At the 16th Whitebook launch, EuroCham outlined 5 overarching Must-Win Battles for Vietnam, shaped by insights from our 19 Sector Committees and 1,400-member business community.
Priority #3: Improving Work Permit Policies for Foreign Workers
The Challenge: Currently, work permits for foreign workers bear impractical conditions. For example, an expert with 25 years of experience in Logistics might need 6 months to get a work permit in Vietnam simply because his degrees were in Biology instead of Logistics. Under normal circumstances, it takes 1.5 to 2 months to get a work permit for foreign workers in Vietnam.
Positive Signal: EuroCham welcomes Prime Minister’s Directive 22/CĐ-TTg dated 9 March 2025. Particularly impactful is the directive assigning the Ministry of Home Affairs to propose measures to improve work permit policies for foreign workers in a more open, business-friendly, and efficient manner.
The above is a timely signal:
According to EuroCham’s Q1 2025 Business Confidence Index (BCI), 24% of businesses surveyed identify reduction of visa and work permit difficulties for foreign experts as the most important factor to improve Vietnam’s ability to attract FDI. This has been a consistent issue for the European Business Community in Vietnam.
To improve availability & access to skilled labour and to increase Vietnam’s attractiveness as an FDI destination, EuroCham Vietnam suggests:
- Delegating work permit issuance to the local Departments of Home Affairs where businesses are headquartered;
- Simplifying the pre-approval process for hiring foreign workers – dropping requirement for job postings & approval of labour demand; and
- Ensuring uniform implementation of legal regulations across provinces and cities to prevent inconsistencies in interpretation and enforcement
Priority #4: Accelerating VAT Refund
Foreign-invested businesses in Vietnam struggle with delays and complications in Value-Added Tax (VAT) refund, which hinders their cash flow and operations. Key obstacles include:
- Unclear regulations
- Lengthy invoice verification procedures
- Extensive documentation required, particularly for construction and export related refunds
- Inconsistencies in tax authorities’ interpretations
In theory, the VAT refund process for businesses should take 6 to 40 days. However, EuroCham’s Business Confidence Index (BCI) Q1 2025 shows that only 4% of businesses surveyed received a VAT refund within 1 month after submission. In reality, a majority of respondents reported delays: 19% waited 1-3 months, while 16% faced waiting periods of 6-12 months. Consequently, 41% of surveyed European businesses operating in Vietnam occasionally or frequently faced difficulties with the VAT refund process.
As Vietnam rises on the global investment map, efficient tax administration will be vital for building investor trust and driving sustainable economic growth. VAT refunds should be a streamlined and predictable process, designed to ease cash flow cycles, allowing investors to reconcile their accounts more quickly and reinvest in expanding their operations. To this end, EuroCham Vietnam suggests:
- Accelerating VAT refunds;
- Streamlining procedures and;
- Synchronising guidance
EuroCham Vietnam remains committed to accompanying Vietnam’s era of the nation’s rise, providing data-backed insights and policy consultations.
For more information, read our 16th Whitebook and Q1 2025 BCI report.
