Category Archives: Vietnam – Labor Law

Compulsory Social Insurance for expats working in Vietnam – who’s in and who’s out?

Ever since the Law on Social Insurance[1] was issued in late 2014, employees and employers have been on notice that “expat employees working in Vietnam” will be required to participate in the State’s compulsory social insurance (SI) regime “from 2018”.  2018 came however with no further clarity around the details.

In October 2018, the Government issued Decree no. 143/2018/ND-CP[2] guiding the Law on SI and providing that “Employees who are expats working in Vietnam shall be required to participate in the SI program if they obtain work permits, practicing certificates, practicing licenses issued in Vietnam, indefinite-term employment contracts or employment contracts valid for at least one year with employers in Vietnam.” (Article 2.1). Also in the same decree, several exceptions from SI participation are listed, including intra-company transferees and expats reaching retirement age.

According to the statistics of the Ministry of Labor, War Invalids and Social Affairs (“MOLISA”), 64% of applicable expats working in Vietnam joined the SI scheme under Decree 143[3]. Having said that, there remains confusion amongst both employers and expats employees as to the subjects of application of the law.

Finally, on 18 March 2019, MOLISA issued Official Letter no. 1064/LDTBXH-BHXH[4] clarifying the issue of exactly which expats will be required and not required to participate into the Vietnam-law SI scheme.

Specifically, expat employees working in Vietnam must satisfy all of the following criteria in order to be applicable for the SI scheme:

SI ELIGIBILITY CONDITIONS FOR EXPATS

 

NOTES
Nationality Non-Vietnamese nationals working in Vietnam An overseas Vietnamese national entering Vietnam to work via his/her passport of a foreign country would be deemed as a non-Vietnamese national working in Vietnam.

 

Licenses Work permits, practicing certificates, practicing licenses issued by the competent authority in Vietnam

 

As a side note, a work permit issued for
an expat entering Vietnam to supply services to a Vietnam-based entity would not fall under this category. 
Employment Indefinite-term or at least one-year definite-term labor contract with a Vietnam-based employer. We are of the view that a definite-term labor contract (from 12 to 24 months) would suffice in this regard.

 

It is worth noting that term of expat’s labor contract must be in line with term of his/her valid work permit, which is maximum 24 months from a theoretical perspective.

 

Age Men: Under 60 years old

Women: Under 55 years old

Please kindly be advised that these retirement ages are being proposed to increase to 62 for male and 60 for female according to the draft of new labor code.

 

Others NOT falling under the scope of statutory intra-company transferees, i.e. any expat managers, chief executive officers, experts and technicians, who have been employed by the offshore enterprise for at least 12 months and are temporarily re-assigned/ seconded to its Vietnam-based commercial presence (e.g. subsidiary, representative office, or branch). Frankly speaking, an expat deemed an intra-company transferee with his/her work permit exemption certificate would be NOT eligible to attend the SI scheme.

For ease of reference, timeline and ratio for SI contributions applicable to both employer and expat employees under Decree 143 please see the table below.

In short, employers who hire expat employees would have to bear an extra liability to ‘part’ pay SI from 1 December 2018 and to ‘fully’ pay SI from 1 January 2022 while the relevant expat employees will NOT commence contributing to the scheme until 1 January 2022.

Sickness and Maternity Labor Accident and Occupation Disease Pension

and

Death Allowance

Total
Since

1 December 2018

Employer 3% 0.5% 0% 3.5%
Expat Employee 0% 0% 0% 0%
Since

1 January 2022

Employer 3% 0.5% 14% 17.5%
Expat Employee 0% 0% 8% 8%

Importantly, please also note that there is a statutory maximum cap for all SI contribution, as with caps applicable to Vietnamese employees, if the expat employee’s actual gross salary is higher than the maximum cap, the cap becomes the basis of the % calculation. Specifically, in light of SI, the basis for % calculation would be (i) the actual gross salary OR (ii) 20 times of ‘Base Salary[5], whichever is lower. Accordingly, such cap shall apply equally to both the employer % contribution and the employee % contribution.

 

[1] Law on Social Insurance no. 58/2014/QH13 dated 20 November 2014 (“Law on Social Insurance”)

[2] Decree no. 143/2018/ND-CP dated 15 October 2018, elaborating on Law on Social Insurance and Law on Occupational Safety and Hygiene regarding compulsory social insurance for employees who are foreign nationals working in Vietnam (“Decree 143”)

[3] http://thoibaotaichinhvietnam.vn/pages/tien-te-bao-hiem/2019-03-20/hon-64-lao-dong-nuoc-ngoai-da-tham-gia-bhxh-bat-buoc-69060.aspx

[4] Official Letter no. 1064/LDTBXH-BHXH issued by the MOLISA dated 18 March 2019

[5] ‘Base Salary’ is a measure set by the Vietnamese government from time to time. The current Base Salary applicable since 1 Jan 2019 is VND 1,390,000 / month, corresponding to a monthly cap of VND 27,800,000. However, it is worth noting that the Base Salary will change effective 1 July 2019 to VND 1,490,000, corresponding to a monthly cap of VND 29,800,000.

