2011 11 September

New Regulation on Recruitment and Management of Foreigners Working in Vietnam: Should you worry ?

#Corporate and Commercial #Legal #Vietnam


The Decree No. 46/2011/NĐ-CP (“Decree 46”) issued by Government on 17 June 2011 amending several provisions of the Decree 34/2008/NĐ-CP (“Decree 34”) regarding recruitment and administration of foreigners working in Vietnam modify conditions applicable to foreign workers and provide further details on the specific responsibilities of the relevant authorities. While attention has been captured by certain new requirements/limitations, it should be pointed out that Decree 46, to a certain extent, also creates favorable conditions.

Additional subjects not required to obtain a work permit

Decree 34 provided that the following foreign individuals should not be required to obtain a work permit in order to work in Vietnam: (i) any foreigner working in Vietnam for a period of less than three (3) months; (ii) any foreigner being a member of a limited liability company with two or more members; (iii) any foreigner being an owner of one member limited liability company; (iv) any foreigner being a member of the board of management of a shareholding company; (v) any foreigner entering Vietnam to provide services, subject to certain specific conditions defined under the Decree 34; (vi) any foreigner entering Vietnam in order to resolve an emergency situation such as a breakdown or a technically or technologically complex situation arising and affecting, or involving a risk of affecting, the production [and/or] business and for which Vietnamese experts or foreign experts residing in Vietnam are unable to remedy; and (vii) any foreigner being a lawyer to whom the Ministry of Justice has issued a certificate to practice law in Vietnam in accordance with law.

Under the Decree as amended by Decree 46, the following foreign subjects shall not be either required to obtain a work permit: (i) Chiefs of representative offices of economic organizations, (ii) Heads of Project Offices, or foreigners authorized as representatives of non-governmental organizations for their activities in Vietnam; (iii) foreigners transferred internally by the mother company to the Vietnamese subsidiary provided that the relevant activities are service sectors listed under the WTO Commitments; (iv) foreigners entering into Vietnam in order to provide consultancy services or technology or to perform any missions in relation to activities of research, assessment, execution of Official Development Aid projects, programs, etc.; and (v) foreigners who are issued permits for press and information activities in Vietnam under Vietnam Law.

Reduced timeline for issuance of work permit

Under Decree 46, the timeline for issuance of a new work permit is reduced from 15 working days to 10 working days from the date of receiving valid and sufficient application. Likewise, the timeline for issuing an extension of work permit is reduced from 15 working days to 10 working days from the date of submission of a valid and sufficient application.

It should be pointed out that Decree 46, similarly to Decree 34, requires employers to demonstrate, at the time an application for issuance of a new working permit or of an extension of working permit, that it/he/she is developing a training plan in order for Vietnamese employees to ultimately replace foreign employees but that, at the point of the application, the relevant Vietnamese resources are not yet ready for the relevant replacement. Decree 46, in addition to the documents previously required under Decree 34 to be included in an application dossier for extension of the work permit (request for extension of work permit, a copy of the labour contract and of the former work permit), now requires the copy of the training contract for the Vietnamese replacement. It should be noted that, in practice, we had observed flexibility in implementing the relevant requirements under Decree 34. It is at this stage difficult to predict how the practice with respect to the current requirements under the amended Decree will evolve.

Finally, the timeline for re-issuing a work permit in case of loss, damage or change of passport numbers or working places registered on the previous work permit is reduced from 15 working days to 3 working days from the date of submission of a valid and complete application for re-issuance of work permit.

Detailing announcement of recruiting employees

Decree 34 stipulated that the employer must publish, not less than 30 days prior to launch the recruitment of any foreign employee(s), its need to recruit the relevant employee(s) in a central or local newspaper (in written, oral, pictorial or electronic form) and notify the following points: the number of employees to be recruited, the relevant tasks/responsibilities to be assigned, the specialized qualifications required, the salary level, and the working conditions. Decree 46 now provides that the employer must publish, not less than 30 days prior to recruiting a foreign employee, its need to recruit employee(s) in one central (at least) and one local (at least) newspapers in written, oral, pictorial or electronic form. As under Decree 34, the above announcement requirement does not apply if the employer recruits a foreigner via a recruitment agency or if the relevant position is in an international school under the management of a foreign diplomatic office or in an international non-governmental organization.

Responsibilities of foreign contractors regarding to recruitment of foreign employees

Foreign contractors shall specify in the tender documents and proposal documentation the methods for recruitment of foreign employees including positions, jobs, number of employees, terms for performing jobs, required professional skills, experience, etc and, if selected, must then comply with such contents. The foreign contracts shall prepare applications for issuance of work permits for foreign employees before they enter Vietnam to execute their jobs.

Responsibilities of relevant authorities and Measures against foreign workers not complying with regulations

The Ministry of Public Security is responsible for issuing the visas to foreigners once they have been issued work permits, extended or re-issued their work permits by the Departments of Labour, War Invalids and Social Affairs; is allowed to require exit/expulsion from Vietnam of foreigners having no work (permit unless such foreigners are exempted from work permit requirement) or whose work permit is invalid pursuant to Decree 34 and Decree 46.

Decree 46 will take effect on 1st August 2011. From 1 February 2012, the relevant public security authorities shall enforce exit or expulsion measures on foreigner employees who still have no work permit or have not submitted any application for issuance of work permit, based on proposals from the relevant Department of Labour, War Invalids and Social Affairs.

12 September 2011