Vietnamese authorities released Decree 70/2023/ND-CP (“Decree 70”) on 18 September 2023, which went into immediate effect, covering several major updates and practical clarifications relating to employing foreign experts in Vietnam. In this article, we cover the new provisions which amend the previous Decree 152/2020/ND-CP on Work Permits and Work Permit Exemptions in Vietnam, and delve into practical references and critical areas relevant for investors in Vietnam.
The new Decree 70 which regulates the procedures for Work Permits and WP Exemptions in Vietnam exhibits a series of important changes and requirements for investors. While the majority of these are meant to simplify current procedures based on feedback received from business chambers and associations in Vietnam, others may still pose challenges when implemented at the local regulatory levels.
Changes to requirements for seeking approval to use foreign labour:
The timeline for the initial phase (Step 1) of the Work Permit application process has been shortened from 30 days to 15 days from the anticipated date of foreign labour employment. This adjustment allows for later submissions in Step 1 and an earlier commencement of work for foreign labour. The revised deadline also applies to any necessary modifications or adjustments in Step 1, which now need to be made 15 days prior, down from the previous 30-day requirement.
Significantly, starting from January 1, 2024, employers are required to announce job vacancies for Vietnamese workers in the roles intended for foreigners via the MOLISA (Department of Employment) portal or Provincial Employment Service Centers. This announcement must be made at least 15 days before the expected submission of Step 1 and is a mandatory requirement. If no Vietnamese candidate is selected after this 15-day period, then Step 1 can be submitted. Currently, there are no specific requirements for providing evidence of the job announcement and the inability to hire Vietnamese candidates, but practical requirements from DOLISA may emerge.
Simplified role provisional requirements for Foreign Experts
The recent amendments to the regulations stipulate that for a role to be classified as an “Expert”, the incumbent must possess a minimum of a Bachelor’s degree or higher, coupled with at least three years of experience relevant to the role. This is a departure from the previous requirement where both the degree and the three-year experience had to be specifically in a field aligning with the job role or assignment.
For instance, under the new regulations, an individual in a “Marketing” role could satisfy the educational requirement with an MBA, rather than needing a specialized “Marketing degree” as was previously required.
Expanded scope for managerial level positions and updated documentation
Previously, the designation of “CEO/MD/ Executive” was confined to the heads of a company’s dependent units, although the term “dependent unit” was not explicitly defined. The revised regulations have expanded and clarified this scope. Under the new guidelines, a CEO is defined as either:
The leader of a branch, representative office, or business location; or
An individual who directly oversees at least one company domain and reports to the head of the company (primarily Directors or Chairpersons).
This includes roles such as CFO, CLO, CTO, which were previously categorized as “experts” with specific degrees and experience prerequisites. Now, these roles will be classified as “CEO”, eliminating the need to provide proof of their qualifications or experience.
In contrast to the previously ambiguous requirements for substantiating one’s role as a manager or CEO, the new regulations provide a clear list of documents that can be submitted for these job assignments:
The company’s charter or operational policies;
The Enterprise Registration Certificate (ERC) or an equivalent document; and
A resolution or appointment decision for the respective position.
These changes may offer a more straightforward and transparent process for verifying one’s professional status. However, clarification is still needed from the authorities regarding whether the titles of the CEO and manager must be explicitly stated in all required documents.
Requirements for Technical Worker roles (“TW”)
Under the previous regulations, applications for “Technical Worker (TW)” roles appeared to be limited in practice due to extremely specific conditions for these roles. However, the newly introduced conditions for the TW role are more accommodating. The new requirements for a TW role is to have “at least 1 year of training and a minimum of 3 years of relevant work experience”. This is a shift from the earlier stipulation of “having at least 1 year of specialized technical training and 3 years of experience in the trained field”.
While we have yet to validate this increased flexibility, it appears that the TW role is now accessible to foreign employees with specialization in any sector, as opposed to being restricted solely to those specializing in a technical sector.
Work Permit Exemption provisions covering foreign individuals married with Vietnamese citizens
According to the updated regulations, a Work Permit exemption application for foreign individuals married to a Vietnamese national is no longer subject to Step 1, as was previously the case. Consequently, organisations can directly inform DOLISA about the employment of a foreign individual who is married, without the need for an employment announcement. More importantly, since Step 1 is not required in this scenario, there are theoretically no time constraints for working with foreign individual married with Vietnamese citizens, unlike cases that necessitate a Work Permit.
