Singapore Launches Tech@SG Program

ASEAN briefing is produced by Dezan Shira & Associates

• In January 2020, Singapore launched the Tech@SG program, which helps local tech companies recruit highly-skilled foreign talents.
• Companies that qualify are eligible to receive up to 10 new Employment Passes (EPs), valid for two years.
• Companies must pass the eligibility criteria, such as digital or technology-based products or services as part of their core business.
• Foreign workers must also pass the eligibility criteria, which includes having a salary of SG3,600 (US$2,590).

In January 2020, Singapore’s government launched the Tech@SG program, which aims to help Singapore-based technology companies recruit highly-skilled foreign talent, and expand in the region.

Read the complete article here. 

China Briefing is produced by Dezan Shira & Associates

Questions for HR related to the coronavirus outbreak

Q1. If an employee is infected with the novel coronavirus pneumonia, does the company have the right to terminate the labor relationship with the employee?

According to Article 42 of the PRC Labor Contract Law, “Under any of the following circumstances, the employer shall not terminate a labor contract pursuant to the provisions of Article 40 and Article 41…during the stipulated medical treatment period of an employee suffering from illness or non-work-related injury.”

Article 40 clarifies three circumstances where the company is able to terminate the employee who does not commit a breach of internal rules and policies. Article 41 stipulates details concerning economic redundancy. Therefore, if your employee is infected with the novel coronavirus pneumonia and he/she is either at home or in hospital, by law they are classed as being under medical treatment, and the company is unable to terminate the labor relationship with this employee.

Read the complete article here. 

A briefing by Dezan Shira & Associates

This publication, designed to introduce the fundamentals of investing in Singapore, was compiled by the experts at Dezan Shira & Associates, a specialist foreign direct investment practice, providing corporate establishment, business intelligence, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.

Doing Business in Singapore 2020 covers the following:

• Corporate establishment;
• Tax and Accounting; and
• Human Resources and Payroll.

Read the complete briefing here. 

Newsletter India from Roedl & Partner

1.     Payment of Wages Act, 1936 now applies to all shops and commercial establishments in the state of Karnataka. This implies that employers must now meet all compliances prescribed under the Payment of Wages Act including timely payment of wages, fixing of wage-periods and so on. Non-compliances may result in penal consequences.

2.     The Bombay High Court has clarified that not every director of a company shall be held criminally liable for alleged violations resulting from non-compliances under the Bombay Shop and Establishments Act, 1948.

Read the complete update here. 

News Updates from CT Executive Search 

Make in India is the name of the programme launched by the Indian government, whose aim is to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build the best in class manufacturing infrastructure in the country.

This was also the theme of the roundtable that was hosted by Hunt Partners in November, 2019. Christian Tegethoff, Managing Director, CT Executive Search was one of the corporate leaders who led the discussion at the roundtable. Mr. Tegethoff shed more light on how German corporations ensure sustainability of talent. Employee-centric policies were among the strategies mentioned with regard to talent retention. Corporate leaders present at the roundtable also discussed opportunities and drawbacks related to talent recruitment, development, and retention in India. In the end, everyone agreed that India offers a wealth of opportunities to both foreign and local companies looking to do business there.

Read the complete update from Hunt Partners here.

An article by bnt attorneys in CEE

As of 2020 more inspections and tougher penalties are expected.

An announcement by the Ministry of Finance in November revealed that from 2020 Hungarian companies can expect intensified tax inspection.

Increased control will affect companies which employ staff under self-employed status instead of an employment relationship, harming both the employee (less pension) and the central budget (unpaid tax and contributions). These false contracts of employment will be sanctioned with a mandatory fine as detailed below.

At the same time, changes are also expected in labour inspections. According to the draft act on the website of the parliament, the labour authority’s powers are to be extended. This means that inspectors would be allowed to watch and copy video tapes found in the workplace and data about people entering and leaving.

Read the complete article here. 

Vietnam Briefing is produced by Dezan Shira & Associates

One of Vietnam’s advantages making it a preferred destination for investors is its competitive minimum wages as compared to other countries in the region.

This is despite Vietnam increasing its minimum wage rates every year. This year Vietnam increased its minimum wage by an average of 5.7 percent. The new rates came into effect in January and range from US$132 to US$190 depending on the region.

Read the complete article here. 

