On 3 February 2016, the Government issued Decree No.11/2016/ND-CP detailing the implementation of a number of articles of the Labor Code regarding foreign employees in Vietnam (“Decree 11”). This Decree basically created a synchronous, comprehensive and timely legal framework governing labor relations applied to foreign employees. It also created favorable conditions for businesses, agencies and organizations to recruit foreign employees and helped to strictly manage foreign employees nationwide.

However, during the implementation of Decree 11, there were still a few problems which arose. For instance: (i) the provisions on foreign employers were insufficient; (ii) the provisions for foreign employees working as experts in Vietnam were not suitable in practice; (iii) the period in which local agencies and organizations provide contractors with Vietnamese employees was inappropriate; (iv) the provisions regarding work permits (“WPs”), including compulsory WPs granted to foreign employees in Vietnam for a short period, have caused many difficulties for foreign employees and employers, etc.

Therefore, the Ministry of Labor, War Invalids and Social Affairs has proposed a draft decree on foreign employees working in Vietnam (“the Draft“) to address these limitations. Accordingly, some key points in the Draft follow:

  1. Regarding the subjects of employer recruiting foreign employees:

 The Draft has supplemented two types of foreign employers: (i) Representative offices, branches of agencies and organizations licensed by competent authorities; and (ii) International organizations; offices of foreign projects or international organizations in Vietnam; agencies and organizations permitted to be established and operated by the Government, the Prime Minister, ministries and branches according to Vietnamese regulations.

  1. Regulations applied to foreign employees as experts:

This provision in Decree 11 is not quite suitable for foreigners who have high professional and technical qualifications when working in Vietnam. Therefore, the Draft has specified more details on requirements for foreign employees who are experts. The Draft has added more requirements: (i) to have a training certificate suitable for the expected job position in Vietnam; and (ii) to hold a doctorate degree, associate professor or professor title suitable for the expected job position in Vietnam. For a CEO position, 12 months’ experience in management and administration is required.

  1. Duration that the local agencies and organizations provide Vietnamese employees to contractors:

The proposed duration is a decrease from 1 month to 20 days, creating favorable conditions for contractors wishing to recruit less than 100 employees. Previously, there was a long time to wait.

  1. Regulations regarding work permit:

 Decree 11 required a foreign employee in Vietnam to have a WP, including a foreign employee working in Vietnam for a short term, which caused many difficulties and impracticability. Therefore, the Draft has proposed not to grant a WP for foreign employees working in Vietnam as experts, managers, executive directors or technicians with a working period less than 20 days.The Draft has also removed provisions with respect to the cumulative working time of less than 90 days for foreigners, which makes it possible to limit the number of foreign employees trying to stay in Vietnam illegally.

In addition, in order to resolve the inconsistencies in the regulations concerning applications for WPs for foreign employees especially for foreign employees with professional qualifications, high engineering degrees or foreign employees who have been granted WPs. The Draft has proposed requirements for the WP application such as providing official forms enclosed in the appendix, specifying the professional certifications suitable for each working sector, etc.

  1. Re-grant of work permit:

 The regulations on the re-grant of WPs in Decree 11 are still fairly rigid and inappropriate with the actual situation such as: (i) requiring an employee to have a WP with a remaining term of at least 5 days, but not more than 45 days, to provide a health certificate or an appropriate medical report (as prescribed in Decree 11); or (ii) requiring a foreign employee as an expert, manager, managing director or engineer previously granted a WP (according to Decree No.102/2013/ND-CP), which expired to provide further documentation to be re-granted a new one. The Draft has removed these rigid regulations and also presented other specific provisions on the application forms for re-granting WPs. In particular, the foreign documents must be notarized, consularized and legalized and translated into Vietnamese, unless such consular legalization is exempted either under international treaties which Vietnam and relevant foreign countries are signatories; on the reciprocity principle; or as prescribed by law.

In general, the Draft has amended and supplemented a number of provisions from Decree 11 quite appropriately with practice, while helping to resolve the existing limitations and difficulties that businesses, organizations and individuals related to foreign employees working in Vietnam are now facing.


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