Expanding business operations to Vietnam often entails hiring foreign employees to meet specific skill requirements or managerial needs. However, navigating the legal and administrative landscape for hiring expatriate workers can be complex. Understanding the visa, work permit, and tax regulations is crucial for both employers and foreign workers looking to work in Vietnam.

1. Types of Visa

Foreign employees must obtain the appropriate visa before they commence work in Vietnam. The most common forms of work visas for expatriate workers include:

• Short-Term Visas: For short periods, expatriates can apply for an Electronic Visa (E-visa) or a Business Visa. The E-visa is valid for up to 30 days with a single entry and is available to citizens of 80 countries entering through designated border gates. The Business Visa, on the other hand, is sponsored or invited by a Vietnamese entity and allows a resident duration of up to 90 days, with the option for multiple entries.
• Long-Term Visas: For longer periods, expatriate workers can apply for a Temporary Residence Card (TRC) for up to 2 years or a Working Visa for up to 1 year (for Chinese passport holders). To qualify for these visas, foreign workers must obtain a work permit and fulfill all requirements as prescribed by Vietnamese law.

2. Work Permit

Obtaining a work permit is a crucial step for foreign employees wishing to work in Vietnam. However, the process is initiated and facilitated by the employer in Vietnam, not the expatriate worker. The key steps involved in obtaining a work permit are:

• Approval Process: Employers must first seek approval from the Ministry of Labor, Invalids, and Social Affairs (MoLISA) to employ a foreign worker. This application should ideally be submitted at least 15 days before the foreign worker’s employment commencement.
• Work Permit Application: After obtaining approval, the employer must apply for a work permit on behalf of the expatriate worker. The application process varies depending on the position and involves meeting specific requirements under Vietnamese law.
• Labor Contract: Once the work permit is secured, the employer and expatriate worker must enter into a labor contract and notify MoLISA accordingly.

3. Tax and Social Security Contributions

Employers in Vietnam have obligations towards their employees, including foreign workers, regarding tax and social security contributions. After obtaining a work permit, employers must:

• Pay Social Insurance: Employers and employees are required to contribute to various social insurance funds, including retirement, sickness, maternity, occupational accident, and disease.

Table 1- Social contributions for expatriate workers

• Personal Income Tax: Employers are responsible for withholding and remitting personal income tax on behalf of their employees, including foreign workers. See more information about Personal Income Tax at Wages, Personal Income Tax and Working Hours in Vietnam.
• Annual Reporting: Employers must report the use of expatriate workers annually, providing details of their employment status and contributions to relevant authorities.

In conclusion, hiring foreign employees in Vietnam requires careful consideration of visa, work permit, and tax regulations. By understanding and complying with these legal requirements, employers can successfully onboard expatriate workers while ensuring their rights and obligations are met within the Vietnamese legal framework.