Labour and employment compliance are continuous process which has no ending and there is no reason to stop.
In order for the companies in Vietnam to improve the effectiveness of its compliance in labour and employment in Vietnam, it is always important to pay attention to the details and fix the pending matters one by one. Labour and employment lawyers in Vietnam would help the clients with a thorough reviewing process if required.
The employer is required to comply with current labor regulations on recruitment procedure, labor management and declaration as following:
– Recruitment procedure:
The employer may recruit employee by either way of announcement at its head office or mass media. Employment application form must comply with the standard form which is attached in application dossier submitted by candidate. The application dossier must be returned to the candidate (if required) within 03 months from the date of announcement of recruitment results.
– Labor management:
The employer is required to create employment log book where is recorded information on the employees and their employment. The employment log book must be reserved at head office and make it available if required by Department of Labour, Invalid and Social Affairs (DOLISA).
– Labor declaration
Employers must semi-annually report any changes in their labor utilization as prescribed form to the DOLISA before May 25 or November 25 of each year.
We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Law firm in Hanoi, Law firm in Ho Chi Minh City and Law firm in Da Nang.
Commercial arbitration is a method of settling disputes selected by the parties and conducted in accordance with law. Compared with other method of dispute resolution such as mediation, negotiation, court litigation, dispute resolution by commercial arbitration also has advantages and disadvantages.
In accordance with Vietnamese law and international law, the method of dispute resolution by commercial arbitration also stems from the agreement of the parties on a voluntary basis. However, the difference between these methods is that the settlement of disputes through arbitration will be governed by the Commercial Arbitration Law. The parties are allowed to agree on appropriate arbitration selection, either before or after the dispute arises.
The practice of applying commercial arbitration law in resolving disputes presents some advantages:
Firstly, this is a method of resolving disputes on the principle of confidentiality if the parties do not agree otherwise. This is an advantage that all claimants respect because it limits the disclosure of business secrets, and keeps the credibility of the parties.
Secondly, the decision of the arbitrator is final, binding on the parties and the right to appeal in this case is invalid. The trial at Commercial Arbitration takes place only at one trial level, which the trial at the Court is at two levels. Therefore, it creates a premise for the following advantages.
Thirdly, the settlement of disputes arising through commercial arbitration shows flexibility while shortening the proceedings thereby contributing to saving time and effort of the parties.
Fourthly, the settlement of disputes by arbitration is not territorially limited so the parties may agree to choose any arbitrator to resolve their disputes.
However, the competing parties also need to pay attention that the choice of arbitration method also reveals some disadvantages such as: The enforcement of arbitral awards depends heavily on the willingness of the parties to the dispute. If the party who is serving the judgment does not voluntarily follow the arbitral awards and does not request to cancel the arbitral award after the expiration of the time limit for enforcing the arbitral award, the judgment-executing party may send a written request to the civil judgment enforcement agency for judgment execution.
In addition, one of the disputing parties may submit a request to the Court to cancel the arbitration award when encountering one of these following conditions: (i) There is no arbitration agreement or the arbitration agreement is invalid; (ii) The arbitration council’s composition or procedures of arbitral proceedings does not comply with the parties’ agreement or regulations; (iii) The dispute falls beyond the arbitration council’s jurisdiction: when an arbitral award contains the details falling beyond the arbitration council’s jurisdiction, such details shall be cancelled; (iv) The evidence provided by the parties on which the arbitration council bases to issue the award is counterfeit: an arbitrator receives money, assets or other material benefits from one disputing party, thus affecting the objectivity and impartiality of the award; (v) The award contravenes the fundamental principles of Vietnamese law.
Finally, when the parties choose to resolve their disputes by arbitration method, the costs are relatively higher than in the proceeding of court litigation.
At ANT Lawyers, our trial lawyers with accreditation in national and international arbitration practice could help providing legal advice in disputed matters, and guide the clients throughout the process. The lawyers could also advise the clients on various matters from choice of arbitrator, choice of arbitration rules, ad-hoc or institutional arbitration, place of arbitration, enforcement of arbitral award.
Employees as well as the labor collective and employers should pay attention to selecting the most appropriate and optimal resolution solution when labor disputes occur. It is also suggested to consult with labour lawyers of law firm speacializing in employment matters for efficiency.
Vietnam has become an
attractive destination for foreigner investors due to the impressive
development of socio – economic in recent years. This is such a good
opportunity for Vietnamese enterprises to get cooperation in business with
foreign partners.
To take advantage of the opportunities to be the pioneer and
market share, many of them have demand in employees with good skills and
qualifications. To meet these requirements, more and more companies hire
foreign workers for specific positions which might lack of human resources
within Vietnam territory.
According to Labor Code 2019, the employer wishing to recruit the
foreign workers has to explain their labor demand to the People’s Committee of
provinces and obtain written approval from this agency. Pursuant to this
written approval, the employer shall submit the application for the work permit
to the Department of Labor, War Invalids and Social Affairs of the province
where the planned working place of such foreign workers is located.
A foreign employee means a person who has a foreign nationality
and:
Is at last
18 years of age and has full legal capacity;
Has
qualifications, occupational skills, practical experience and adequate
health as prescribed by the Minister of Health;
Is not
serving a sentence; does not have an unspent conviction; is not undergoing
criminal prosecution under his/her home country’s law or Vietnam’s law;
Possessing a
work permit granted by a competent Vietnamese state agency, except the
cases specified in Labor Code.
