Molisa set to lift cap on expat employees

May 15, 2007 | 17:38
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Foreign investor pressure could lift the 3 per cent cap on expatriates employed at an enterprise in Vietnam.Le Bach Hong, Deputy Minister of Labour, War Invalids and Social Affairs (Molisa), said the ministry was seeking ways to change Decree 93/2005/ND-CP,

Local businesses could be hiring more skilled foreign workers if Molisa lifts the 3 per cent cap
which governs the recruitment of foreign nationals in Vietnam, to fit the country’s new WTO membership status. However, technical barriers will be issued to control the employment of foreign nationals and encourage employers to hire local labour.
Fierce debate has swirled around the controversial cap with the international business community telling the annual Vietnam Business Forum and CG meetings the limit is a backward policy in the context of Vietnam’s open investment climate and global integration.
However, Hong defended Molisa’s stance and pointed to enterprise surveys which revealed many firms had a 2 per cent foreign worker ratio because “employing an expatriate is in fact more expensive than a local worker”.
“Our desire is to see employers recruit as many Vietnamese workers as possible to help deal with the nation’s unemployment levels. Only in cases where local workers are unavailable to take skilled positions should employers find foreign nationals,” Hong told Vietnam Investment Review.
Skilled workers represent just 25 per cent of the nation’s 45 million strong labour pool and skilled foreigners are needed to make up the shortfall.
“We see that countries around the world have their own requirements upon accepting foreign workers and Vietnam should not be an exceptional case.
“In the case where an enterprise is in need of foreign employees in excess of the limit, it could recruit more foreign nationals than permitted given written approval by the chairman of the provincial or municipal people’s committees, where the enterprise is head-quartered,” he said.
Hong said the current decree was flexible and provincial and municipal people’s committee approval is also exempted if excess of foreign workers is stated in an enterprise’s business licence.
Organisations, which are not subject to the 3 per cent limit, are foreign contractors, representative offices of foreign economic, commercial, financial, banking and insurance companies, health care, cultural, educational and sporting establishments, foreign law firms, socio-political organisations and businesses affiliated with state administrative bodies and co-operatives. However, those organisations must get the green light from a Provincial and Municipal People’s Committee before taking a foreign worker onboard.
Molisa is also working to streamline the processing of foreign worker visas.

By Hoang Mai

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