Interview with Suresh Raina, Partner, Hunt Partners

Which specifics define the Indian market? What are the implications for managing businesses in India?

To succeed in India one has to have a long-term view, in face of multiple local challenges such as regulatory bottlenecks, fluctuating demand, and many times even degrowth as we are witnessing presently. Companies often fall victim to short rotation cycles that inhibit the execution of long-term strategy.

India being a large country, geographically dispersed, diverse teams make it difficult to standardise processes and hence supervision and control are harder to achieve. An important point to note as a call for localizing the processes to suit India is that companies who have built India-specific strategies have responded to business opportunities in India more quickly and successfully in comparison with their global counterparts.

Read the complete interview here.

Article by Christian Tegethoff, Managing Director CT Executive Search

With its population of more than 1.3 billion, India is an important export market for many European companies in the investment and consumer goods sectors. At the same time, the country is developing into a production hub where international companies produce both for the domestic and global markets.

In view of the slowdown in economic growth of 5% (first half of 2019), which is still remarkable compared to the rest of the world, India offers opportunities in a wide variety of areas.

Read the complete article here. 

Article by bnt attorneys in CEE

Invalid agreements of GmbH managing directors are treated according to the principles of defective employment relationships.

When concluding a managing director contract, it may happen that the contract is not effectively concluded. The most common reason for this is probably the representation of the company by a person not entitled to do so. But also violations of a legal prohibition, the immoral nature of the agreement or a challenge, e.g. due to fraudulent deception by the managing director, can lead to the nullity or retroactive cancellation of the employment contract.

Read the complete article here.

Interview with Norman Dentel, CEO, Würth Industrial Services India

How important do you think India is for the global market and particularly for European companies?

India is one of the largest growth markets, and maybe even the largest growth market worldwide. I believe that relationships with international partners will continue to grow in importance for European companies. I even dare to say that European companies without activities in China or India will eventually become obsolete.

Globalization requires growth from every company. If companies do not grow and the margins fail to materialize, shrinkage will set in. Eventually, such companies disappear from the scene. From an economic perspective, this can lead to a conflagration. Unemployment leads to a decline in purchasing power - as a result, more and more companies have problems selling their products.

Read the complete interview here. 

Interview with Rahul Oza, Partner and Branch Manager, Rödl & Partner

India is considered a bureaucratic country with a complicated legal framework. What should companies that want to enter the Indian market consider from a legal perspective?

The market entry requires some preliminary considerations regarding the legal structure. The liaison office, the project office, the branch office, an LLP or a private limited company are usually suitable for foreign companies. All market entry options have different legal and tax implications, which should be carefully examined to avoid negative consequences and liability, for example within the framework of India’s strict permanent establishment policy.

The incorporation of foreign companies in India is generally a formal procedure, which requires a lot of documentation. This is in particular due to the fact that Germany opposed India’s accession to the 1961 Hague Apostille Convention and India was not recognized as a signatory state.

Read the complete interview here. 

An article by Expatriant

It is 2020, and that means many people have made resolutions to change their careers and there is no better time to think about looking internationally for your next job. Working abroad is one of the best career moves for any profession, but some professions are better suited for working internationally. Many people think that finding a job abroad is difficult, or that without knowing the local language you stand little chance of finding a job. It is 2020, and the world is more international than ever before. There are opportunities everywhere, it simply depends on how hard you are willing to look. That being said, careers in education, hospitality,  tourism, nursing, non-profit, business, finance, marketing, and software development are especially well suited to an international career move. Here is an in-depth look at the top expat careers in 2020. 

Read the complete article here. 

ASEAN briefing is produced by Dezan Shira & Associates

• Myanmar has extended visa on arrival access to Austria, Hungary, New Zealand, Czech Republic, and Luxemburg.
• Visitors unable to obtain a visa on arrival can acquire an eVisa, which can be approved within three working days.
• Despite the recent visa extensions, Myanmar is still prioritizing Chinese tourists as it increases its diplomatic ties with China.

As of January 1, 2020, the Ministry of Labor, Immigration and Population have extended the visa-on-arrival (VoA) access to five new countries.

This program will run for a three-year trial period and is part of the government’s Tourism Master Plan, which aims to maximize the tourism industry’s contribution to the national economy.

