory condition for a company to operate in the field of labour outsourcing, issued by the (i) People’s Committee of the province where the company is located or (ii) Department of Labour – Invalids and Social Affairs (hereinafter reference as “Labour Department’’) (authorized by the People’s Committee) once the company fully meeting the conditions as prescribed by law.

LO License has a maximum term of 60 months, which can be extended many times. The LO License includes main information such as: Number of the license, company information, its legal representative information, term of the license.

2. Conditions for the LO License

Conditions for granting LO License include conditions for the legal representative of the company and conditions for the deposit, specifically as follows:

  • The legal representative of the company performing labour outsourcing activities must ensure the following conditions:
    • Being a company manager in accordance with the Law on Enterprises;
    • Absent criminal records;
    • Having worked directly as a specialist or a manager in labour outsourcing or labour supplying field for 3 years (36 months) or more within 5 consecutive years before applying for a LO License.
  • Deposit: The company must make a deposit of 2,000,000,000 VND (two billion Vietnamese Dong) to be granted a LO License.

The above deposit must be made at a commercial bank of Vietnam. Purpose: To ensure the salary payment, social insurance, health insurance, unemployment insurance, occupational accident insurance, occupational diseases insurance and other regimes for subcontracted employees as agreed in the labour contracts, collective labour agreements, internal rules and regulations of the labour outsourcing company or paying compensation for employees in case the labour outsourcing company violates the labour contract or causes damage to the outsourced employees by failing to ensure the lawful rights and interests of the outsourced employees.

3. Application for the LO License

Application for the LO License includes:

  • Written request for issuance of LO License.
  • Autobiographical curriculum vitae and a criminal record (No.1)of the company’s legal representative, issued within 6 months from the date of application submission.
  • One of the certified copies of the proof documents which is attesting the legal representative’s working experience in the field of labour outsourcing or supply: labour contract, work contract, recruitment decision, appointing and assigning task decisions; enterprise registration certificate (for the case of  them being the legal representative of the labour outsourcing or labour supply company).
  • Certificate of deposit for labour outsourcing activities.

4. Issuance procedures of the LO License

  • Step 1: The company carries out the deposit procedure of two billion dongs at a commercial bank of Vietnam to be granted a certificate of deposit for labour outsourcing activities.
  • Step 2: After receiving the certificate of deposit for labour outsourcing, the Company submits a set of documents mentioned in section 3 of this article to the Labour Department to apply for a LO License.

Within 20 working days from the date of receipt of the valid application, the Labour Department shall consider and submit it to the Chairman of the People’s Committee to decide on issuance of the LO License.

If the application is invalid, within 10 working days from the date of receipt of the application, the Labour Department shall request the company in written to supplement the application.

Within 7 working days from the date of receiving the dossier submitted by the Labour Department, the President of the provincial People’s Committee shall consider and grant the LO License; in case the LO License is not granted, he/she have to issue a written reply to the company clearly stating the reason for not granting the LO License.

5. Notes

  • Labour outsourcing companies must ensure that they fully meet the conditions for labour outsourcing throughout the operation process.
  • The companies are only allowed to conduct labour outsourcing activities in the fields on the list of jobs that can be outsourced in Appendix II issued together with Decree 145/2020/ND-CP.
  • The companies must not let other businesses, organizations and individuals rent, borrow or use the LO License.
  • The companies must ensure the committed working conditions with the employees; notify employees of the contents of the labour subleasing contract; notify the employee’s curriculum vitae and the employee’s requirements; pay the employees not less than the salary of the employee of the labour subcontractor with the same qualifications; Make records and periodically report to the Labour Department where the Company is located.

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.


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