Social Affairs
Vietnam makes positive changes in work permit for foreign workers: PwC
From December 1, 2018, social insurance contribution is applicable to foreign workers instead of only Vietnamese individuals before.
The Vietnamese government has announced some certain changes in work permit for foreign workers, and many of them are positive developments, according to PricewaterhouseCoopers (PwC).
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Under Decree 140/2018/NDCP (Decree 140) dated October 8, 2018, significant changes have been made for simplification of work permit (WP) granting process for foreigners working in Vietnam.
First of all, time required for the issuance of WP is shortened to five working days from the submission date of the WP application, from 7 days before.
Secondly, cancellation of WP with the labor authority is no longer required.
Thirdly, notarization on copies of passport or passport equivalent document is no longer required.
Moreover, the scope of foreigners exempted from WP is now extended to the one who is responsible for establishing a commercial presence in Vietnam. A commercial presence of a foreign enterprise in Vietnam is under one of the following forms: (i) business cooperation contract; (ii) joint venture/100% foreign invested company; and (iii) representative office, branch of foreign enterprise.
Although exempted from WP, foreigner still needs to obtain WP exemption confirmation from the labor authority.
Approval on foreign recruitment plan was required to be submitted to the People’s Committee previously.
However, under Decree 140, approval on foreign recruitment plan is not required when recruiting Chief Representative of a representative office or head of a project office of an international organization or a non-governmental organization.
However, under Decree 140, approval on foreign recruitment plan is not required when recruiting Chief Representative of a representative office or head of a project office of an international organization or a non-governmental organization.
Changes in social insurance
Pursuant to Decree 143/2018/ND-CP (Decree 143) on compulsory social insurance (SI) contributions for foreigners working in Vietnam dated October 15, 2018 and will take effect from December 1, 2018, foreign individuals working under a work permit, practicing certificate, or practicing license and having a labor contract with an indefinite term or a definite term of one year or more with a company in Vietnam, are required to participate to mandatory SI scheme.
Before December 1, 2018, SI contribution is applicable to Vietnamese individuals only.
Internal transferred foreigners who continue to be employed under their overseas employment contracts and seconded to Vietnam are not subject to the obligatory SI scheme.
From December 1, 2018, foreign employees’ contribution rate totals 17.5%, including 3% to sickness and maternity funds, 0.5% to occupational diseases and accident funds, and 14% to retirement and death funds (effective for foreigners from January 1, 2022).
