Vietnam Issues Resolution Supporting Businesses Affected by COVID-19: Resolution 105
As done previously, the Vietnamese government has issued another law supporting businesses to overcome the effects of the pandemic. Resolution 105/NQ-CP was issued on September 9 and goes in effect on the date to support businesses, cooperatives, and household businesses affected by COVID-19.
Namely the Resolution aims to meet the dual goals of containing the pandemic and resuming business production and activities to spur economic growth. It also aims to support and resolve issues related to production, business operations, and reducing the number of businesses, which temporarily suspended production or that have gone bankrupt.
In addition, the Resolution looks at supporting enterprises in the form of credit support, tax extensions along with policies to support employers and employees.
One of the most significant development is the easing of regulations for issuing, extending, and certification of work permits for foreign workers in Vietnam. Decree 152, which was issued in February, had tightened regulations on hiring foreign workers prompting several businesses to voice concerns.
The government has taken note and has asked the Ministry of Labor, Invalids and Social Affairs (MoLISA) to instruct local provincial authorities to relax restrictions and some conditions on the issuing and renewing of work permits. Specifically, these include:
- As per Decree 152, the university degree had to be related to the job position in Vietnam. Now as per Resolution 105, authorities have been asked to be flexible where the degree does not have to necessarily be related to the job position in Vietnam
- Second, the training field does not have to be related to the job role or relevant experience.
- Thirdly, previously issued work permits can be accepted as work experience of the expert or technical worker rather than work experience from the home country.
- Lastly, as per the Resolution, foreign workers with valid work permits can be sent to another province or city for not more than six months without having to reapply for a work permit. However, the employer must report to the labor department where the foreign workers have gone to work.
- The Ministry of Education and Training has been tasked with cooperating with MoLISA to provide further guidance and qualifications for foreign teachers teaching at short-term training centers, high schools, vocational training centers, and universities as per international best practices.
MoLISA has also been tasked with introducing policies to help with insurance premium support for employees and businesses which needs to be done by September 2021.
On this, Mai Quoc Hung, Associate for Dezan Shira & Associates, HR and Payroll Ho Chi Minh City Offices HR notes that “After delaying contribution to the death and pension fund in Resolution 68 (the business still need to pay after the delay), the waiver of late payment interest for mandatory insurance is another mechanism that allows businesses to reduce their losses. Businesses are already seeing a depletion of funds as they have to maintain a workforce and adapt to the 3-on-site rules to maintain production. Nevertheless, the government is likely to issue special conditions to ensure that the social insurance fund is protected.”
Apart from human resource related issues, the government has also asked relevant agencies to ensure business activity can resume while also dealing with the pandemic. These include:
- The Ministry of Health (MoH) has been tasked with consistent and streamlined procedures for mandatory quarantine and medical surveillance. This will help laborers that come from different provinces with clear requirements on what is required as well as for international arrivals;
- The Ministry of Finance (MoF) has been tasked with implementing policies on reducing taxes, fees, and land rentals. Special consumption tax on domestically manufactured automobiles is expected to be extended until the end of 2021. The MoF will also help support electricity payments and ensure transparency in freight charges for shipping businesses. Highlights include:
- Streamlined customs procedures for products that are required for aid and/or gifts from domestic organizations and individuals for the government;
- Allow businesses to use scanned copies, with digital signatures for required documents rather than hard copies to ease congestion of goods in circulation. However, hard copies are still required after customs clearance;
- The government has asked the Ministry of Transport to ensure stable production and transport of goods. This includes the implementation of a green channel for road and waterway transport nationwide with simple procedures so as to not impede the circulation of products, particularly for essential goods and supplies.
- The Vietnam General Confederation of Labor has been asked to consider waiving the union membership for union members and businesses for those affected by the pandemic in 2021 and 2022.
- The Ministry of Foreign Affairs has been tasked with negotiating a vaccine passport with other countries to reopen the economy. Vietnam has recognized vaccine certificates for 61 countries so far.
Resolution 105 also requests authorities to temporarily suspend unnecessary audits of businesses to a later time for those which were planned in 2021.
The above measures underline the government’s intention to bring the economy up to speed. Businesses have welcomed the new Resolution particularly on the easing of regulations of work permits and experience for foreign workers as these will ease challenges for foreign hires and employers alike. Businesses that want to hire foreigners should ensure they are fully aware of hiring regulations and make preparations accordingly.
Vietnam Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Hanoi, Ho Chi Minh City, and Da Nang. Readers may write to email@example.com for more support on doing business in Vietnam.
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