Therefore, based on regulations of the Labor Code of Vietnam,
except for the foreign employees exempted from work permit i.e. investor of
company established in Vietnam, all of cases the foreign employees wishing to
work in Vietnam shall be subject to work permit application. A foreign employee
shall produce his/her work permit in
Vietnam when carrying out immigration procedures or upon
request of a competent state agency.
In case foreign employees who do not belong to work permit
exemption being found working in Vietnam without work permit, that person shall
be considered violation of the law of Vietnam. In addition, the employer that
uses the violated employee without work permit shall be punished accordingly.
According to Decree No. 28/2020/ND-CP dated March 1, 2020 on
administrative penalties for violations arising from labor, social insurance
and sending Vietnamese workers abroad under contracts.
i) Foreign
employee that working without work permits, except for the cases in which the
work permit is exempt shall be expelled.
ii) Employers who
employ foreign workers in Vietnam without work permits or written confirmations
of their exemption from work permit requirements, or employs foreign workers
holding expired work permits or written confirmations of exemption from work
permit requirements shall be implied:
+ A fine from VND
30,000,000 to VND 45,000,000 if the violation involves 01 – 10 workers;
+ A fine From VND
45,000,000 to VND 60,000,000 if the violation involves 11 – 20 workers;
+ A fine From VND
60,000,000 to VND 75,000,000 if the violation involves 21 or more workers.
On December 30, 2020, the Government issued Decree No. 152/2020/ND-CP regulating foreign workers working in Vietnam and recruiting and managing Vietnamese employees to work for the foreign employers in Vietnam.
In which, foreign workers in Vietnam are not required to be granted work permits include:
The employee is the owner or capital contributor of a limited liability company with a capital contribution of at least 3 billion VND; Chairman of the Board of Directors or a member of the Board of Directors of a joint stock company with a capital contribution of at least 3 billion VND;
Intra-corporate transferees within 11 service sectors in Vietnam’s service commitment schedule with the World Trade Organization, including: business services, communication services, construction services, distribution services, educational services, environmental services, financial services, health services, tourism services, recreational and cultural services, and transport services;
The person responsible for establishing a commercial presence;
The employee enters Vietnam to work as manager, executive, expert or technical worker for a working time of less than 30 days and not more than 3 times a year;
The employee who enters Vietnam for a period of less than 03 months to offer services;
The employee enters Vietnam for a period of less than 03 months to handle complicated incidents, technical or technological situations that affect or risk affecting production and business that Vietnamese experts and the foreign experts currently in Vietnam cannot handle it;
Foreign lawyer who has been granted a law practice license in Vietnam in accordance with the Law on Lawyers; The employee is licensed by the Ministry of Foreign Affairs to operate information and press in Vietnam in accordance with the law; The person certified by the Ministry of Education and Training to enter Vietnam for teaching and researching;
The employee enters Vietnam to provide professional and engineering consulting services or perform other tasks intended for research, formulation, appraisal, supervision, evaluation, management and execution of programs and projects using official development assistance (ODA) in accordance with regulations or agreement in international treaties on ODA signed between the competent authorities of Vietnam and foreign countries;
The employee is sent to Vietnam by competent foreign agency or organization to teach and research at international schools under the management of foreign diplomatic missions or the United Nations; establishment and organization established under the agreement which Vietnam has signed and acceded to;
The employee enters Vietnam to implement an international agreement to which a central or provincial authority is a signatory as per the law;
Person obtains an official passport to work for a regulatory agency, political organization, or socio-political organization;
Relatives of members of foreign representative missions in Vietnam;
In cases where the provisions of an international treaty to which the Socialist Republic of Vietnam is a signatory;
Head of representative office, project or is responsible for the activities of international organizations, foreign non-governmental organizations in Vietnam;
The employee is a volunteer;
The student studies at a foreign school or training institution which has a probation agreement with an agency, organization or enterprise in Vietnam; or a probationer or apprentice on a Vietnam sea-going ship;
The employee is a foreigner who marries a Vietnamese and lives in the territory of Vietnam.
On December 30th, 2020, Decree 152/2020/ND-CP has been issued regulating on foreigners working in Vietnam and recruiting, managing Vietnamese employees working for foreign organizations and individuals in Vietnam. Decree 152 clearly defines the forms and conditions for foreign employees to be eligible to work in Vietnam, and provides conditions for exemption from work permits in Vietnam, recruitment of foreign employees, renew and re-issue work permits.
According to current regulations, foreign citizens come to work in Vietnam for the purposes of performing employment contracts; performing intra-company transfer program; performing contracts or agreements on business, trade, finance, banking, insurance, science and technology, culture, sports, education, vocational training and health; providing services under contracts; offering services; working for foreign non-governmental organizations or international organizations in Vietnam that have been granted with operating licenses in accordance with the Vietnam law; working as volunteers; taking charge of establishing the commercial presence; working as managers, executives, experts, technical workers; performing packages or projects in Vietnam; or accompanying members of foreign representative bodies in Vietnam who are authorized to work in Vietnam under an international treaty to which the Socialist Republic of Vietnam is a signatory as their relatives.
For the conditions for foreign employees to work in Vietnam, Decree 152 has some notable new points, which according to Clause 3, Article 3 of this Decree, an expert who wish to work in Vietnam requires a foreign worker who obtains at least a bachelor’s degree or equivalent and at least 03 years’ experience in his/her training field in corresponding with the job position/job assignment that he/she will be appointed in Vietnam or obtains at least 5 years’ experience and a practicing certificate in corresponding with the job position that he/she will be appointed in Vietnam. There are opinions that this regulation makes it difficult for many foreign experts to come to Vietnam to work because in fact there are many experienced people who do not have appropriate qualifications and certificates.
