January 07, 2021

[Legislative updates] Decree 152/2020/ND-CP on foreign workers in Vietnam and the recruitment and management of Vietnamese workers of foreign organizations and foreign individuals in Vietnam

I. INTRODUCTION
On 30 December 2020, the Government issued Decree 152/2020/ND-CP regulating the management of foreign workers in Vietnam and the recruitment and management of Vietnamese working for foreign organisations and individuals in Vietnam (Decree 152). The Decree will come into effect on 15 February 2020.
 

II. OVERVIEW & SCOPE
This Decree regulates foreign employees working in Vietnam as well as the recruitment and management of Vietnamese working for foreign organisations and individuals in Vietnam following the provisions of the revised Labour Code. It specifically deals with the conditions and procedures for issuance, re-issuance and extension, withdrawal of work permit and confirmation letter in cases where foreign employees are exempted from having a work permit under Article 157 of the Labour Code and under Clauses 1, 2 and 9 of Article 154 of the Labour Code. It also covers the recruitment and management of Vietnamese employees working for foreign organisations and individuals under Clause 3, Article 150 of the Labour Code.
 

III. REGULATED SUBJECTS
Six subjects will be affected, in which subjects (1), (2) and (3) will have their own sub-categories. Thus, it is important to keep up-to-date on each category for your human resources planning:

1. Workers who are foreign citizens moving to Vietnam for employment (foreign workers) for the purpose of:
   

a. Executing labour contracts;
b. Intra-corporate transferees;
c. Performing various types of contracts or agreements on economic, commercial, financial, banking, insurance, scientific and technical, cultural, sports, education, vocational education, and health;
d. Providing services under contracts;;
dd. Offering services;
e. Working for foreign non-governmental organisations, international organizations in Vietnam licensed to operate under the provisions of Vietnamese law;
f. Working as volunteers;
g. Taking charge of  establishing the commercial presence;
h. Managers, executive directors, experts, technicians;
i. Participate in the execution of bid contracts and projects in Vietnam;
j. Relatives of employees of foreign representative missions in Vietnam who are permitted to work in Vietnam pursuant to international treaties to which the Socialist Republic of Vietnam is a party. (New regulation)
    
The Decree also re-defines the definition of “Foreign Expert” as follows:
    

a. Having a bachelor's degree or higher or equivalent and have at least 3 years of experience working in the trained field relevant to the job position the foreign worker is expected to work for in Vietnam;
b. Having at least 5 years of experience and practice certificate relevant to the job the foreign worker is expected to work in Vietnam;
c. Special cases decided by the Prime Minister at the request of the Ministry of Labour, War Invalids and Social Affairs.
 

2. Employers of foreign workers
3. Foreign organisations in Vietnam
4. Foreign individuals in Vietnam
5.Vietnamese employees working for foreign organisations and individuals in Vietnam.
6. Employment service organisations and labour leasing enterprises providing recruitment, introduction and management services to foreign organisations and individuals in Vietnam or Vietnamese employees working for foreign organizations and individuals in Vietnam. (new provision)
    
Compared to the prevailing Decree 11/2016/ND-CP and Decree 75/2014/ND-CP, the newly-issued Decree 152 has added new regulated entity under Article 2.6.

IV. OVERALL INTRODUCTION ABOUT THE DECREE
Decree 152 updates the types of foreign employees exempted from having a work-permit as follows:

The owner or capital contributor of a limited liability company with a capital contribution value of 3 billion VND or more. (new provision)

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. (according to the old regulations, the employee only needs to be a member of the Board of Directors of a joint stock company)

Volunteers who are foreign workers working in Vietnam voluntarily and unpaid to implement international treaties to which the Socialist Republic of Vietnam is a signatory and certified by the agency. Foreign diplomatic representative or international organization in Vietnam. (Clause 2, Article 3 of Decree 152/2020/ND-CP)

Entering Vietnam to work at the position of a manager, executive director, expert or technical employee for a working time of less than 30 days and not more than 3 times a year.