Changes in the key regulatory bodies involved in Work Permit and WP Exemption approvals
Prior to Decree 70, the authority empowered to issue Work Permits (WP) and Work Permit Exemptions (WPE) was shared among several agencies, including the Department of Labor, Invalids and Social Affairs (DOLISA), the Ministry of Labor, Invalids and Social Affairs (MOLISA), and provincial People’s Committees, and Management Boards of Industry/Economic Zones. However, the new regulations have consolidated this authority, assigning it solely to DOLISA and MOLISA.
As an additional note, we have received official notifications from the Provincial Management Boards of Economic Zones in Ho Chi Minh City and Binh Duong which indicate that they will stop accepting applications for Work Permit and WP Exemptions from September 18 onwards, transferring this responsibility entirely to DOLISA, but will continue to process applications received prior to this date.
Expanded acceptable documents required for Expert or Technical Worker roles:
The updated regulations stipulate that the following documents are required to verify experience for job assignments:
Degrees, certificates, accreditations; and
Letters confirming experience or previously issued Work Permits/Work Permit Exemptions
Previous Vietnamese Work Permits/WPEs have been reinstated as a valid document for evidencing proof of experience in the Work Permit process. This is a departure from the previous regulation, which required a more restrictive “Degrees, certificates, and proof from offshore companies reflecting the years of experience”. The new regulation has broadened the range of acceptable documents for demonstrating experience, aligning with the practice that was followed prior to Decree 152.
Acceptable document formats are expanded
Under the new Decree, which simplifies the documentation format for Work Permit applications in Vietnam, organizations may choose to submit the applicant’s passport as:
a notarized copy, or
a certified true copy confirmed by the employer
Recording multiple workplaces
In cases where an employee works for an employer at multiple locations (such as the headquarters, branches, business locations, or other sites), the application form for a WP must list all of these locations in full. If these locations span different provinces or cities, within 3 working days from the commencement of the work, the employer is obligated to report to MOLISA and DOLISA in the areas where the employee works, as per legal regulations. This raises a question for professions that can work remotely: is it necessary to declare every work location? MOLISA previously responded that there is “no provision allowing foreign labours in Vietnam to work at a location not specified in the issued WP” which may simultaneously impact the content of the labour contract that the worker signs with the employer regarding the work location.
The Work Permit renewal process is simplified
Under the previous regulations, only one extension of the Work Permit was permitted, and subsequent applications were treated as new, necessitating the submission of all documents as if it were a new application. However, the updated regulations have simplified this process somewhat. After one extension, if an employee wishes to continue in the same role, the re-application process is less cumbersome compared to a new application, with the omission of Criminal Records and experience proof documents. This is a significant improvement in the overall renewal process.
Vietnamese authorities have introduced a significant change with the new Decree 70, which allows for adjustments to the Work Permit in instances where the company changes its name but retains its company code, without necessitating a complete reissue. Furthermore, there is no need to resubmit Step 1 for Work Permit adjustments.
Closing notes
Overall, we perceive the new regulations as progressive and more user-friendly in terms of Work Permit and Work Permit Exemption processes. However, the job posting process may present additional challenges. There is also an element of uncertainty regarding how the authorities might interpret the law differently or introduce other implicit regulations or rules.
We advise investors in Vietnam to peruse the specific provisions of Decree 70 and evaluate their impact on the procedures they put in place for hiring and onboarding foreign experts into their organsiations, to ensure they are aware of all the relevant updates and understand how these related to their specific plans.
The information provided above is general in nature and is intended to provide a practical framework for understanding the new regulations on Work Permits and WP Exemptions for foreign experts in Vietnam. As legal regulations are constantly being updated, organisations are advised to seek expert advice on the regulations and conditions before commencing the application processes.
If you need any assistance with these or any other matters in managing Work Permits procedures in Vietnam, to ensure you are compliant and protected in the market, our experts are ready to support.
Vu Tran Xuan Hoang – Associate, Market Entry and Licensing – hoang.vu@acclime.com
Tran Thi Thuy Duong – Senior Associate, Market Entry and Licensing – duong.tran@acclime.com
Matthew Lourey – Managing Partner – m.lourey@acclime.com