***

For more information about labor laws in Vietnam please contact Giles at Gtcooper@duanemorris.com or Nhan Le  at NTLe@duanemorris.com

Location, location, location – 5 areas to watch in Vietnam

With the second fastest growing economy in the world after China, Vietnam offers investors an almost overwhelming range of ways to get in on its continuing success story.

 

From energy to real estate, transport to tourism, a multitude of areas are experiencing growth and attracting domestic and foreign investment. The push to ease regulations is set to continue, and the government is working to ensure an evermore fertile business climate. But with so many options, where is a good place to start?

 

Here are five spots currently generating some real excitement:

 

  1. Soc Trang

 

The Mekong Delta province of Soc Trang recently held an investment promotion conference and, with the backing of the Prime Minister, managed to rally investment pledges totalling nearly US$5.4 billion. The 47 projects are mainly focused on clean power generation, high-tech agriculture and tourism services.

 

With work already underway to reform and streamline administrative procedures, a new injection of cash could inspire even more growth over the coming years.

 

During the conference, the PM set out an aggressive development strategy for the province, underlining his vision that the coming decade would see Soc Trang expand its economy to achieve middle-income status.

 

Specifically, the province was urged to set its sights on high-tech agriculture adapted to climate change, clean seafood production and processing targeting high-value markets and eco-tourism linked with ‘smart’ agricultural models. To achieve this kind of sustainable development, provincial authorities will need to invest in human resources and education. Co-operative models between farmers, investors, banks and distributors will help the development of value chains and quality standards for agricultural products.

 

  1. Ninh Thuan

 

For those with eyes on the renewable energy sector, the province of Ninh Thuan is looking like a hot prospect. Construction on the country’s biggest solar power plant, with a capacity of 168 MWp and total investment of roughly US$194 million, commenced in the southern province early in June.

 

The plant is a project by Singapore’s Sunseap Group – a large provider of clean energy solutions – and is slated to cover an area of 186 hectares. Once operational in June 2019, the plant is expected to supply over 200 million kWh of electricity to the national grid annually.

 

Sunseap is not the only player taking advantage of the province’s valuable location and abundance of sunlight, with four other plants kicking of construction this year in Ninh Thuan. With backing from provincial leaders, the province aims to become a renewable energy hub, with the generation of 2,000 MW of solar power by 2020.

 

So far, the province has 15 wind power and 27 solar power projects, with designed capacity of nearly 800 MW and 1,808 MW, respectively.

 

  1. Ho Chi Minh City

 

With properties priced at a fraction of those in neighbouring Singapore and Thailand, Vietnam is drawing a number of real estate investors and becoming a popular destination for foreign buyers.

 

Interest in Ho Chi Minh City, in particular, has been growing among foreign buyers with a number of projects already for sale and some approaching completion in the next one to two years. Given the political stability of the government, some investors see Vietnam as having the possibility to grow like China.

 

Home prices in Vietnam have been rising over recent years, making a modest increase last year on the back of 6.8 per cent economic growth and rapid increase in direct foreign investments.

 

  1. Coastal hot spots

 

The hotel and hospitality sector is experiencing a resurgence in Vietnam, with many properties reporting strong occupancy rates and a large number of new operators entering the market, especially in coastal areas such as Da Nang and Nha Trang.

 

These sites were already known as popular destinations for both domestic and foreign tourists, with the number of international guests visiting the country reaching over 13 million last year. In the first four months of 2018, more than 5.5 million international guests visited Vietnam, an increase of 29.5 percent over the same period last year. As interest continues to mount, so too do opportunities for investors in the hospitality sector.

 

Thanks to the strong development of tourism infrastructure and improvements in accommodation, cities like Da Nang and Nha Trang now offer a wide selection of hotels, luxury resorts and beach villas to suit a range of budgets and preferences.

 

Condotels are a growing trend in this sector, and several developers have adopted this model as a method of refinancing. Experts forecast that up to 18,000 condotel units will be added to the market in the next two years in key tourism destinations, accounting for 60% of the total new supply.

 

With major groups such as Vingroup, Sungroup, FLC, Muong Thanh and Empire, as well as well-known international brands snapping up segments of Vietnam’s hospitality market, this area will be one to watch in the coming years.

