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Thoughts and issues with upcoming changes to Labour Laws and Work Permits (1 January 2021), and to Residency and Visa matters (1 July 2020), in Vietnam for foreign individuals, from Matthew Lourey, Managing Partner of Domicile Corporate Services

Impacts to Foreign Individuals from Changes to Labour Laws and Work Permits (1 January 2021), and to Residency and Visas (1 July 2020)?

1. Service Contracts are now Labour Contracts?

New Labour Laws will deem anything that smells like a “contract for provision of labour” to be a Labour Contract.  Service contracts, and similar, where someone is providing labour, for monetary compensation, under the supervision of an “employer”, will be deemed to a Labour Contract.

As a result, service contracts meeting the above will require Work Permits to be issued before they can be signed, as with all labour contracts (unless a specific Work Permit Exemption Certificate is obtained, or one of the limited exemption categories is met).

The use by many industries of service contracts to get around the labour law will be reduced, and expose employees (foreign individuals) and employers to action by the authorities. The Labour Law does prescribe deportation as the remedy for a foreign individual breaching labour laws with respect to Work Permits.

2. Small Investors will no longer be eligible for Temporary Resident Cards (or multi-year visas)

Up until the new laws come into effect, foreign individual investors have been entitled to 3 – 5 year Temporary Resident Cards, and were able to receive Work Permit exemptions, provided they were listed as an individual investor into the company.

However, under new laws, unless each foreign individual investors have more than VND3 billion (~USD130,000) invested as capital in a company, they will no longer be eligible for a Temporary Resident Card, but instead they will only be able to apply for a maximum 1 year (DT4) business visa.

Individuals who make large investments into Vietnam can, however, be eligible for up to 10 year Temporary Resident Cards under the new laws

3. Corporate Investors can nominate an individual to represent them in Vietnam and receive a Temporary Resident Card or Visa

Under existing laws, individuals are only able to receive investor-based visas or Temporary Resident Cards where they personally invest in a Vietnamese company.

Under the new laws, corporate investors will be able to nominate an individual to represent the corporate investor, and that individual will be able to receive business visas or Temporary Resident Cards for periods up to 10 years as the representative of that corporate investor.

4. Work Permit Exemptions for foreign individuals married to Vietnamese citizens

The new Labour Law introduces a new category of Work Permit exemption for foreign individuals residing in Vietnam and married to a Vietnamese citizen.

We need to see further guidance on this, and to what extent this can be utilised, but it should make it possible for those foreign individuals who have resided in Vietnam long term and hold Temporary or Permanent Resident Cards via marriage to be employed without the cumbersome Work Permit application process that is faced at present.

This advice is general in nature, and should not be replied upon as specific advice. Any actions or decisions in respect of the above matters should be considered in light of future Circulars and Decisions which are expected to be issued in the future to give further guidance on appropriate implications and implementation

For further assistance or any inquiries, contact:

Matthew Lourey, Managing Partner

email: matthew.lourey@domicilecs.com