Regulations on Foreign Workers Working in Vietnam: Focusing on Appointment, Intra-Corporate Transfer, Secondment, and Direct Hiring
Attorney admitted in Japan and Vietnam
Kazuya Mori, Senior Advisor (Japanese Law) to the same firm
NEXORA LAW FIRM Managing Partner
Vietnamese Attorney
Mediator, Bankruptcy Trustee, and Outside Statutory Auditor
Table of Contents
01 - How Foreign Workers Are Handled at Vietnamese Local Subsidiaries
02 - Intra-Corporate Transfer and Appointment of Foreign Workers
03 - Secondment (Dispatch) of Foreign Workers
04 - Direct Employment of Foreign Workers
NEXORA LAWFIRM provides extensive support to Japanese companies and other foreign-invested enterprises in Vietnam on matters relating to license acquisition, contracts, and labor management for the appointment, intra-corporate transfer, secondment, and direct hiring of foreign workers. This article organizes, in clear terms, the practical points to address based on the latest labor and immigration law. It is intended for readers interested in topics such as "procedures for appointing foreign workers in Vietnam," "expatriate transfers and work permits," "regulations on employing foreigners in Vietnam," "requirements and points to watch for secondment and direct hiring," and "practical management of foreign personnel for Japanese companies," providing the knowledge needed to respond smoothly in practice while minimizing legal risk.
01 - How Foreign Workers Are Handled at Vietnamese Local Subsidiaries
Foreign workers working in Vietnam, including Japanese nationals (hereinafter "foreign workers"), may work under the following arrangements:
Performance of an employment contract
Intra-corporate transfer
Performance of a contract or agreement relating to the economic, commercial, financial, banking, insurance, science and technology, culture, sports, education, vocational training, or healthcare sectors (secondment)
Performance of a service-provision contract with a Vietnamese entity (where the foreign worker is the service provider)
Sales of services
Working for a foreign non-governmental organization or international organization permitted to operate in Vietnam
Volunteering
Preparing to establish a commercial presence
Serving as a manager, executive, expert, or technical worker
Performing a project or contracting arrangement in Vietnam
Being a family member of a member of a foreign representative office permitted to work in Vietnam under an international treaty to which the Socialist Republic of Vietnam is a party.
02 - Intra-Corporate Transfer and Appointment of Foreign Workers
2‐1
Requirements for an Intra-Corporate Transfer
A foreign worker on an intra-corporate transfer is, for example, someone transferred from a parent company in Japan to a Vietnamese subsidiary to work there as a manager, executive, expert, or technical worker. A foreign worker on an intra-corporate transfer must have at least 12 consecutive months of work experience with the transferring employer (the parent company) prior to the transfer.
【Requirements for an Intra-Corporate Transfer】
2‐2
Employment Relationship in the Case of an Intra-Corporate Transfer
As noted above, a foreign worker on an intra-corporate transfer works in Vietnam either by being appointed to the local entity (requiring a letter of appointment) or by being seconded to it (requiring a secondment agreement), while maintaining their employment contract with the parent company.
Because a foreign worker on an intra-corporate transfer maintains their employment contract with the Japanese parent company as-is, working conditions, treatment, and related matters are governed by Japanese law and the Japanese employment contract. Accordingly, in principle, the salary is paid not by the Vietnamese local entity but by the Japanese parent company. Where the Japanese parent company wishes to have the Vietnamese local entity bear the personnel costs of the foreign worker dispatched there, a written contract or agreement between the parent company and the local entity covering that cost allocation must be concluded. (※ "Personnel costs" here include salary, allowances, housing rental costs, and the like.)
2‐3
Points to Note Regarding Intra-Corporate Transfers
① Even in the case of an intra-corporate transfer, a work permit is generally required to work in Vietnam, except in the case described in ② below.
Please refer to 【Procedure for Obtaining a Work Permit】.
② Where the intra-corporate transfer falls within one of the 11 service sectors on Vietnam's WTO services commitment schedule (business, information, construction, distribution, education, environment, finance, healthcare, tourism, culture/entertainment, and transport), no work permit is required. However, an approval of work permit exemption must still be obtained.
Please refer to 【Procedure for Obtaining an Approval of Work Permit Exemption】.
③ A foreign worker on an intra-corporate transfer is not required to join Vietnam's social insurance scheme. Where the arrangement does not qualify as an intra-corporate transfer, enrollment in Vietnam's social insurance scheme is required, which increases the financial burden on both the company and the employee. For this reason, it is advisable for the worker to confirm, before beginning work in Vietnam, whether the arrangement qualifies as an intra-corporate transfer and, if not, whether social insurance contributions in Vietnam will be required.
03 - Secondment (Dispatch) of Foreign Workers
Even where an arrangement does not qualify as an intra-corporate transfer, there is often a need to send a Japanese employee to work in Vietnam. One example is a case where a Japanese bank employee is sent abroad to explore business opportunities and is seconded to a Vietnamese bank (an affiliate or business partner). The following points should be noted in connection with personnel secondment between such related parties:
① A work permit must be obtained before beginning work in Vietnam.
② Because the arrangement does not qualify for social insurance exemption, enrollment in Vietnam's social insurance scheme is required.