Foreign experts, managers, executives or foreign technicians working in Vietnam for up to 30 days and no more than 3 times a year may be exempted from work permits. Cases eligible for exemption from work permits (or a certificate of exemption from work permits) must be notified to the Ministry of Labor, War Invalids and Social Affairs or the Department of Labor, War Invalids and Social Affairs of the provinces and centrally-run cities regarding personal information of the foreign worker and the expected start /end date, at least three days prior to the first scheduled working date in Vietnam.
At least 30 days from the expected date of employment of the foreign employee, the employer (except contractors) is responsible for determining the demand to use foreign workers for each job position that the Vietnamese employee has not yet met requirements of the position and report to the Ministry of Labor, War Invalids and Social Affairs or the People’s Committee of the province where the foreign worker is expected to work. During the implementation process, if there is a change in the demand for foreign employees, the employer must also report at least 30 days in advance.
With the policy of opening the economy in Vietnam, not only Vietnam attracts investors to set up company, but also the demand for foreign workers in enterprises grows and diversifies. However, in order for Vietnam companies to be able to use foreign workers, they must sign a labor contract.
After meeting the conditions specified in the Labor Code on meeting the requirements for recruitment and working in Vietnam, the foreign worker working in Vietnam shall sign a labor contract before the expected date intend to work for the employer. In this contract, the employer and the foreign worker will agree on all issues arising in the process of working as well as using labor together.
Firstly, on the working position in the labor contract, it must show the correct position and position for which the employer has determined the needs with the competent authority and in accordance with the working position shown in the document and the work permits which have been granted to foreign workers.
Regarding the working time, it will normally be agreed upon by the two parties but must not exceed the number of working days (hours) as prescribed by Vietnamese law. The number of overtime hours must be based on voluntary work and must ensure rest time, rest during working time and weekends for foreign workers.
According to the provisions of the Labor Code, in addition to Vietnamese public holidays and New Year’s holidays, foreign workers are allowed to take one more day off for the national traditional New Year and one national day of the country. This is a humane regulation, respecting the national culture of Vietnam. Therefore, the employer needs to learn about the National Day and the traditional Tet holiday of foreign workers so that the employees can take leave in accordance with the provisions of the law.
Regarding the term of the labor contract, the term of the labor contract for foreigners is also governed by the duration of the work permit issued by the competent Vietnamese authority. Accordingly, the term of the labor contract for foreign workers working in Vietnam must not exceed the term of the work permit. Therefore, the employer should pay attention to conclude the contract term in accordance with regulations.
In addition, employers and foreign workers should be aware of the terms of disputes which could potentially arise. Because, contract terms are an important legal basis to resolve when a labor dispute arises, agreeing in advance on how to resolve a dispute when a dispute arises will create a clear legal foundation for easy settlement by both parties. Dispute lawyers are suggested to be consulted at an early stage to avoid dispute escalation.
At most, it is important that the employers and foreign workers need to pay attention and strictly comply with the provisions of the law so that the process of entering into and performing the contract is conducted smoothly and in compliance with the law in Vietnam.
The Covid-19 epidemic has seriously affected the development of the economy and society. The situation of businesses being spacing as well as suspension of production and service provision happens regularly in epidemic-affected localities, and that also seriously affects the life stability of employees. Because most enterprises’ financial situations get worse, so the businesses seem like they cannot guarantee income for employees. This is a force majeure and legal event, and the labor law has specific provisions to balance and ensure the interests of employees but also make the best support to enterprises.
Specifically, according to the provisions of Clause 3, Article 99 of the Labor Code 2019, specific instructions are provided in Official Dispatch No. 264/QHLĐTL-TL of Ministry of Labor – Invalids and Social affairs about paying salary (known as “ stoppage salary”) for employees during the shutdown period related to the Covid-19 epidemic on July 15, 2021; direct instructions for businesses and employees during the epidemic period, in case of having to suspend work due to an incident that is not the fault of the employer such as a dangerous disease, the employee and the employer agree on the salary according to the following regulations.
In case of having to suspend work for less than 14 working days, the agreed stoppage salary shall not be lower than the minimum wage.
In case of having to suspend work for more than 14 working days, the stoppage salary shall be agreed upon by both parties but must ensure that that salary in the first 14 days is not lower than the minimum wage.
Accordingly, the labor relationship is a civil relationship as well as ensuring the agreement between the parties, however, it is also necessary to pay attention to ensuring the life quality of the employee, thus stipulating the case of having to suspend work from under 14 days that the parties have the right to agree on a salary which is ensured not lower than the minimum wage; besides, in case of suspension for more than 14 days, this is undesirable in the labor relationship as the damage for the employee is not allowed to work as well as does not guarantee income, and this also for the employer that they are not able to guarantee the output of goods and services provided to the partner, as well as the normal operation of the business, etc. Therefore, the law allows the parties to agree on the stoppage salary in this case.
The epidemic is a force majeure. In the case of having to suspend work for too long as it is unable to judge the progress of the epidemic, to ensure the financial ability of the employer as well as the health and safety of employees, the parties may agree to suspend performing labor contract. The content specified at point h, Clause 1, Article 30 of the Labor Code 2019, allows the parties to agree to suspend the labor contract, therefore we can realize this is also an appropriate regulation in the current epidemic period. Currently, when suspended in performing a labor contract, the employee is not entitled to salary and other rights and benefits as agreed in the labor contract. However, the employee and the employer may have another agreement on employee benefits.