 

  1. Quang Binh

 

The central province of Quang Binh has drawn up a list of 48 projects to be completed in the 2018-2020 period, with total expected value of over US$2.2 billion.

 

The projects are expected to cover more than 8,000ha of land, with a focus on tourism, trade and services, industry, and agriculture, as well as education and health care.

 

Of the projects, 14 are in tourism, including coastal and ecological tourism and resort complexes. These are considered high-value projects that will spur local job creation, boost the budget and foster tourism development in the province.

 

For more information about investing in Vietnam, please contact Giles at GTCooper@duanemorris.com or any of the lawyers in our office listing. Giles is co-General Director of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.

Annual Vietnam Labour Law Reporting Obligations

See our handy chart in the link below outlining employers’ annual labour law reporting obligations in Vietnam.

Employment Reporting Obligations in Vietnam_June2017

For questions please contact Giles at GTCooper@duanemorris.com or any of the attorneys in our Vietnam office listings.

Mid Year Labor Law Update

The Labor Code in Vietnam is undergoing a rare revision with changes expected to be confirmed later this year and effective in 2018.  Click the link below for a snapshot of some anticipated changes as well as an update on trade union and social insurance matters.

Asia Employment Law Congress – Duane Morris – 9June2017

For questions about Vietnam labor law, please contact Giles at GTCooper@duanemorris.com or any of the attorneys in our office listings.

ベトナムのワークパーミット条件の緩和(予定)

政令第102/2013/ND-CP号の最新改正案は、ベトナムで外国人労働者の雇用条件を緩和しています。現時点ではまだドラフト段階ではありますが、最終版に近づいていることを望んでいます。

新政令で期待される10項目の改正点

1. 「専門家」の定義は改正されます。以下のいずれの外国人が対象となります。

(1) 外国で専門家として書面にて認められている者

(2) 技術者の資格を取得している者あるいは大学での学位以上を取得している者

(3) ベトナムで就労しようとする職務分野で最低5年以上の職務経歴がある者

2.  定期的の外国人雇用の年間雇用計画の提出義務が廃止され、採用の必要性が生じる際にのみ雇用者は労働局の承認を得れば結構です。

3.  労働許可証が免除される外国人は、新たに2項目追加されました。

(1) 30日未満の期限で働くためにベトナムへ入国する外国人

(2) ベトナム国外の学校や職業順連機関で就学中の生徒・学生がベトナムで就労する場合この(2)は海外からの研修生が対象になると思われます。

4.  サービスを提供するためにベトナムへ3か月未満の期間で入国する外国人、または、30日未満働く為にベトナムへ入国する外国人(上記の3、(2)を参考)は、労働許可証取得免除の承認手続きも不要となります。しかし、労働許可証免除期間は労働許可証と同じく最大2年間となっています。

5. 健康診断書は、発行日から12ヶ月以内のものであればベトナム国内外どちらの医療機関で発行された健康診断書でも申請可能です。

6.  現行法では、無犯罪証明書はベトナムで発行されたものと海外で発行されたもの両方が必要な場合がありましたが、今後はどちらか一つ提出すれば十分になる予定です。

7.  申請書類に関してですが、申請者が書類を提出する際に提出するコピーと比較できるよう原本の提示が可能であれば、合法化したコピーの代わりに公証されていないコピーでも書類の申請ができるようになる予定です。

8.  以下の外国人はベトナムで働く為の申請手続きが簡素化されます。

(1)  同じ役職(ポジション)で別雇用者のもとで働く者

(2)  別の役職(ポジション)で同雇用者のもとで働く者

9.  労働許可証の発給にかかる法定期間が10営業日から7営業日に減少されます。

10.  労働許可証の再発行(更新)の申請期間は、現行法上では労働許可証の有効期限切れの5~15日以内でしたが、今後5~45日以内で申請提出期間がより柔軟な条件となっています。

以上、日本語でのお問い合わせは japanese@duanemorris.comまでお寄せください。

〈ご注意〉こちらの記事は皆様に情報をお届けする目的でのみ作成・掲載しておりますので、法的なアドバイスとして提供・構成することを目的としておりません。詳細につきましては、当法律事務所の注意書きをご一読下さい。

Vietnam Work Permit Headaches Look Set to Ease

By Giles Cooper, Manfred Otto, and Nhan T. Le of Duane Morris Vietnam LLC

The latest draft decree amending Decree 102/2013/ND-CP eases conditions for employing foreign workers in Vietnam. It is still a draft, but we are hopeful that is it is close to final.