③ In principle, personnel costs must be borne by the Japanese employer. Where the Vietnamese counterparty is to bear part of the cost, this must be documented through a contract or agreement. The Vietnamese counterparty may pay part or all of the salary into the foreign worker's Vietnamese bank account on behalf of the Japanese employer (payment by proxy); accordingly, depending on the worker's preference, part or all of the salary can be received in Vietnam, in Vietnamese dong.
④ As with an intra-corporate transfer, because the employment contract with the Japanese employer remains in effect, working conditions and treatment continue to be governed by Japanese law and the Japanese employment contract.
04 - Direct Employment of Foreign Workers
An employer in Vietnam (a local subsidiary, branch, representative office, etc.) may enter into an employment contract directly with a foreign worker. Where a foreign worker enters into an employment contract directly with a Vietnamese employer, they must strictly comply with Vietnamese law, including the labor standards and minimum treatment requirements set out in the Vietnamese Labor Code.
4 －１
Qualification Requirements
A foreign worker permitted to work in Vietnam (in the case of direct employment) must qualify under one of the following categories: manager, executive, expert, or technical worker.
Position
Requirements
Manager
Falls within the definition of a manager under Article 4(24) of the Enterprise Law No. 59/2020/QH14 (※), or is the head or deputy head of a company or organization. Includes the owner of a sole proprietorship, the chairman of the Members' Council, the chairman of the Board of Directors, a director, and a (general) director, among others.
※ "Manager" of a company refers to a manager of a sole proprietorship and a manager of a company, and specifically includes: the owner of a sole proprietorship, a member of a partnership, the chairman of the Members' Council, a member of the Members' Council, the chairman of the company, the chairman of the Board of Directors, a director or general director, and any other individual holding a managerial position under the company's charter.
Executive
The head of a branch or business location of a company, or a person who manages at least one department and acts under the direction of the head of the organization.
Expert
A foreign national with a bachelor's degree or higher, or an equivalent qualification, plus at least three years of relevant work experience; or a foreign national with at least five years of relevant experience together with a supporting qualification certificate. Certain exceptions also apply.
Technical worker
A person who has received at least one year of specialized technical training and has at least three years of relevant work experience, or who has at least five years of relevant work experience.
4 - ２
Minimum Wage
The regional monthly and hourly minimum wage rates are as follows.
Region
Monthly minimum wage (VND/month)
Hourly minimum wage (VND/hour)
Region I
4,960,000
23,800
Region II
4,410,000
21,200
Region III
3,860,000
18,600
Region IV
3,450,000
16,600
※ The list of localities comprising Regions I, II, III, and IV is set out in the appendix to Decree No. 74/2024/ND-CP.
※ The minimum wage regulations apply to both Vietnamese and foreign workers, but they are essentially set with rank-and-file Vietnamese workers in mind. In the case of foreign nationals, since they are not ordinary workers but must instead qualify as a manager, executive, expert, or technical worker, the salary must be set at a level that adequately reflects their educational background and work history.
4 - 3
Enrollment in Statutory Insurance
The statutory insurance schemes applicable to foreign workers are as follows.
Category
December 1, 2018 – December 31, 2021
From January 1, 2022
Employer contribution
Employee contribution
Total
Employer contribution
Employee contribution
Total
Social insurance (including occupational accident insurance)
3.5%
None
3.5%
17.5%
8%
25.5%
※ For a foreign worker who has entered into employment contracts with multiple employers, only the first employment contract requires the employee and employer to pay social insurance contributions; no social insurance contribution is required under subsequent contracts. However, occupational accident and occupational disease insurance premiums must be paid by every employer under each employment contract entered into.
※ Upon leaving Vietnam, a pensioner or a recipient of monthly social insurance benefits may authorize another person to receive their pension or benefits on their behalf, or, if preferred, may elect to receive the benefit as a lump-sum payment.
4 - 4
Working Hours and Rest Breaks
① Working hours
Normal working hours
Under the general rule on working hours, an employer may not require an employee to work more than 8 hours per day or 48 hours per week. The employer must set and notify the employee of working hours on a daily or weekly basis. Where working hours are set on a weekly basis, they may not exceed 10 hours per day or 48 hours per week. A 40-hour work week is also encouraged.
② Overtime
Overtime refers to work performed beyond normal working hours and requires the employee's consent. It is subject to limits of 12 hours per day, 30 hours per month, and 200 hours per year, although for certain types of work, overtime of up to 300 hours per year is permitted.
In emergencies, an exception applies under which the overtime limits do not apply.
③ Rest breaks
For a shift of 6 to 8 hours, at least a 30-minute break is required; for night shifts, a 45-minute break is required. Under a shift system, at least 12 hours must elapse (as a rest period) between the end of one shift and the start of the next.
④ Weekly rest
Employees must be given at least 24 consecutive hours of rest each week; where particular circumstances apply, the employer must ensure an average of at least 4 days off per month.
⑤ Public holidays and Tet
Employees are entitled to 10 days of paid public holiday per year, the specific dates of which vary from year to year, including the solar New Year and Lunar New Year (Tet).
⑥ Increase in annual leave
For every 5 years of continuous employment with the same employer, an employee's annual leave entitlement increases by one additional day.
⑦ Overtime pay
Overtime must be paid at a premium of at least 150% of the normal wage on ordinary working days, 200% on weekly rest days, and 300% on public holidays and paid leave days. An additional 30% premium must be paid for night work.