Foreign Employees and Work Permits in Vietnam

The Government of Vietnam just released Decree 152/2020/ND-CP (“Decree 152”) on foreign employment and recruitment policies for Vietnamese employees hired by foreign companies in Vietnam.

Decree 152  replaces the earlier regulations and containing guidelines for the determination of forms and conditions for foreign workers to qualify to work in Vietnam, work permit (“WP”) exemption regulations, recruitment of foreign workers, renewals, and re-issuance of Work Permit.

Who needs to obtain a Work permit in Vietnam

Foreigners who want to work in Vietnam must obtain Work Permit. The workers can be classified as business managers, experts, or high-skilled laborers (technicians). To be eligible for Work Permit, a business manager must be appointed as the company’s director or legal representative, and his or her name must appear on the business license. He also needs at least 1 year of experience as a manager. For experts and high-skilled labor, the conditions are simply more difficult now, especially after the new law came out.

Old law Vs. New Law

For Experts

Previously, a foreign employee is classified as an expert if the following conditions are met:

• He/she possesses a document certifying that he/she is an expert of an international agency, organization, or business; or
• He/she has a bachelor’s degree or equivalent or higher qualifications provided that he/she has worked at least 03 years in his/her training field in corresponding with the job position that he/she shall be appointed in Vietnam and other special cases upon the consideration and decision of the Prime Minister.

Under the new law, decree 152, the first case is no longer accepted. The “expert” status  therein are determined only by:

• Their years of working experience must be from overseas; and
• Their qualifications  must match with the job (relevant degrees or practicing certificates)

as follows:

• Having a bachelor’s degree or equivalent or higher qualifications provided that he/she has worked at least 03 years in his/her training field overseas in corresponding with the job position that he/she shall be appointed in Vietnam;
• Having at least 5 years of experience overseas and professional certificates relevant to the position the foreign worker is expected to work in Vietnam;
• other special cases upon the consideration and decision of the Prime Minister.

For high-skilled labors

For the “technician” category, decree 152 also introduces an additional ground for consideration as high-skilled labor or a technician. In addition to the previous requirement of having been trained in technical or other fields for at least 01 years and having worked for at least 03 years in their training fields overseas, Decree 152 also requires that such person should have at least 5 years of working experience in the job suitable to the position expected to be taken in Vietnam.

The experience

By the new law, the experience used for the Work Permit application must be certified by an entity overseas. It means it is not possible to use the experience or another currently valid Work Permit to supplement anymore.

The ambiguity

According to the new regulation, the success of a Work Permit application is heavily reliant on how “relevant” and “suitable” a person’s degree, experience, and job position are. In fact, the old law did not require an English teacher to have a university degree in English teaching, plus to have overseas experience as an English teacher, the new law actually requires them all.

Furthermore, ambiguity in law writing leaves a large gap for WP processing officials to interpret the degree of suitability or relevancy between those criteria. Previously, a person with a degree from a Liberal school could obtain a work permit to work as a Sales Manager, or an engineer could work as a Math teacher in Vietnam. For the time being, all three must be linked together (somehow). How strong should the link be in order for the Work permit to be approved? Perhaps that is only determined by the official in charge of that application.

As the result, the new Decree places the burden of obtaining a Work Permit on the application document drafting specialist. To obtain approval for foreigner recruitment for the company, the reasons must be very well presented. To give a persuasive tone to the reasoning why the company needs this foreigner for the job, all elements of information must match.

Challenges for companies and foreign employees

Since the new law turned into effect, hundreds of Work Permit applications and renewals have been rejected due to a failure to demonstrate the link between the criteria. As the Vietnamese government cracks down on illegal employment, the Work Permit is becoming subject to stricter rules.

Therefore, for many businesses, successfully hiring ex-pats has become a never-ending process. Many ex-pats are unable to obtain or renew work permits, putting their visa and staying status in jeopardy. This reality has a significant impact on businesses, particularly those that rely heavily on foreigner recruitment, such as English teaching and schooling, digital marketing, temporary arts, and so on.

The new practice also has the potential to transform EOR (Employer of Record) firms that host employers through Corporate EOR service or Personal EOR service. As the Employer Of Record, the EOR company must bear responsibility for Work Permit sponsorship if the employees are not Vietnamese. In this regard, the EOR firm must ensure that its registered business lines are capable of hosting employees with diverse professional backgrounds and experiences. As a result, when it prepares the Work Permit application, the linkage and logic of criteria are depicted and become apparent.

Embracing reality

Vietnam Business Gateway (VNBG) is an EOR service provider in Vietnam market. We have the support of a large capital investment company that has been in operation for many years and has a positive history and record. Our entity has registered in a large number of business lines, which theoretically allows us to operate in a wide range of industries. It also means that we can easily justify the need for recruitment, both locals and ex-pats.