Insider Tips for Foreign Employees and Employers in Vietnam

This article summarises the process, requirements, restrictions, and application dossier when dealing with foreign employment in Vietnam.

If you need skills that are in short supply in Vietnam, or when you would like to gain new ideas and technologies, your business can reap the benefits of employing talents from overseas. When it comes to employment in Vietnam, a company would like to recruit foreign employees or partners, they need to follow certain official processes in order to comply with the Vietnamese laws. Most importantly, under the Law of Vietnam, foreigners without work permits are not allowed to work in Vietnam.

Read About InCorp’s Recruitment Services in Vietnam

In this article, we will outline what you need to know and do about employing a foreigner in Vietnam, including its restrictions, requirements, mandatory documents, process timeline, etc.

Advantages of Employing Foreigners in Vietnam

Employing foreigners can be an ideal solution when you cannot hire the right local person for a position that requires specific skills.

Of course, you can train the existing employees to acquire the skill set in order to meet the demands of your business – but, it often takes much longer and might not be cost-effective, as training can be expensive too.

Background of Foreign Employment in Vietnam

As an employer or a foreign employee, it is critical to understand the background of foreign employment in Vietnam before looking into the details.

First of all, unlike other countries, Vietnamese permits such as visa exemptions, business visas, resident cards, etc. will not provide foreigners with any automatic rights to work in Vietnam.

Instead, according to the Labour Code of Vietnam, a work permit is required for each foreign individual before they can take on any sort of employment in Vietnam. There is an exception though – foreigners can undertake employment when they fulfill the exemptions and obtain the proper exemption certificates.

Related Reading: Guidance on Vietnam’s Entry for Foreign Employees in 2021

Work without a Work Permit

As mentioned above, there are some conditions under which it is possible and legal to work in Vietnam without a work permit. Foreigners do not need to hold a work permit if they are:

  • Members of the Board of Directors of a JSC in Vietnam
  • Owners of single-member LLC in Vietnam
  • Members of multiple-member LLCs in Vietnam
  • Salespersons doing service sales activities for a non-Vietnamese company in Vietnam
  • Lawyers holding a law practice license issued by the Ministry of Justice

On the other hand, if a particular job position requires a work permit, not securing one is not an option. Not only that illegal foreign workers will be deported, but their employers will also be subject to penalties. This ranges as follows:

  • VND30 million to VND45 million for up to 10 foreign workers
  • VND45 million to VND60 million for 11 to 20 foreign workers
  • VND60 million to VND 75 million for over 21 workers

This concerns cases when foreigners work on an outdated or expired work permit.

Requirements to Proceed with Foreign Employment in Vietnam

Employers apply for work permits for specific roles or positions, and these permits cannot be transferred between roles or employers. In essence, a fresh work permit is necessary for each distinct role or position.

Also, apart from a work permit, foreigners need to have a business visa and residency permit in order to work and stay legally in Vietnam.

Work Permit

A work permit is mandatory if a foreigner’s employment in Vietnam takes over three months. To qualify for a work permit, Vietnam’s government requires higher education and qualified work experience in order to hire well-skilled foreigners only.

The requirements for a work permit and especially an obligatory length of professional experience vary depending on the position a foreigner is applying for. Read More.

Managerial executives require 3 years of experience. However for non-managerial executives, if the required expertise is not enough, you will only need to prove your MBA (Master of Business Administration) or other relevant documents.

Concerning directors, one year of experience in the field usually suffices. Last but not least, for investors, a work permit is not required under Vietnamese Law.

The permit is usually valid for up to 12 months and is renewable.

Other requirements of foreigners working in Vietnam include the following:

  1. The foreign employee must be at least 18 years old.
  2. Their physical condition must meet the work requirements and are able to provide a health certificate.
  3. Foreigners must have technical skills, and rich experience in the industry; the qualifications of such personnel must be certified by the competent authority of the foreigner’s residence country.
  4. Applicants must provide evidence from the local police department showing no criminal record in their country of residence, Vietnam, or any other location.

Business Visa

If you plan to work in Vietnam for no more than 3 months, you will have to acquire a business visa – a work permit is then unnecessary. You will just have to obtain an invitation letter from your business partner or organization in Vietnam.

