Knowledge Highlights 20 January 2021
On 15 February 2021, Decree 152/2020/ND-CP (“Decree 152”), which combines regulations relating to foreigners working in Vietnam (Decree 11/2016/ND-CP) and the recruitment and management of Vietnamese citizens working for foreign organisations and individuals in Vietnam (Decree 75/2014/ND-CP), will come into force and replace the previous decrees.
In general, Decree 152 does not significantly change the content of the previous decrees but instead aims to provide more clarity and better align the provisions with the Labour Code 2019.
This article discusses some of the key highlights of Decree 152.
1. Change in criteria for foreigners working in Vietnam
Decree 152 imposes a stricter criteria for determining an expert. It no longer allows a foreign employee to be certified as an expert by a foreign agency, organisation or enterprise for the purposes of working in Vietnam. Experts will now be determined solely by (i) their years of working experience; and (ii) their qualifications (relevant degrees or practising certificate). A minimum of three years of working experience is required for a person with a bachelor’s degree or higher qualification, and a minimum of five years working experience is required for a person who does not have such qualifications but has instead a relevant practising certificate. In certain circumstances where the applicant for a work permit does not meet this criteria, the Ministry of Labour Invalids and Social Affairs may refer the application to the Office of the Prime Minister. Decree 152 introduces an additional ground for consideration where the work permit sought is for a technician. Under the previous decree, a person is considered a “technician” if he/she has been trained in technical or other fields for at least one year and has worked for at least three years in that field. Decree 152 now requires that such a person should also have at least five years of working experience in a job suitable to the position expected to be worked in Vietnam.
2. Amendments and clarification on work permit exemptions
Decree 152 provides that (i) a foreigner married to a Vietnamese citizen is now exempted from requiring a work permit; and (ii) a person who provides a prescribed amount of capital contributions or holds a prescribed shareholding percentage, and holds certain managerial positions in an enterprise, may be considered for an exemption from the requirement to hold a work permit. Decree 152 also further clarifies the classes of people, as set out under the previous decree, who may be exempted from holding a work permit cases.
Under Decree 152, the following classes of people are exempt from the requirement to hold a work permit:
- The owner or a capital contribution member of a limited liability company where the value of the capital contribution is 3 billion Vietnam Dong or more;
- A shareholder being the chairman or a member of the board of management of a joint stock company where the value of the capital contribution is 3 billion Vietnam Dong or more;
- The head of the representative office, project or a person otherwise taking main responsibility for the operation of an international organisation or foreign non-governmental organisation in Vietnam;
- A person entering Vietnam for a period of less than three months to (i) offer services for sale; or (ii) resolve a breakdown or address a technically or technologically complex situation affecting or with the risk of affecting production or business, which experts currently in the country are unable to fix;
- A person entering Vietnam by way of an internal transfer to work for an enterprise operating one of the 11 services listed in the Schedule of Specific Commitments in Services under Vietnam’s accession to the World Trade Organisation;
- A person entering Vietnam to work as a manager, managing director, expert or technician for a working period of less than 30 days not more than three times per year;
- A person entering Vietnam to provide expert and technical consultancy services or to carry out other tasks servicing the work of research, formulation, evaluation, monitoring and assessment, management and implementation of a program or project using official development aid (“ODA”) in accordance with an international treaty on ODA signed by the competent authorities of both Vietnam and another country;
- A person appointed by a foreign agency or organisation to come to Vietnam to teach or to conduct research in an international school managed by a foreign diplomatic office or the United Nations, or an office or organisation established according to agreements executed or participated in by Vietnam;
- A person in charge of setting up the commercial presence of an organisation in Vietnam;
- A foreign lawyer issued with a practicing certificate to practise law in Vietnam in accordance with the Law on Lawyers;
- A person issued with an operational licence in the information and press sector in Vietnam by the Ministry of Foreign Affairs in accordance with the law;
- A person entering Vietnam to implement an international agreement signed by a central or provincial level agency or organisation in accordance with the law;
- A person having a service passport working for a State agency, political organisation or socio-political organisation;
- A person with confirmation by the Ministry of Education and Training that he/she is entering Vietnam for teaching or research;
- A volunteer entering Vietnam to perform work without any remuneration in accordance with international treaties of which Vietnam is a member and his/her entry being confirmed by a foreign diplomatic office or international organisation in Vietnam;
- A student currently studying at a school or training establishment overseas and who has an agreement for practical training at an agency, organisation or enterprise in Vietnam, or a student performing practical training on Vietnamese vessels;
- Relations of members of a foreign representative agency in Vietnam who are permitted to work according to an international treaty of which Vietnam is a member;
- A person getting married to a Vietnamese citizen and living in the territory of Vietnam; or
- Other cases in accordance with international treaties which Vietnam is a member or pursuant to Government regulations.
3. Change on process of extension of a work permit
Under Decree 152, a work permit, which is issued initially for a term of two years, can be extended once for another two years. This is a change from the position under the previous decree, which did not limit the number of extensions for a work permit. Under Decree 152, if an employer still intends to employ a foreign employee upon the expiry of the extended work permit, the employer must apply for a new work permit. It should be noted that this application will be reviewed as completely as a new application. Such change may administratively burden employers as the application process for a new work permit is more onerous than an application for the extension of a work permit.Extensions of work permits, both under Decree 152 and the previous decree, are subject to the authorities’ review of the need for the recruitment of foreign employees for specific positions.
4. Recruitment and management of Vietnamese citizens working for foreign organisations and individuals in Vietnam
Decree 152 now allows foreign organisations and individuals to directly recruit Vietnamese citizens without engaging specified recruitment organisations, a requirement under the previous decree. However, the foreign organisation or individual is obliged to provide written notice (with a certified copy of the labour contract attached) to the competent authority within seven working days from the date of signing the labour contract.
For clarification, the term “foreign organisations” includes foreign entities established under foreign laws as well as their representative offices in Vietnam but excludes foreign-owned companies established under the law of Vietnam.