According to Article 31 of the Labor Code 2019, within 15 days after ending the suspension period of the labor contract, the employee must be present at the workplace as well as the employer must accept the employee’s return to resume work under the signed labor contract in case of the valid labor contract, unless otherwise agreed by the parties. Accordingly, the employee and the employer must fully agree on the contents related to the suspension of the labor contract, to avoid issues and disputes arising after ending the suspension period of the performing labor contract.
In addition, Point c, Clause 1, Article 36 of the Labor Law 2019 stipulates that the employer has the right to unilaterally terminate a labor contract in case of natural disaster, fire, dangerous epidemic, enemy sabotage or migration, relocation, or downsizing of production and business under the request of the competent state agency, and the employer has sought all remedies but can’t help reducing personnel. Therefore, in the situation of dangerous epidemics, termination of the labor contract with termination grounds is considered a non – illegal act of unilaterally terminating the labor contract.
However, the grounds for termination because of the dangerous epidemic that the employer has tried all measures to overcome but can’t help reducing the personnel are only necessary conditions that the employer needs to comply with, besides, Employers need to comply with the procedure for unilateral termination of labor contracts in terms of the notice period, as well as done allowances to employees when unilaterally terminating labor contracts according to regulations in law.
With the policy of opening the economy in Vietnam, not only Vietnam attracts investors to set up company, but also the demand for foreign workers in enterprises grows and diversifies. However, in order for Vietnam companies to be able to use foreign workers, they must sign a labor contract.
After meeting the conditions specified in the Labor Code on meeting the requirements for recruitment and working in Vietnam, the foreign worker working in Vietnam shall sign a labor contract before the expected date intend to work for the employer. In this contract, the employer and the foreign worker will agree on all issues arising in the process of working as well as using labor together.
Firstly, on the working position in the labor contract, it must show the correct position and position for which the employer has determined the needs with the competent authority and in accordance with the working position shown in the document and the work permits which have been granted to foreign workers.
Regarding the working time, it will normally be agreed upon by the two parties but must not exceed the number of working days (hours) as prescribed by Vietnamese law. The number of overtime hours must be based on voluntary work and must ensure rest time, rest during working time and weekends for foreign workers.
According to the provisions of the Labor Code, in addition to Vietnamese public holidays and New Year’s holidays, foreign workers are allowed to take one more day off for the national traditional New Year and one national day of the country. This is a humane regulation, respecting the national culture of Vietnam. Therefore, the employer needs to learn about the National Day and the traditional Tet holiday of foreign workers so that the employees can take leave in accordance with the provisions of the law.
Regarding the term of the labor contract, the term of the labor contract for foreigners is also governed by the duration of the work permit issued by the competent Vietnamese authority. Accordingly, the term of the labor contract for foreign workers working in Vietnam must not exceed the term of the work permit. Therefore, the employer should pay attention to conclude the contract term in accordance with regulations.
In addition, employers and foreign workers should be aware of the terms of disputes which could potentially arise. Because, contract terms are an important legal basis to resolve when a labor dispute arises, agreeing in advance on how to resolve a dispute when a dispute arises will create a clear legal foundation for easy settlement by both parties. Dispute lawyers are suggested to be consulted at an early stage to avoid dispute escalation.
At most, it is important that the employers and foreign workers need to pay attention and strictly comply with the provisions of the law so that the process of entering into and performing the contract is conducted smoothly and in compliance with the law in Vietnam.
Vietnam law allows enterprises, agencies, organizations, individuals and contractors to recruit foreign workers for job positions that Vietnamese workers cannot meet the needs of business operation in Vietnam. However, the procedures to apply for permit allowing foreign workers to work in Vietnam is complicated which many times labour lawyers could be engaged to help provide more productive solutions to avoid delay or dispute that lead to the negative impact to the rights and benefits of employer or employee.
A foreign employee means a person who hold a foreign nationality and is at last 18 years of age and has full legal capacity; has qualifications, occupational skills, practical experience and adequate health as prescribed by the Minister of Health; is not serving a sentence; does not have an unspent conviction; is not undergoing criminal prosecution under his/her home country’s law or Vietnam’s law; has a work permit granted by a competent authority of Vietnam, except in the cases the foreign employees are not required to have the work permit.
Job positions in which enterprises are employed by foreign workers include managers, executives, experts and technical workers.
Manager means a person in charge of management of an enterprise or the head or deputy head of an agency or organization.
Executive means the head or a person who directly administers affiliated entities of an agency, organization or enterprise.
Expert means a foreign worker who obtains at least a bachelor’s degree or equivalent and at least 03 years’ experience in his/her training field in corresponding with the job position/job assignment that he/she will be appointed in Vietnam; obtains at least 5 years’ experience and a practicing certificate in corresponding with the job position that he/she will be appointed in Vietnam; or falls under a special case subject to decision of the Prime Minister according to a request of the Ministry of Labor, War Invalids and Social Affairs.
Technical worker means a foreign worker who has been trained in technical field or another major for at least 01 year and have worked for at least 03 years in his/her training field; or obtains at least 5 years’ experience in corresponding with the job position that he/she will be appointed in Vietnam.
Before applying for a work permit for a foreign worker, at least 30 days before the date on which foreign workers are expected to be employed, the employer (except contractor) shall request to determine the demand for foreign workers for every job position for which Vietnamese workers are underqualified and send a corresponding report to the People’s Committee of province where the foreign workers are expected to work.
