Notes When Businesses Use Foreign Workers

Notes When Businesses Use Foreign Workers

Currently, Vietnam's labor force has well met the labor requirements of enterprises. However, for specific positions that require experience and specific knowledge, enterprises still need to use foreign workers because Vietnamese workers cannot meet both quantity and quality. Here are the issues that employers should keep in mind when employing foreign workers:

1. Determining the position of personnel when using labor

Employers need to locate foreign workers to obtain approval from the Provincial People's Committee before hiring. More specifically, this is the step where the employer will determine the positions to be filled (as specialists, executives, managers, or technical workers), and the number of employees for each position. The application for approval of the employment position should be made at least 30 days in advance from the expected date of employment of foreign workers.

This is an important step because the approval of the Provincial People's Committee will be the basis for issuing the work permit. In addition, the determination of the location of the employer also affects the composition of the documents that the employee needs to provide when applying for a work permit.

2. Determining how employees work at the enterprise

Employers need to determine whether foreign workers will work in Vietnam in the form of signing a labor contract or moving within the enterprise. This will directly affect the profile that the employer needs to prepare and the conditions that the employee needs to meet. In addition, it should be noted that the form of work in Vietnam also directly affects the social insurance policy applied to employees. Some cases of foreign workers moving internally are exempt from work permits.

3. Are foreign workers exempt from work permits?

Foreign workers in some cases will be exempted from work permits. However, the employer still has to apply for confirmation from the Department of Labor, War Invalids, and Social Affairs that the employee is exempt from the work permit. Here are a few cases that are exempt from work permits that employers should note:

- Foreigners who are owners or capital contributors of a limited liability company with a capital contribution value of VND 3 billion or more.

- A foreigner who is the Chairman of the Board of Directors or a member of the Board of Directors of a joint-stock company with a capital contribution value of 3 billion VND or more.

- Foreigners Moving within enterprises within 11 service industries in Vietnam's service commitment schedule with the World Trade Organization, including business, information, construction, distribution, education education, environment, finance, health, tourism, culture, entertainment, and transport.

- Foreigners entering Vietnam for a period of fewer than 3 months to handle problems, technical situations, and complex technologies that arise affecting or potentially affecting production and business that Vietnamese experts and foreign experts currently in Vietnam can't handle it.

- Foreigners marrying Vietnamese and living in Vietnamese territory

The fact that employees are exempt from work permits will save time and costs for businesses.

4. Foreign workers on probation still need a work permit

The current Labor Law does not distinguish between the probationary period for foreign workers and Vietnamese workers. Therefore, the regulations on the probationary period still apply to foreign workers. However, employers should also note that foreign workers still need a work permit to work legally in Vietnam even though they are still on probation. This is an issue that employers need to pay attention to be able to estimate in advance the necessary costs that may arise in the process of recruiting foreign workers, as well as to avoid possible disputes.

5. A labor contract must be signed for foreign workers

After being granted a work permit, the employer and the foreign worker must sign a written labor contract following Vietnam's labor law before the expected date of employment for the employer. 

How to sign a labor contract depends on the needs of Vietnamese enterprises to use foreign workers as well as the agreement of the two parties. According to the Labor Code 2019, there are 2 types of contracts:

(i) An indefinite-term labor contract is a contract in which the two parties do not determine the term and the time of termination of the contract's validity;

(ii) A fixed-term labor contract is a contract in which the two parties determine the term and the time of termination of the contract's validity within 36 months from the effective date of the contract.

However, the employer needs to base oneself on the duration of the work permit to choose the appropriate type of contract. Within 05 working days from the date of signing the labor contract, the employer must send a copy of the signed labor contract to the Department of Labor, War Invalids and Social Affairs where the work permit has been issued. 

6. Temporary residence card for workers

When a foreign worker is granted a work permit or a work permit exemption certificate, the employer needs to apply for a temporary residence card for the foreign worker. The temporary residence card under the labor category will be valid for 2 years and can be extended. After being granted a temporary residence card, the employee can use it to open a bank account, apply for a driver's license, register a phone sim card, etc. However, the employer should note that when labor relations end, the employer will need to revoke the work permit and temporary residence card issued to the foreign worker to return it to the competent authority under the law.

Please contact us for further assistance:


Address: No. 42, 26 Nguyen Hong, Lang Ha Ward, Dong Da District, Hanoi City, Vietnam

Phone: 0869 907 519 | 0867 439 725



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