Trade Unions, Statutory Insurance, Visa/Temporary Residence Card, Work Permits

1. Trade Unions Within six months after an enterprise commences operation, trade unions could voluntarily be organized to represent and protect the legitimate rights and interests of individual laborers and labor collectives. All enterprises, regardless if they are domestic or foreign, have to submit a remittance of 2% of their salary fund which is used as the basis for social insurance payment for employees. This salary fund will be the total salaries of employees under objects payable social insurance in accordance with the law on social insurance. Enterprises can claim back 65% of the fund for its trade union membership activities only if trade unions are organized. All acts of obstructing the setting up and operation of trade unions at enterprises are strictly forbidden.

2. Statutory Insurance Regulations state that both employers in Vietnam and Vietnamese employees with a labor contract of three months or more (this will change to one month effective 1st January 2018) are required to make statutory Social Insurance (“SI”), Health Insurance (“HI”) and Unemployment Insurance (“UI”) contributions. – Expatriates contractually employed by a local entity for 3 (three) months or more are required to make statutory HI contribution only. – Expatriates who have work permits or licenses will be required to make SI contribution effective 1 January 2018. – The basis for statutory SI and HI contributions is the contractual salary and is capped at 20 (twenty) times the national statutory minimum monthly salary.

3. Visa/Temporary Residence Card To visit Vietnam, foreigners require visas which must be obtained in advance from an overseas Vietnamese embassy or consulate. Visas are only issued on entry to the country in exceptional circumstances, such as for funerals of relatives, for visits to seriously ill relatives, urgent technical support for specific programmers, projects or departure from a country that does not have a Vietnamese Consulate or any diplomatic representatives. There are certain countries whose citizens are not required to obtain a Vietnamese entry visa for stays of specified periods in accordance with the bilateral treaties signed between Vietnam and such countries. Foreigners who temporarily reside in Vietnam for employment with a valid work permit are able to apply for temporary residence cards  which will be issued by the Immigration Division of the Department of Public Security. The duration of each temporary residence card will follow validity of the work permit (maximum 2 years). A foreigner who has a temporary residence card will be exempted from applying for a visa when entering and leaving Vietnam during the period of validity of the temporary residence card.

4. Work Permits Decree 11/2016/ND-CP of the Government that took effect on 1 April 2016 features several key changes relating to work permits. As such, foreigners working for business entities and organizations in Vietnam must be issued with a work permit except in specific cases stipulated by the law. Enterprises must confirm and explain their need to recruit an expatriate for each job position by submitting a standard form to the municipal committee. It will take 30 days for the municipal committee to confirm their acceptance, before a company can apply for work permit. To apply for a work permit, an application dossier must be submitted at least 15 working days prior to the day on which the foreign worker intends to start working in Vietnam for approval. It takes 10 business days to process the application for a work permit. The work permit remains valid for up to 2 years and may be extended under specific circumstances as indicated by law.

Lawyers for enterprises and foreign investment advising