The People’s Committee of province shall issue a document specifying accepted job positions and non-accepted job positions within 10 working days after receiving the foregoing report on demand for foreign workers or report on change thereof.
At least 15 working days before the day on which a foreign worker starts to work, the employee shall submit an application for work permit to the Department of Labor, War Invalids and Social Affairs of the province where he/she is expected to work.
Within 5 working days after receiving a duly completed application, the Department of Labor, War Invalids and Social Affairs of province where the foreign worker is expected to work shall issue a work permit to the foreign worker. The form of work permit shall be solely printed and issued by the Ministry of Labor, War Invalids and Social Affairs. If the application is rejected, a written explanation is required.
After the foreign worker is issued with a work permit, the employer and the foreign worker must sign a written employment contract as per Vietnam’s labor law before the date on which the foreign worker is expected to work. The employer shall send that employment contract to the competent authority that issue that work permit. The employment contract is the original or a certified true copy.
In a number of cases, there are situation which employer engages a foreign employee in a job but fails to perform sufficient work permit procedures in time. When a labour dispute arise, it takes time to prove the labour relationship between the parties and this would negatively impact the right and benefits of the employee. It is therefore important to ensure the labour compliance from both employer and employee side to avoid dispute.
For foreigners wishing
to come to Vietnam to work and reside temporarily, they need to either set-up a company
in Vietnam or work for others. The owner of the company does
not need a work permit but still need to apply for temporary residence card.
However, the
foreign employee will need the employer to sponsor the work permit in
Vietnam before applying for temporary residence card. A recent
draft law on entry, exit and residence of foreigner in Vietnam has been proposed
with some changes. The draft regulates many open provisions on entry-exit
procedure, temporary and permanent residence conditions for foreigner to reside
in Vietnam. ANT Lawyers always follows the new updates about administrative
procedures in Vietnam to provide our client with the best service.
The new draft law
details conditions for granting the temporary residence card for foreigners
working in Vietnam, rising term of this card from 3 year to 5 year. The
foreigners’ category expands to scientists and specialists residing in Vietnam
for the purpose of attracting international talents, the foreigners who don’t
have any type of document proving nationality, and have resided in Vietnam
before the year 2000. The foreigners holding temporary residence card must
change card per periodically 10 years at the issuing offices. The draft law
does not allow the foreigners to change the entry purpose, but allows them to
supplement the purpose of belonging persons in some specific cases such as in
term of diplomatic representative offices, consulate, international
representative office of United Nations and students at universities, colleges,
schools.
In order to manage the usage of
foreign workers in Vietnam, the Vietnam state authority has requested employers
to provide explanation for such need to use foreign workers.
Demand to use
foreign workers: The employer (except contractors) is responsible for
determining the demand to use foreign employees for each position that the
Vietnamese employee has not met the requirement and submit written explanation.
In case the employer is a contractor, in the bidding documents, it is required
to declare the number, qualifications, professional competence and experience
of foreign workers mobilized to implement bidding packages.
Recipient:
Chairman of People’s Committees of provinces and cities under central authority
(hereinafter referred to as the provincial People’s Committee) where the
employer is headquartered.
Periodic
notification period: Every year, the employer (except contractor) is
responsible for determining the demand to use foreign employees for
explanation.
The period of
notice for the first time: Before at least 30 days from the date the employer
(except contractor) plans to recruit foreign employees, the employer must
report explanations as provided in Paragraph 1 Article 4 of Decree No. 102/2013
/ ND-CP on the demand to use foreign workers, including work position, number,
qualifications, experience, salary, working hours and submit directly to the
Department of Labour – Invalids and Social Affairs of provinces and cities
under central authority (hereinafter referred to as the Department of Labor –
Invalids and Social Affairs) where the employer is headquartered.
The period of
notice the adjustment: The employer whom is approved to use foreign
employees, that have changes in the demand for foreign workers, has to directly
submit the report explaining the adjustment and supplementation at least 30
days before the expected day for new recruitment, additional recruitment or
recruitment to replace foreign workers with the Department of Labour –
Invalids and Social Affairs where the employer is headquartered.
On December 30th, 2020, Decree 152/2020/ND-CP has been issued regulating on foreigners working in Vietnam and recruiting, managing Vietnamese employees working for foreign organizations and individuals in Vietnam. Decree 152 clearly defines the forms and conditions for foreign employees to be eligible to work in Vietnam, and provides conditions for exemption from work permits in Vietnam, recruitment of foreign employees, renew and re-issue work permits.
According to current regulations, foreign citizens come to work in Vietnam for the purposes of performing employment contracts; performing intra-company transfer program; performing contracts or agreements on business, trade, finance, banking, insurance, science and technology, culture, sports, education, vocational training and health; providing services under contracts; offering services; working for foreign non-governmental organizations or international organizations in Vietnam that have been granted with operating licenses in accordance with the Vietnam law; working as volunteers; taking charge of establishing the commercial presence; working as managers, executives, experts, technical workers; performing packages or projects in Vietnam; or accompanying members of foreign representative bodies in Vietnam who are authorized to work in Vietnam under an international treaty to which the Socialist Republic of Vietnam is a signatory as their relatives.
For the conditions for foreign employees to work in Vietnam, Decree 152 has some notable new points, which according to Clause 3, Article 3 of this Decree, an expert who wish to work in Vietnam requires a foreign worker who obtains at least a bachelor’s degree or equivalent and at least 03 years’ experience in his/her training field in corresponding with the job position/job assignment that he/she will be appointed in Vietnam or obtains at least 5 years’ experience and a practicing certificate in corresponding with the job position that he/she will be appointed in Vietnam. There are opinions that this regulation makes it difficult for many foreign experts to come to Vietnam to work because in fact there are many experienced people who do not have appropriate qualifications and certificates.
