Establishment of employment service companies

1. Conditions for establishing an employment service company

Employment service companies are allowed to carry out their activities when they are granted employment service licenses.

Conditions for being granted a license:

• Having a stable head office which has a term of at least 03 years (36 months).

• Having a specialized department to carry out employment service activities, including at least 03 employees with college degrees or higher, having full civil act capacity and clear personal background.

• Deposits have been made in accordance with the law. The company must pay a deposit of 300,000,000 VND (three hundred million dong) at the commercial bank where the company opens its main transaction account.

2. Procedures for establishing an employment service company

Step 1: Drafting the registration application of the establishment of an employment service company

The company draft the application dossier for registration of the establishing an employment service company, the dossier include:

• A written request to the Department of Planning and Investment to grant the enterprise a license to establish a company.

• Specific charter of the company.

• List of shareholders and members who contribute capital to the company.

• Relevant documents such as: ID card, passport, citizen identification card or certificate of business registration, establishment decision…

Step 2: Submit the application to the Department of Planning and Investment to be granted a license

After completing the application, the company submits it to the Business Registration Office under the Department of Planning and Investment.

After 3-5 days, the Department of Planning and Investment shall issue a license to the company if the application is valid.

Step 3: Announce the content of business registration certification and engrave the company's seal

Content Announcement:

• After being granted a company registration certificate, the company must make a public announcement on the National Business Registration Portal according to the procedures and pay fees as prescribed. The content to be announced includes the contents of the Business Registration Certificate and the following information: Business lines; List of founding shareholders and shareholders being foreign investors for joint-stock companies.

• The maximum time limit to carry out this procedure is 30 days from the date of being granted the license to establish the employment service company. If after the above time, the company does not announce information about the company, it will be administratively sanctioned from 1 million VND to 2 million VND by the competent authority.

Seal engraving:

• The company must engrave the company's seal, the quantity and form is decided by the company, but it is necessary to ensure that the seal shows the necessary information such as the company name or business code.

• After engraving the seal, the company carries out procedures to publish the seal sample on the national electronic portal along with company information.

Step 4: Apply for an employment service company license 

Companies that meet all relevant conditions and apply for an employment service company license according to regulations, are then allowed to carry out the business activities.

Step 5: Buy a digital signature to pay taxes online

Employment service companies need to register to buy digital signatures to pay taxes online. Companies need to ask the bank to activate the online tax payment function for the company's bank account. The accountant of the employment service company will use this digital signature to make periodic online tax payments for the company.

Step 6: Register a bank account and report the account number to the Department of Planning and Investment

Companies need to register a bank account for the company to be able to conduct money-related transactions. Employment service company owners bring ID card, seal and business registration certification to the bank to open a transaction account for the company. After that, the company has to carry out procedures to report this transaction account number to the Department of Planning and Investment.

Step 7: Hang the company signboard and notify the invoice issuance

The employment service company needs to order a signboard for the company, then proceed to hang the company signboard at the company's headquarters. The size and design of the company sign will depend on the intentions of the enterprise. However, make sure there is enough enterprise information on it such as company name, address, phone number, etc.

In addition, companies need to notify the issuance of invoices and order to print value-added tax invoices according to regulations.

Step 8: Hire an accountant or use an accounting service

Employment service companies need to hire a tax accountant to perform tax declaration and payment duties as prescribed.

Step 9: Proceed to declare and pay tax after establishing the company

As soon as going into operation, the company needs to declare tax within 30 days. If the company fails to submit the declaration in accordance with regulations, the company may be administratively sanctioned according to the provisions of law.

Employment service companies will have to pay the following taxes:

• License tax (paid within 30 days after operating the company). The amount of license tax that needs to be paid will depend on the charter capital declared by the company. Specifically, in case the charter capital is over 10 billion VND, companies have to pay 3 million VND in license tax per year, and in case the charter capital is under 10 billion VND, companies have to pay 2 million VND in license tax per year.

• Corporate income tax, paid based on the annual profit of the company.

• Value added tax.

Step 10: Make capital contribution to the employment service company according to regulations

Members shall contribute capital to the employment service company within 90 days after receiving the business registration certificate. Assets contributed as capital can be Vietnam Dong, freely convertible foreign currency, gold, value of land use rights, value of intellectual property rights including technology, technical know-how, or intellectual property rights used to contribute capital including copyright, copyright-related rights, and industrial property rights.

This is the entire process to establish an employment service company. Companies need to understand the above regulations so that the company can be allowed to operate.