However, in addition to the business visa, foreign employers and employees can still refer to the e-Visa procedures in Vietnam. According to Article 1 of Resolution No. 127/NQ-CP, the e-Visa option in Vietnam is accessible to individuals from all nations and regions. Recent updates reveal that the duration of the Vietnam e-Visa will now extend to 90 days, allowing for both single and multiple entries. This marks a change from the prior restriction of 30 days and a single entry (Article 2 Law No. 23/2023/QH15).

Learn more in our Guide to Applying for a Business Visa in Vietnam.

Residency Permit

A residency permit is just as important as a work permit because it allows foreign citizens to stay in Vietnam while working in the country. Therefore both work permits and residency permits have the same validity.

Continue reading our previous post Introduction to a Temporary Residence Card in Vietnam

Other Important Notes

  • The Vietnamese government (the Department of Labor, Invalid and Society) issues work permits, business visas, and residence visas.
  • All documents regarding foreigners in the application dossier must be notarized.
  • The government in Vietnam pays even more attention to foreigners in certain sectors such as pharmaceutical operations, education, farming, export, or import.

Application Process for a Work Permit in Vietnam

The application process for a work permit is as follows:

  1. Employers need to submit a foreign labor use report 30 days before an employee starts working.
  2. Employers then can submit a work permit application dossier. Typically, the process takes 15-30 days, varying based on the acceptance or rejection of the application.
  3. In case of a rejected work permit application, employers are required to provide the additional documents requested by the authority. Conversely, if the application is approved, a work permit will be granted.
  4. The employee is then legally employed and can start working.

Taxes for Foreign Employees in Vietnam

Upon hiring an employee, employers must proceed to register them with the tax revenue department. Foreign employees in Vietnam have a progressive income tax ranging from 5% to 35%.

Currently, in 2021 both employers and foreign employees are responsible for health insurance tax (3% from the employer and 1.5% of the employee’s salary). In addition, the employer will also need to pay for the social insurance tax (3.5%) and trade union fee (2%).

Minimum Wage of Employment in Vietnam

Companies must conduct their hiring practices in alignment with the minimum wage regulations established by the Vietnamese government.

The minimum wage in Vietnam increased by 6.5% in 2018, making the minimum wage range from USD 118 (VND 2.76 million) to USD 171 (VND 3.98 million). According to a proposal by Vietnam’s National Wage Council, the minimum wage increased by 5.3% this year, so currently the minimum wage ranges from USD 126 (VND 2.92 million) to USD 180 (VND 4.18 million) in 2019.

[2020 UPDATE]

The detailed 2020 monthly minimum wage increments in Vietnam are outlined below, taking into account the cost of living in each region:

  • In urban centers such as Ho Chi Minh City, Danang, & Hanoi the wage is 4,420,000VND (+7% increase for skilled workers)
  • For areas outside of these three large cities, consult with InCorp Vietnam

Apart from the minimum wage raise, employers need to pay employees who have been in vocational training a salary that is 7% higher than the minimum salary. Even with the increase in the minimum wage in 2020, employers cannot decrease employees’ allowances for overtime, hardships, and/or night shifts.

The unemployment insurance’s capped salary will also increase following the hike in the minimum wage:

  • Region 1: from US$3,600 to US$3,800
  • Region 2: from US$3.200 to US$3,380
  • Region 3: from US$2,800 to US$2,950
  • Region 4: from US$2,344 to US$2,645

About Us

InCorp Vietnam is a leading provider of global market entry services. We are part of InCorp group, a regional leader in corporate solutions, that encompasses 8 countries in Asia-Pacific, headquartered in Singapore. With over 1,100 legal experts serving over 15,000 Corporate Clients across the region, our expertise speaks for itself. We provide transparent legal consulting, setup, and advice based on local requirements to make your business perfectly fit into the market with healthy growth.

Don’t take our word for it. Read some reviews from some of our clients.

Contact Our Consultant

Contact Form

Ian Robin Comandao

Verified by:​

Ian Robin Comandao

Ian Robin Comandao is the Head of the Business Consulting Department of Incorp Vietnam. He is a Sales and Marketing professional with 15+ years of experience in key accounts management.