Foreign experts, managers, executives or foreign technicians working in Vietnam for up to 30 days and no more than 3 times a year may be exempted from work permits. Cases eligible for exemption from work permits (or a certificate of exemption from work permits) must be notified to the Ministry of Labor, War Invalids and Social Affairs or the Department of Labor, War Invalids and Social Affairs of the provinces and centrally-run cities regarding personal information of the foreign worker and the expected start /end date, at least three days prior to the first scheduled working date in Vietnam.
At least 30 days from the expected date of employment of the foreign employee, the employer (except contractors) is responsible for determining the demand to use foreign workers for each job position that the Vietnamese employee has not yet met requirements of the position and report to the Ministry of Labor, War Invalids and Social Affairs or the People’s Committee of the province where the foreign worker is expected to work. During the implementation process, if there is a change in the demand for foreign employees, the employer must also report at least 30 days in advance.
Vietnam has become an attractive destination for foreigner investors due to the impressive development of socio – economic in recent years. This is such a good opportunity for Vietnamese enterprises to get cooperation in business with foreign partners.
To take advantage of the opportunities to be the pioneer and market share, many of them have demand in employees with good skills and qualifications. To meet these requirements, more and more companies hire foreign workers for specific positions which might lack of human resources within Vietnam territory.
According to Labor Code 2019, the employer wishing to recruit the foreign workers has to explain their labor demand to the People’s Committee of provinces and obtain written approval from this agency. Pursuant to this written approval, the employer shall submit the application for the work permit to the Department of Labor, War Invalids and Social Affairs of the province where the planned working place of such foreign workers is located.
A foreign employee means a person who has a foreign nationality and:
Is at last 18 years of age and has full legal capacity;
Has qualifications, occupational skills, practical experience and adequate health as prescribed by the Minister of Health;
Is not serving a sentence; does not have an unspent conviction; is not undergoing criminal prosecution under his/her home country’s law or Vietnam’s law;
Possessing a work permit granted by a competent Vietnamese state agency, except the cases specified in Labor Code.
Therefore, based on regulations of the Labor Code of Vietnam, except for the foreign employees exempted from work permit i.e. investor of company established in Vietnam, all of cases the foreign employees wishing to work in Vietnam shall be subject to work permit application. A foreign employee shall produce his/her work permit in Vietnam when carrying out immigration procedures or upon request of a competent state agency.
In case foreign employees who do not belong to work permit exemption being found working in Vietnam without work permit, that person shall be considered violation of the law of Vietnam. In addition, the employer that uses the violated employee without work permit shall be punished accordingly.
According to Decree No. 28/2020/ND-CP dated March 1, 2020 on administrative penalties for violations arising from labor, social insurance and sending Vietnamese workers abroad under contracts.
1. i) Foreign employee that working without work permits, except for the cases in which the work permit is exempt shall be expelled.
2. ii) Employers who employ foreign workers in Vietnam without work permits or written confirmations of their exemption from work permit requirements, or employs foreign workers holding expired work permits or written confirmations of exemption from work permit requirements shall be implied:
3. A fine from VND 30,000,000 to VND 45,000,000 if the violation involves 01 – 10 workers;
4. A fine From VND 45,000,000 to VND 60,000,000 if the violation involves 11 – 20 workers;
5. A fine From VND 60,000,000 to VND 75,000,000 if the violation involves 21 or more workers.
Our employment practice at ANT Lawyers helps clients with the following:
Regulatory issues: advising on regulatory issues in relation to recruitment, employment and termination of labour contracts.
Employment documents: drafting, negotiating and amending labour contracts, office rules and collective labour agreements.
Licensing requirements: advising on the obtaining of work permits for expatriates, registration of office rules and collective labour agreements.
Labour dispute: mediating and reconciling labour disputes, representing clients before Vietnamese courts for settlement of personal and collective labour disputes, representing employee in employment dispute matters in Vietnam for best interests protection.
Please contact us for inquiries through email ant@antlawyers.vn or call our partner directly at + 84 912 817 823.
Foreigners are encouraged to make investment in Vietnam through direct investment by Setting up company in Vietnam.
However there are restrictions in some cases in regard to investment capital, investment area, special licenses required. The investor is suggested to consult with a law firms in Vietnam for advice and service offering.
Before setting up business in Vietnam, ask yourself the following questions:
1. Which business should I invest in Vietnam?
There are non-conditional investment areas and conditional investment areas. Establishing company in the non-conditional investment areas are more simple than in conditional investment areas. Investment in IT services, manufacturing, management consulting, business promotion are a few samples of non-conditional investment areas. Example of conditional investment areas are real estate, trading, travel agencies, freight forwarding… which are more complicated with investment conditions. Investment conditions might also be changed over the time depending on the WTO commitments which Vietnam enters.
2. What should I name the business in Vietnam?
The company in Vietnam has to have Vietnamese name, and English name. The company could also have abbreviated name. The name of the company in Vietnam indicates the structure of the company, the business lines, and the name that differentiate against other businesses. For instance, the company could be named Alpha consulting limited liability company.
3. Where should I register the address of the business in Vietnam?
Not every address could be used to register a company. The address has to be an address of a house with leasing agreement or office building which owner has license to operate as office building.
4. What is the legal structure of the company?
Depending on the number of investor contributing capital, company could be set-up as one member limited liability company or two or more member limited liability company or joint stocks company.