The new countries included in the list are Austria, Hungary, New Zealand, Czech Republic, and Luxemburg. Myanmar has already extended VoA access to nationals of Australia, Germany, Italy, Russia, Spain, and Switzerland, in October 2019, for a one-year trial period.

Read the complete article here. 

India Briefing is produced by Dezan Shira & Associates

• India’s tier-2 cities are developing rapidly and are home to several industrial clusters and startup hubs, particularly in the IT, manufacturing, and export sectors.
• Termed as the “reversal of talent movement”, many urban professionals in India are relocating to tier-2 cities to seek better career opportunities, benefit from lower living costs, and now – access cleaner air.
• Several multinational companies, including HCL, Infosys, Wipro, and Ericsson have expanded their operations in tier-2 cities due to the availability of talent, infrastructure, cheaper real estate, and low cost of setting up.

Tier-2 cities have emerged as a strong base for industrial clusters and startup incubators in India, leading to the emergence of new IT and manufacturing hubs.

Many multinational companies (MNCs) have expanded their operations to these cities due to the increasing availability of talent, low cost of setting up, competitive wage rates, affordable real estate, and lower operational costs.

Further, it is important to note that Indian cities are classified into tiers – tier-1, 2, and 3 – based on their population size, and this may not necessarily indicate their level of economic development.

Read the complete article here. 

An article by Expatriant

According to Owl Lab’s 2019 state of remote work, IT has the highest percentage of remote workers relative to its share of the total workforce. It makes perfect sense that this is the case. Because it is through the power of the internet, and the innovative products developed by the IT industry that enable remote work.

But, if you look at the other industries with the largest relative proportion of remote workers from the study, they are as follows: Customer support (service or success), sales and marketing.

Now you may be thinking, what makes a job a good candidate for moving remote?  Let’s take a look. Flexjob’s post titled “5 Criteria for Turning Office Jobs into Remote Jobs” states that for a job to be a good candidate for going remote it should ensure that the team does not need to be together physically, the technology for enabling them to go remote exists, or the absence of a particular team does not impact other departments.  Having only the required employees in the office saves $11,000 per employee on average.

Read the complete article here. 

ASEAN briefing is produced by Dezan Shira & Associates

• Malaysia adopts a territorial principle of taxation, meaning only incomes which are earned in Malaysia are taxable.
• Expatriates working in Malaysia for more than 60 days but less than 182 days are considered non-tax residents and are subject to a tax rate of 30 percent.
• Foreign workers should seek help from registered local tax advisors to better understand their tax liabilities.

Malaysia uses both progressive and flat rates for personal income tax (PIT), depending on an individual’s duration and type of work in the country. As expatriates may fall into either tax category, it is important to understand Malaysia’s basic tax structure.

The Income Tax Act of 1967 structures personal income taxation in Malaysia, while the government’s annual budget can change the rates and variables for an individual’s taxation.

Read the complete article here.

Vietnam Briefing is produced by Dezan Shira & Associates

• In 2019, the Total Workforce Index (TWI) ranked Vietnam’s labor force 57th out of 76 for regulation, skills availability, cost efficiency, and productivity.
• The report highlighted three deficiencies: low English proficiency, low minimum wages and widening gender pay gap.
• While improvements have been made, more will need to be done as Vietnam becomes more integrated into the global economy.

In the latest 2019 Total Workforce Index (TWI) report by ManpowerGroup, Vietnam ranked 57th out of 76, a slip from its 43rd ranking in 2018. The index evaluates 100 factors in four key categories including regulation, skills availability, cost efficiency, and productivity. The report highlights three major challenges in Vietnam’s labor force: low English proficiency, low wages, and a widening gender pay gap.

Read the complete article here.

India Briefing is produced by Dezan Shira & Associates

India has seen some significant changes in its human resources (HR) industry over the last five years.

New priorities have included creating a diverse workforce, establishing gender parity and pay equality, providing mentorship, and assuring safety at the workplace.

Moreover, companies and start-up enterprises alike now view hiring in more holistic terms while job seekers choose their employers based on a wider criterion than salary growth, particularly in the initial stages of their career.

Also, as India enters 2020 amid an ongoing economic slowdown, HR departments across its corporate landscape will be expected to ensure the most efficient utilization of resources through increasing reliance on technology for recruitment, onboarding, and performance management.

Read the complete article here. 

