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Under Vietnamese Law, there is no automatic right to work or be employed in Vietnam if you are a foreign national. If a company in Vietnam wishes to recruit a foreign individual, or a foreign individual is seeking to work in Vietnam, there are certain processes that must be followed, and this article outlines what you need to know and do.

Before looking at the details, it is important to look at some foundations that sit behind foreign employment issues in Vietnam.

- Visas (Business Visas, Visa Exemptions, Resident Cards, etc) do not provide any rights for employment in Vietnam. Visas are immigration/border matters.

In accordance with the Vietnam’s Labour Code (and the current applicable Decrees relating to the Labour Code), all foreign individuals require a Work Permit before undertaking any employment in Vietnam, unless they satisfy the exemptions and have the appropriate Exemption Certificates.

These “foundations” make matters quite different compared to other countries, where Work Visas can sometimes cover immigration/border requirements and allow the individual to be employed. In Vietnam these items must be separately dealt with, which may be convoluted, but by understanding (and not fighting!) the system it is not overlying complicated. Further, Work Permits are applied for by employers for each position and are not transferrable between employers/roles – new Work Permits are required for each role.


The 8 Key Points That Vietnamese Employers and Foreign Employees in Vietnam Must Know Are:


Point 1 - All foreign individuals must have a work permit before they commence employment, unless they have an Exemption

Decree 11/2016/ND-CP, dated 3 February 2016 (“Decree 11”) requires that employers must apply for a Work Permit for their prospective foreign employees, and have the Work Permit issued, before a foreign employee commences employment in Vietnam. Work Permits are to be applied for by the employer, and processed and issued by the Provincial offices of the Department of Labour, Invalids and Social Affairs (“DoLISA”). There are, however, 19 Exemption Categories within Decree 11 (and the Labour Code). All but two of these exemptions require the holders to have Exemption Certificates issued by DoLISA before commencing employment in order to take advantage of the Exemption Categories.


Point 2 – The “Exemption From Work Permit” Categories: What Are They?

There are 19 Exemption Categories in total, which can be placed into 2 groupings, where Work Permits are not required. However, there are still rules that must be followed.

Group 1 - Those exemptions which require an Exemption Certificate issued by DoLISA before commencing employment. There are 17 exemptions that fit this category. Many relate to NGO’s and government roles, but the common ones that relate to commercial operations include:

a) Foreign owners of Vietnamese enterprises (ie, foreign individuals with names recorded on the Business License as an owner);

b) Members of the Board of Management of a Joint Stock Company;

c) Internal transfer from an international employer to their subsidiary in Vietnam, where the individual has been employed for greater than 12 months by the international employer;

d) Interns coming to Vietnam that are studying abroad at foreign education institutions; and

e) Foreign lawyers registered with the Ministry of Justice;

Group 2 – Those which do not require an Exemption Certificate before signing an agreement and working for an employer.

a) Professionals who come to work in Vietnam for less than 30 days at a time and no more than 90 cumulative days in any 12-month period (the “30/90 Rule”); and

b) Coming to Vietnam for a period of less than 3 months to offer services (the “3-Month Rule”);


Point 3 – Exemption Certificates; What Are They?

Exemption Certificates are very much akin to a Work Permit, and require that documents are lodged with DoLISA. Although usually much simpler requirements than for a Work Permit, the Employer is still required to prepare and lodge certain documents regarding their company, draft labour agreements, and documents relating to the foreign employee that justify the Exemption Certificate being issued. Only once the Exemption Certificate has been issued can the employer sign the employment agreement with the foreign employee.


Point 4 – What are the Different Application Categories of Work Permit Applications

Although there is only one Work Permit (valid for up to 2 years), there are 3 key Application Categories that have different requirements:

Standard Application

This is the process that most applicants use. Standard requirements are that the employee possess a University Degree relevant to the role being applied for, and that they have written evidence of at least 3 year’s managerial experience. Note that the requirements need to show senior experience – seeking Work Permits for possible junior foreign employees are not practical as a general rule. Also, it is important that if the experience was in Vietnam, the only acceptable proof is a previous Work Permit or Exemption Certificate.

Management Application

This application is meant to be for Heads of Departments or Companies – however at present DoLISA appears to treat this as a process to be the General Director (ie, the head of the Company) only. The process does not require the applicant to hold a University Degree, but instead they must provide written evidence of 5 years senior experience relevant to the role (3 if they have a University Degree), and if that experience relates to prior work in Vietnam then they must have Work Permits or Exemption Certificates for that period.

Technical Expert Application

This category is the most flexible, and allows those with no University Degree to apply for a role. They need to be able have 5 years written experience relevant to the role and their area of technical expertise, and to hold certificates showing technical training or courses that total at least 12 months in length.


Point 5 – The Employer Applies for the Work Permit, and The Work Permit is Tied to That Role Applied For

This often frustrates foreign employees if they wish to change employers in Vietnam – they have to apply for a new Work Permit all over again for the new role. If they have two jobs and employers in Vietnam, they will need to hold two Work Permits; one from each employer. The reason is that the employer applies for the Work Permit, not the individual. The application is for a specific role at a specific employer. If an employee even changes roles with the same employer, then a new work permit is often required to be applied for (most don’t!).


Point 6 – Working in Vietnam Without a Work Permit Makes It Harder to Get a Work Permit in the Future

The reality is that some foreign individuals work in Vietnam without Work Permits, receiving cash from their employers and trying to stay outside the system. However, this does cause problems later on – as when applying for a Work Permit individuals must prove 3 (or up to 5) years valid pervious work experience, and you cannot include the Vietnamese experience without a Work Permit (or Exemption Certificate) copy for the Vietnamese roles.

Further, the application process requires work history to be detailed, so further caution needs to be taken so that the applicant does not clearly show they have working in Vietnam without a Work Permit or Exemption.

In addition, there are reports of cases where:

- Foreign individuals are deported and banned from returning to Vietnam for a specified period for working illegally in Vietnam, and

- Employers prohibited from employing any further foreign individuals for a specified period (along with penalties) for employing foreign individuals illegally.


Point 7 – Taxation is linked to Tax Residency, not your Work Permit/Exemption Status

Despite what some are led to believe, Personal Income Tax in Vietnam is linked to an individual’s “Tax Residency”, which is independent to their Work Permit or Exemption status. Therefore, the tax rates that apply to an employment relationship are dependent on the individual’s living situation (which generally will be the determinants of “Tax Residency" in Vietnam), and not the Work Permit or Exemption itself.


Point 8 – Probation contracts still require work permits

This point is extremely frustrating to employers in Vietnam. Employers have to go through the entire process of obtaining a Work Permit, before they can test a foreign employee’s ability to perform the job (ie, the inclusion of the standard probation clauses in an employment contract).

Some employers work around this by inviting the individual to come to Vietnam for a 90-day contract (using the “3-Month Rule” exemption). If they successfully complete the period, they will begin discussions for longer contract negotiations (and apply for Work Permits). There are risks with this process, but some argue that they can work around the requirements and essentially use the laws to allow a probation element. Whether these are acceptable to a potential employee is another story.




Matthew Lourey is Managing Partner at Domicile Corporate Services (www.domicilecs.com). Matthew is based in Ho Chi Minh City and assists foreign companies enter Vietnam, ensure ongoing compliance with Vietnamese requirements, and undertake their international reporting and similar obligations.

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