5. How much capital is required to set-up a company in Vietnam?
The investment amount depends on the business plan and is subject to the approval of the provincial Department of Planning and Investment evaluating application dossier. In some business areas like real estate, banking and finance, minimum capital is required. In general for non-conditional investment area, the law does not specify the minimum capital to establish a company in Vietnam however the State agencies that evaluate investment plan could reject the investment project which are not feasible. Bank statement in foreign banks could be used to prove sufficient fund of investment capital.
6. Whom will be legal representative and work permit in Vietnam?
The investor will need to appoint the legal representative in Vietnam to oversee the business performance and take legal responsibility in Vietnam. If the legal representative is an expatriate, whom is a capital contributing member or owner of a limited liability company or a member of the Board of Management of a shareholding company which is registered to operate in Vietnam, he or she will be exempted from work permit in Vietnam. Otherwise, he or she will need to have a work permit to work in Vietnam legally. The work permit holder would then apply for temporary residence card to live in Vietnam as long as the work permit allows.
7. How long does it take to set-up a company in Vietnam?
It depends on what type, scale, and whether or not conditions are required. For a simple minimum capital without conditions to set-up, it would take 30 working days. For setting up company in conditional investment areas i.e. trading company in Vietnam, time would be lengthen due to the involvement of a number of State agencies approving the investment project and it would take 60 working days. For setting up company in other investments in areas requiring conditions to meet, time might be taken depending on the type of conditions and the government agencies evaluating the conditions of investment.
8. Whom will be granting the investment license in Vietnam?
For most of the investment projects, the provincial state agencies with the approval of the Department of Planning and Investment (DPI) will be granting the Investment Certificate in Vietnam. However, depending on the type, scale, and whether or not conditions are required, other Vietnam State agencies might be involved. For the case of trading company, ministry of trade and commerce, ministry of finance, provincial people’s committee will be reviewing the investment application dossier as well.
9. What are the tax liability in Vietnam?
Major taxes in Vietnam are corporate income tax, import and export tax, value added tax, and personal income tax in Vietnam. In some special areas, there are other taxes. The corporate income tax is currently at 22% and will reduce to 20% beginning 2016. Export is mostly encouraged as such the export tax is 0 however there are special cases when export tax is larger than 0. Import tax varies according to tariff. Value added tax is mostly at 10% however in some cases, VAT could be 5% or 0%. Personal Income tax varies according to income level and is applicable from VND 9,000,000 above.
10. What are mandatory reports submissions requirement in Vietnam?
Companies are required to keep accounting books, prepare and submit tax reports on monthly, quarterly and annually. Foreign companies are also required to have financial audit taken before the financial year end. The financial year in Vietnam is from January to December and the deadline to submit financial report is March 30th for the previous year. Other reports are required to be submitted at other State agencies.
Foreigners entering Vietnam
for different purposes will need proper
visas issued, failing which would lead to
the revocation, invalidation of
entry/exit/residence permits issued by Vietnamese
competent authorities. The length of stay in
Vietnam for foreigners depend on the visa type and the
time duration specified on the visa
itself. For some visas, especially
work related visas, the foreigners need
to be sponsored by Vietnam enterprises for working purpose.
The proper works visa must be obtained before work permit in
Vietnam would be issued and the foreigners could apply for
temporary residence card to stay in Vietnam for a longer period.
Below lists down all visa symbol for
references.
1.NG1
– Issued to members of delegations
invited by the Secretary General of
Vietnam’s Communist Party of, the President of Vietnam, the President of
the National Assembly, the Prime Minister.
2.NG2
– issued to members of delegations
invited by standing members of the
Secretariat of the Vietnam’s Communist Party, Deputy President of
Vietnam, Deputy President of the National Assembly, Deputy Prime
Minister, President of Vietnamese Fatherland
Front, Executive Judge of The Supreme Court,
Chief Procurator of the Supreme Procuracy, State Auditor General; members of
delegations at the same levels of Ministers,
Secretary Generals of Provincial Communist
Authorities, President of the People’s Committees of
provinces.
3.NG3
– Issued to members
of diplomatic missions, consular
offices, representative offices of
international organizations affiliated to the UN, representative offices of
intergovernmental organizations and their spouses, children under 18 years of
age, and housemaids during their term of office.
4.NG4-
Issued to people who come to work
with diplomatic missions, consular offices, representative
offices of international organizations affiliated
to the UN, representative offices of
intergovernmental organizations, visitors of members
of diplomatic missions, consular offices,
representative offices of international organizations
affiliated to the UN,
and representative offices of
intergovernmental organizations.
5.LV1
– Issued to people who come to
work with units affiliated to Vietnam’s
Communist Party; the National Assembly, the government,
Central Committee of Vietnamese Fatherland
Front, the People’s Supreme Court, the
People’s Supreme Procuracy, State Audit
Agency, Ministries, ministerial agencies, Governmental
agencies, the People’s Councils, the People’s Committees of provinces.
6.LV2
– Issued to people who come to
work with socio-political organizations, social
organizations, Vietnam Chamber of Commerce and Industry.
7.ĐT –
Issued to foreign investors in Vietnam and foreign lawyers practicing in
Vietnam.
8.DN –
Issued to people who come to work with companies in Vietnam.
9.NN1
– Issued to Managers of representative
offices or projects of international
organizations and foreign non-governmental organizations in Vietnam.
10.NN2 –
Issued to heads of representative offices, branches of foreign traders,
representative offices of other foreign economic, cultural, professional
organizations in Vietnam.