China Briefing is produced by Dezan Shira & Associates

Minimum wages in China continue to grow.

Last year, seven regions in China increased their minimum wage.

The first six months of 2019 saw Chongqing, Shaanxi, Shanghai, and Beijing raise their minimum monthly and hourly wage. This was then followed by a minimum wage boost in Hebei, Fujian, and Qinghai in the latter half of 2019.

In 2018, 15 out of the 31 regions in mainland China increased their minimum wages, while 20 provinces did so in 2017.

Local governments in China are required to update their minimum wages at least every few years but have the flexibility to adjust wages according to local conditions.

Read the complete article here. 

Vietnam Briefing is produced by Dezan Shira & Associates

Labor code 2021

This year, the Labor Code has two major changes in retirement age and overtime hours limit.

The retirement age for men has been increased from 60 to 62, and from 50 to 55 for women. The increase is inevitable to avoid labor shortages in the next decade and to address an unbalanced social insurance fund. Companies can introduce a more flexible retirement scheme whereby senior workers can choose to be freelancers, independent contractors or part-time workers.

The new code also limits overtime to 40 hours a month (300 hours a year). The cap is higher than that of other Asian countries, such as China’s 36 hours a month.

Read the complete article here.

Interview with Christian Tegethoff, Managing Partner, CT Executive Search, published on Expatriant

What are the differences between executive search firms, recruiters, and head hunters in Russia?

In recruitment, there are two different business models: the “contingent” model and the “retained” model. 

“Contingent” means that the searching company only pays the agency a fee in case it hires a candidate proposed by the agency. 

“Retained” means that the fee agreed at the start of the search is paid in installments, which are charged when project milestones are reached. Three installments are usual, with one being invoiced at the start of the assignment, the second upon presentation of the candidate shortlist and the third one upon placement of a candidate. 

The retainer fee model ensures that the executive search firm receives a major part of their fee regardless of whether a placement actually happens. This allows the search firm to conduct a deeper market analysis, more in-depth candidate evaluation and generally a higher level of service. 

The retainer model is mainly applied for senior management searches, other positions are usually filled according to the contingent model.

Read the complete interview here.

ASEAN briefing is produced by Dezan Shira & Associates

• Employers in the Philippines should understand the obligations around the 13th month pay and Christmas bonuses.
• The 13thmonth pay is exempt from tax, up to a limit of PHP 90,000 (US$1,778) and is mandatory, while the Christmas bonus is at the discretion of the employer. 

The 13th month pay and Christmas bonuses in the Philippines are an important aspect of HR policy that employers need to understand.

A key topic that often prompts questions is the distinction between the two systems and the tax rules surrounding them. Though both bonus payments are distinct, they can interact to create diverse tax outcomes. 

Read the complete article here. 

ASEAN briefing is produced by Dezan Shira & Associates

• The Indonesian government introduced Regulation 78 of 2019, offering a variety of income tax incentives for investments in specific industries and provinces.
• These incentives include tax deductions, the accelerated depreciation of fixed tangible assets, and the accelerated amortization of intangible assets, among others.
• The development bodes well for businesses as the tax allowance schemes have been expanded to 183 from 145 sectors.

Indonesia’s government on December 13, 2019, issued Government Regulation 78 of 2019 (GR 78, 2019), which sets out a variety of income tax incentives for businesses investing in specific industries and provinces in the country.

These incentives come in the form of tax deductions, the accelerated depreciation of fixed tangible assets, and the accelerated amortization of intangible assets. The regulation also increases the period for fiscal loss compensation, in addition to setting the income tax rate on dividends for foreign taxpayers at 10 percent.

Read the complete article here. 

Vietnam Briefing is produced by Dezan Shira & Associates

• Vietnam’s National Assembly approved a new Labor Code which will take effect in January 2021.
• The amended code offers greater protection for employees and is viewed as better aligned with international best practices.
• Businesses should review their labor practices and prepare themselves to be compliant when the labor code takes effect.

Vietnam has approved an amended Labor Code which will come into effect in January 2021. The amendment to the labor regulations are a step towards aligning with international labor standards particularly as Vietnam integrates into the world economy as noted by the International Labor Organization (ILO).

Most of the code remains the same however, changes have been introduced to probationary employment, mandatory work rules, notice requirements, and other provisions generally suited to employees.

Read the complete article here.