Labor recruitment by a Foreign Investment Enterprise (FIE)
Under the 2012 Labor Code, a FIE may either directly recruit Vietnamese employees or recruit via an authorized labor agency. The FIE is then required to register the list of recruited Vietnamese employees with the local labor department and submit reports on the utilization of and changes to staff to the labor department on a periodic basis.
Registration of expatriate employees
Expatriates working in Vietnam for 03 months or more must obtain a work permit. The term of a work permit is required to correspond with the length of the labor contract, which is capped at 36 months but may be extended at the employer's request.
Not less than twenty days before an expatriate’s estimated date of commencement of work, an FIC must apply to MOLISA or its authorized agency to obtain a work permit for that expatriate. MOLISA or its authorized agency is obliged to give its decision within 15 days of its receipt of such application. Clear reasons must be provided if the application is refused. In addition, a work permit can be withdrawn in certain circumstances, including for a breach of the laws of Vietnam by the expatriate.
Five groups of foreigners working in Vietnam are exempt from the requirement of obtaining a work permit:
(i) foreigners entering Vietnam to work for less than 03 months,
(ii) a member of a limited liability company with two or more members,
(iii) the owner of a one-member limited liability company,
(iv) a member of the board of management of a shareholding company,
(v) a foreigner entering Vietnam to offer services,
(vi) foreigners entering Vietnam to work to resolve emergency situations such as a breakdown or a technically or technologically complex situation arising and affecting, or with the risk of affecting, production and/or business which Vietnamese experts or foreign experts currently in Vietnam are unable to deal with. Such foreigners must carry out procedures for issuance of a work permit if their work extends for more than 03 months; and
(vi) a foreign lawyer to whom the Ministry of Justice has issued a certificate to practice law in Vietnam. Not less than seven days prior to the date of commencement of work, foreigners who are exempted from work permit requirements must be registered at DOLISA where the employer’s head office is located. The registration must state the name, age, nationality and passport number of the employee, the dates of commencement and termination of employment, and a description of the work to be done.
The New Labor Code 2019 comes into effect on 1 January 2021 and entirely replace the current labor regime (‘Labor Code 2012’). In which, there are some notably changes applicable to expat employees as followings:
The maximum term of a work permit for a foreign employee is two (2) years and may only be extended once for an additional maximum term of two (2) years. That is to say, new application in full for a new work permit should be prepared every four (4) years for those working in Vietnam for a long way. Under the current law, the maximum duration of a work permit is also two (2) years and can be renewed on an unlimited basis.
Employers and foreign employees may enter into multiple definite-term labor contracts. This regulation is to guarantee that the term of the expat employee’s labor contract shall be consistent with that of his/her obtained work permit and should close a long-standing conflict in the law concerning the mandatory use of indefinite-term contracts after two consecutive definite-term contracts.
In addition, expats married to Vietnamese citizens and living in Vietnam shall be exempt from work permit obligations (noting that work permit exemption certificate is still required though). This is a major new additional ground for work permit exemption. It remains to be seen whether there will be any limits to the types or positions that such spouses may hold without work permits.