10 improvements to look forward to under the new decree:

  1. Revised definition of “foreign expert” to be a foreigner who:
    (i) is recognized in writing by a foreign country as an expert;
    (ii) has qualifications at level of engineer, bachelor’s degree or higher; or
    (iii) has at least 5-year experience working in the proposed position in Vietnam.
  2. Removes the obligation on annual demand plan for hiring foreign employees. The employer will only be required to obtain the labor authorities approval when the recruitment demand arises.
  3. Two new work permit exemptions for foreigners who:
    (i) come to Vietnam to work for less than 30 days; and
    (ii) are studying at schools or training institutions outside of Vietnam and who come to Vietnam to work. Point (ii) may cover foreign interns.
  4. Expats entering Vietnam to offer services for less than 3 months and those who come to Vietnam to work for less than 30 days (see point 3(i) above) will also be exempted from the procedure to confirm that they are work permit exempted. (However, the work permit exemption confirmation will only be valid up to 2 years, which is the same as the maximum term of a work permit).
  5. Health certificates will be accepted whether they are issued by a Vietnamese or offshore healthcare provider, provided that they are issued within 12 months before applying for the work permit.
  6. Criminal records issued either in Vietnam or in a foreign country will suffice (instead of requiring both Vietnamese and foreign records as under current law).
  7. Application documents: a non-certified copy will be acceptable instead of a legalized copy, so long as the applicant can present the original document for comparison when submitting it.
  8. Simplifies the application procedures for expats who would like to work:
    (i) for another employer in the same position; or
    (ii) for the same employer but in another position.
  9. Reduces the statutory time for issuing a work permit from 10 working days to 7 working days.
  10. Extended filing period for work permit re-issuance of 5 to 45 days before the current permit expires. (Only 5 to 15 days under current law.)

For more information please contact Giles T. Cooper or Manfred Otto.
日本語でのお問い合わせは japanese@duanemorris.com までお寄せください。

 Disclaimer: This post has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. Each case should be analyzed individually with the support of competent legal counsel. For more information, please see the firm’s full disclaimer.

New Regulation Provides More Favorable Conditions for Employment Agencies in Vietnam

By Tran Le Luu Phuong and Manfred Otto, Duane Morris Vietnam LLC

New regulations provide more favorable conditions for establishing and operating employment agencies in Vietnam, though fail to clarify conditions for foreign investors.

On 23 May 2014, the Government of Vietnam issued Decree No. 52/2014/ND-CP (“Decree 52”), which entered into force on 15 July 2014 to replace of Decree No. 19/2005/ND-CP as amended and supplemented by Decree No. 71/2008/ND-CP (collectively, “Decree 19”), introducing changes to the current regulations on employment service activities in Vietnam. Continue reading New Regulation Provides More Favorable Conditions for Employment Agencies in Vietnam

Vietnam Work Permit Update: Experience Requirements to be Optional for Experts, Technicians and Teachers

>Japanese

Foreign experts, technicians and teachers will only have to show that they meet professional qualifications to apply for work permits, instead of also having to prove many years of working experience.

The Vietnamese Government issued Resolution No. 47/NQ-CP on 8 July 2014 (“Resolution 47”) to improve conditions for doing business in Vietnam. Among other changes, Resolution 47 addresses foreigners working in Vietnam. Concerned government agencies will have to amend current labor regulations, before the changes become law. However, legislative action is expected by the end of
2014.[1]

Continue reading Vietnam Work Permit Update: Experience Requirements to be Optional for Experts, Technicians and Teachers

(速報)ベトナム・ワークパーミット、経験年数が任意に

>English

外国の専門家、技術者及び教師は今後、職業資格のみでベトナムの労働許可証(ワークパーミット)を申請することができ、数年間の実務経験の証明が任意となります。

The Vietnamese ベトナム政府は2014年7月8日にビジネス環境の改善のために決議(Resolution)第47/NQ-CP号を公布しました(「決議47号」)。決議47号の改善点の中、ベトナムで働く外国人についての記載もあります。変更点が有効になるためには、関係している政府機関は、現行の労働規制を改正しなければなりません。その法改正は2014年末までに行われると予想されます。[1]

Continue reading (速報)ベトナム・ワークパーミット、経験年数が任意に

Anti-China protests and the importance of internal labor regulations and trade unions

By Manfred Otto, Giles T. Cooper, Duane Morris Vietnam LLC 

> Japanese

Several factories in industrial parks have reportedly been set on fire and attacked in Binh Duong Province (Southern Vietnam). Affected factories include not only Chinese businesses, but also Taiwanese, Japanese, Korean and Singaporean businesses.

Continue reading Anti-China protests and the importance of internal labor regulations and trade unions