11.NN3
– Issued to people
who come to work
with foreign non-governmental organizations,
representative offices, branches of foreign
traders, representative offices of other
foreign economic, cultural, professional organizations in Vietnam.
12.DH –
Issued to people who come to study or serve internship.
13.HN –
Issued to people who come to attend conventions or conferences.
14.PV1 –
Issued to journalists who have permanent residences in Vietnam.
15.PV2 –
Issued to journalists who come to work for a short period of time in Vietnam.
16.LĐ –
Issued to people who come to work.
17.DL –
Issued to tourists.
18.TT
– Issued to foreigners that are parents,
spouse, children under 18 years of age
of the foreigners issued with LV1, LV2, ĐT,
NN1, NN2, UNIVERSITY, PV1, LĐ visas, or
foreigners that are parents, spouse, children of Vietnamese
citizens.
19.VR –
Issued to people who come to visit their relatives or for have other purposes.
20.SQ –
Issued to people at an overseas visa-issuing authority of Vietnam
It is important that the immigration
lawyers in Vietnam to be retained for advice in regard to
visa, work permit, temporary residence card or other immigration matters.
However there are restrictions in some cases in regard to investment capital, investment area, special licenses required. The investor is suggested to consult with a law firm in Vietnam for advice and service offering.
Before setting up business in Vietnam, ask yourself the following questions:
1. Which business should I invest in Vietnam?
There are non-conditional investment areas and conditional investment areas. Establishing company in the non-conditional investment areas are more simple than in conditional investment areas. Investment in IT services, manufacturing, management consulting, business promotion are a few samples of non-conditional investment areas. Example of conditional investment areas are real estate, trading, travel agencies, freight forwarding…which are more complicated with investment conditions. Investment conditions might also be changed over the time depending on the WTO commitments which Vietnam enters.
2. What should I name the business in Vietnam?
The company in Vietnam has to have Vietnamese name, and English name. The company could also have abbreviated name. The name of the company in Vietnam indicates the structure of the company, the business lines, and the name that differentiate against other businesses. For instance, the company could be named Alpha consulting limited liability company.
3. Where should I register the address of the business in Vietnam?
Not every address could be used to register a company. The address has to be an address of a house with leasing agreement or office building which owner has license to operate as office building.
5. How much capital is required to set-up a company in Vietnam?
The investment amount depends on the business plan and is subject to the approval of the provincial Department of Planning and Investment evaluating application dossier. In some business areas like real estate, banking and finance, minimum capital is required. In general for non-conditional investment area, the law does not specify the minimum capital to establish a company in Vietnam however the State agencies that evaluate investment plan could reject the investment project which are not feasible. Bank statement in foreign banks could be used to prove sufficient fund of investment capital.
6. Whom will be legal representative and work permit in Vietnam?
The investor will need to appoint the legal representative in Vietnam to oversee the business performance and take legal responsibility in Vietnam. If the legal representative is an expatriate, whom is a capital contributing member or owner of a limited liability company or a member of the Board of Management of a shareholding company which is registered to operate in Vietnam, he or she will be exempted from work permit in Vietnam. Otherwise, he or she will need to have a work permit to work in Vietnam legally. The work permit holder would then apply for temporary residence card to live in Vietnam as long as the work permit allows.
7. How long does it take to set-up a company in Vietnam?
It depends on what type, scale, and whether or not conditions are required. For a simple minimum capital without conditions to set-up, it would take 30 working days. For setting up company in conditional investment areas i.e. trading company in Vietnam, time would be lengthen due to the involvement of a number of State agencies approving the investment project and it would take 60 working days. For setting up company in other investments in areas requiring conditions to meet, time might be taken depending on the type of conditions and the government agencies evaluating the conditions of investment.
8. Whom will be granting the investment license in Vietnam?
For most of the investment projects, the provincial state agencies with the approval of the Department of Planning and Investment (DPI) will be granting the Investment Certificate in Vietnam. However, depending on the type, scale, and whether or not conditions are required, other Vietnam State agencies might be involved. For the case of trading company, ministry of trade and commerce, ministry of finance, provincial people’s committee will be reviewing the investment application dossier as well.
9. What are the tax liability in Vietnam?
Major taxes in Vietnam are corporate income tax, import and export tax, value added tax, and personal income tax in Vietnam. In some special areas, there are other taxes. The corporate income tax is currently at 22% and will reduce to 20% beginning 2016. Export is mostly encouraged as such the export tax is 0 however there are special cases when export tax is larger than 0. Import tax varies according to tariff. Value added tax is mostly at 10% however in some cases, VAT could be 5% or 0%. Personal Income tax varies according to income level and is applicable from VND 9,000,000 above.
10. What are mandatory reports submissions requirement in Vietnam?
Companies are required to keep accounting books, prepare and submit tax reports on monthly, quarterly and annually. Foreign companies are also required to have financial audit taken before the financial year end. The financial year in Vietnam is from January to December and the deadline to submit financial report is March 30th for the previous year. Other reports are required to be submitted at other State agencies.
Achievement of sustainable development in Vietnam The sustainable development objectives including economic, social development and environment protection have been integrated into national priority development together with economic growth objective.
Cosmetics lawyers in Vietnam
Let ANT Lawyers help your business in Vietnam. Tel: +84 28 73086529 * Email: ant@antlawyers.vn
Contacts Us
We are centrally located in Ho Chi Minh City, Hanoi and Da Nang.
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Before setting up business in Vietnam, ask yourself the following questions:
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