The person responsible for establishing a commercial presence. (New regulation)

Foreign workers entering Vietnam are certified by the Ministry of Education and Training to teach and research. (New regulation)

Foreigners married to a Vietnamese citizen and living in the territory of Vietnam. (New regulation)

Relatives of members of foreign representative missions in Vietnam specified at Point l, Clause 1, Article 2 of Decree 152/2020 / ND-CP.

To be sent to Vietnam by competent foreign agencies or organizations to teach and research at international schools under the management of foreign diplomatic missions or the United Nations; establishments and organizations established under the agreements that Vietnam has signed and acceded to.

Intra-business transferees within 11 service sectors in Vietnam's schedule of service commitments with the World Trade Organization, including: business, information, construction, distribution, education, school, finance, health, tourism, entertainment and culture.

To be licensed by the Ministry of Foreign Affairs to operate information and press in Vietnam in accordance with the law.

Students who are studying at overseas schools and training institutions with internship agreements in agencies, organizations and enterprises in Vietnam; trainees and apprentices on Vietnamese ships (new provision which was not included in Decree 11:)

Having official passports to work for state agencies, political organisations, socio-political organisations.

Entering Vietnam to implement international agreements signed by agencies or organizations at the central or provincial level in accordance with the law.

Regarding the procedure for employers, the Decree requires at least 30 days’ notice in advance from the expected date of employing foreign workers. Employers (except contractors) are responsible for determining a demand for foreign workers for each position that Vietnamese workers have not yet met and report to the Ministry of Labour, War Invalids and Social Affairs (MOLISA) or the People's Committees of provinces or centrally-run cities (provincial-level People's Committees) where the foreign worker is expected to work. During the implementation process, if there is a change in the demand for foreign workers, the employer must report to MOLISA or the provincial People's Committee at least 30 days in advance from the expected start date of employing foreign workers.
   

V. EXTENSION OF WORK PERMIT

For cases of work permits, the duration of the work permit does not exceed 2 years. In case of work permit renewal, the duration of the renewed is equal to the period of the issued work permit minus the time the foreign worker has worked up to the time of application for issuance of the permit. The license is extended once with a maximum term of 2 years.
   
The new extension has to be made at least 5 days before the expiry date but not exceeding 45 days. The conditions are that the employee has to have documents proving that he/she will continue to work for the employer as per the issued work permit and approval from competent authorities. The dossier should be submitted to MOLISA or the DOLISA that previously issued the work permit. Within 5 working days, the authorities shall issue the extension of the work permit or, in case of denial, provide the written explanation.

Decree 152 does not clearly indicate the guidance for foreign workers continuing to work in Vietnam beyond a 4-year period. Nevertheless, during EuroCham’s ACAPR dialogue in June 2020 in Hanoi and discussion with MOLISA, the overall spirit was that foreigners can apply for a new work permit after 4 years (2 years for the issuance of new work permit + 2 years for the extended work permit). During the drafting period of the Decree, EuroCham’s Human Resources and Training Sector Committee, with support from other Sector Committees and HR Working Group under the Vietnam Business Forum, played an active role in providing comments and recommendations based on our expertise and international practice to MOLISA. As a result, many positive developments of the draft which benefits foreign workers in Vietnam was witnessed. Some highlighted developments are:

The economic organisations which have the foreign-invested capital of 51% or more of the charter capital are no longer required to recruit Vietnamese employees via authorised intermediary organisations compared to the draft;

Foreign organisations are now allowed to directly recruit employees or recruit through job service centers, labour leasing enterprises or competent organisations. This is instead of being required to request an authorised intermediary organisation (normally job service centers) when using Vietnamese employees and only being allowed to directly recruit Vietnamese employees if the authorised organisation is not able to find any suitable Vietnamese employee 15 days from the receipt of a request in the draft.

Experts, managers, executives or technical workers entering Vietnam are work permit exempted for a working period of less than 30 days but less than 3 times per year, compared to 20 days in the draft.

The period of validity of the passport no longer affects the validity period of a work permit compared to the draft.

EuroCham and our Human Resources and Training Sector Committee will continue to monitor the implementation of Decree 152 and work closely with MOLISA and other relevant stakeholders to seek further guidance, especially on the procedure of work permit extension after 4 years in the upcoming time.
 

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