February 4, 2021 - Phnom Penh, Cambodia
Vietnam: New Decree 152 Outlines Key Changes on Foreign Employment and Recruitment Policies for Vietnamese Personnel Hired by Foreign Companies
by Segolene Leffy
On 30 December 2020, the Government of Vietnam issued Decree No. 152/2020/ND-CP (“Decree 152”) which will take effect on 15 February 2021 and replace Decree No. 11/2016/ND-CP of the Government of Vietnam dated 3 February 2016 (“Decree 11”), Decree No. 75/2014/ND-CP of the Government of Vietnam dated 28 July 2014 (“Decree 75”) and its corresponding amendments and supplemental decrees. Decree 152 includes guidance on the recruitment of foreign and Vietnamese employees working in Vietnam.
1. Conditions to qualify as a foreign expert or technician
Under Decree 11, a foreign employee was deemed to be a foreign expert if he or she had a document issued by an overseas organization or enterprise certifying that he or she was an expert. Under Decree 152, this document is no longer sufficient to evidence that he or she is an expert. Instead, an appropriate training certificate and a document confirmed by an overseas company/organization is required attesting to his or her having five years’ of experience appropriate to the expected position in Vietnam.
Similarly, under Decree 152, a foreign employee would be eligible to be recognized as a technician if he or she has at least five years’ of work experience suitable for his or her expected position in Vietnam. This is new criteria when compared to Decree 11.
2. Relevant work permit exemption provisions
Minimum capital contribution
Under Decree 11, a foreigner who owned or was a member of a limited liability company or was member of the board of management of a joint-stock company was exempt from having to hold a work permit, regardless of the level of capital contribution. Pursuant to Decree 152, a foreigner can only be exempt from the work permit requirement if his or her capital contribution in the company is at least VND 3 billion (approximately USD 130,400).
Under Decree 152, if foreign experts, managers, CEOs or technicians enter Vietnam to work for intervals of up to 30 days, no more than three times per calendar year, they may be exempted from obtaining a work permit. Under Decree 11, the threshold was 30 consecutive days and 90 aggregated days per year, less stringent than under Decree 152.
Additional reporting obligations
Under Decree 11, there was no need to obtain a work permit or a certificate of work permit exemption if a foreign employee spent less than three months in Vietnam to handle unexpected technical problems that exerted a large impact on the business or manufacturing operations. Foreign experts, managers, CEOs or technicians could enter Vietnam and work there legally for less than 30 consecutive days in any one period but not exceeding 90 days in total per year. The employer did not have to perform any administrative procedures in these scenarios.
Under Decree 152, employers with foreign personnel exempt from holding a work permit (or who have a certificate of work permit exemption) must inform the Ministry of Labor, Invalids and Social Affairs (“MOLISA”) or the provincial Department of Labor, Invalids and Social Affairs (“DOLISA”) of the foreign employee’s personal information and the expected employment start/end date, at least three days before his or her expected first working day in Vietnam. This is a new requirement.
3. Recruitment of Vietnamese personnel working for foreign employers in Vietnam
Under Decree 75, when a foreign employer wished to recruit Vietnamese employees, it had to first submit a written declaration to the competent authority stating its wish to employ Vietnamese nationals, requesting it to recruit Vietnamese employees on its behalf. If the competent authority was unable to find sufficient or suitably qualified Vietnamese personnel for the foreign employer within certain statutory timeframes, the foreign employer could then directly recruit Vietnamese employees.
Under new Decree 152, a foreign employer can now directly recruit Vietnamese workers, without first having to go through the competent authority or having to exhaust this option to do so.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
Read full article at: https://www.dfdl.com/resources/legal-and-tax-updates/vietnam-new-decree-152-outlines-key-changes-on-foreign-employment-and-recruitment-policies-for-vietnamese-personnel-hired-by-foreign-companies/