Laws In Vietnam: Expats Need To Know

Every nation has its own sets of rules and laws, and while the majority of them exist to prevent the nation from devolving into anarchy, there are some that are quite dubious. This also applies to Vietnam, which has several laws that are comparable to those in most other nations but also a few that may appear peculiar to others. Together, let's find out.

I. Declare the temporary residence of foreigners

When a foreigner is already required to get a "visa" and a "temporary residency card," why is there a requirement to "declare the temporary residence of foreigners"?

A foreigner who enters Vietnam must get a visa or temporary residence card in order to live there legally. They must also report their temporary residency at a public security office in the commune, ward, or town where they are staying. This comprises lodging options for tourists, inns, housing for foreigners living, working, or studying in Vietnam, as well as private homes and other establishments together referred to as "Accommodation Facilities." The declaration must be submitted between 12 and 24 hours (depending on the region) after the foreign visitor checks into the lodging facility.

The representative of the lodging establishment, an authorized person, or anybody in charge of directly managing or administering the lodging establishment is responsible for declaring the foreigner's temporary residence. The party to the long-term lease contract or purchase of house contract is responsible for declaring the temporary residence of the foreigner residing at such Accommodation Facility (hereafter referred to as the "Host") if the foreigner rents the Accommodation Facility for long-term residence without the Host living there or if the foreigner purchases a private house.

In spite of the Host's need to undertake the declaration, it is important to remember that if the foreigner's temporary home is not disclosed, various administrative processes involving the foreigner would be impacted. This is due to the fact that a valid Declaration Form of Temporary Residence confirmed by the appropriate public security is one of the mandatory papers for many significant administrative operations. Examples include:

- How a visa or temporary residency card is issued;

- How foreigners in Vietnam can get a criminal record certificate;

- The steps for awarding a foreign worker a work permit in the case of getting a Vietnamese criminal record certificate (in case of having no a Criminal Record Certificate granted by a foreign country).

Both the Host and the Foreigner may face administrative penalties for failing to adhere to the declaration rules for lodging facilities; in particular, the Foreigner may face expulsion from Vietnam. Foreigners should thus discuss this matter with their Host in order to immediately satisfy the declaration requirement and prevent any disruption of business.

II. Important Legal Implications for Foreign Workers in Vietnam

1. Can a foreign worker enter a labor agreement with an endless term?

Article 22, the 2012 Labor Code provides 03 types of labor contracts as follows:

- Indefinite term labor contracts;

- Fixed-term labor contracts with a duration of 12 months to 36 months; and;

- Labor contracts for a specific or seasonal job with a duration of less than 12 months. This type of labor contract does not apply to a job which is normally performed in 12 months or more, except in cases where it requires temporary replacement of employees under military service, taking maternity leave, suffering from sickness or occupational accidents, or taking other temporary leave.

However, it should be noted that a work permit may only be valid for a maximum of two years (Article 11 of Decree No. 11/2016/ND-CP). Therefore, instead of the three years specified in Article 22 of the 2012 Labor Code, firms may only engage into a fixed-term employment agreement with the foreign employee for a maximum period of two years. Instead of signing an indefinite term labor contract as required by labor law after 02 times of signing a fixed-term labor contract, both parties must sign another fixed-term labor contract. This indicates that foreign employees are exempt from the regulations regarding different forms of labor contracts.

2. Is it legal for a foreigner to work in Vietnam if they accept a job offer while visiting there?

In theory, a work visa must first be obtained by a foreigner before they may work in Vietnam. The foreigner must still get a work permit even if they are in Vietnam on a visitor's visa and are given an employment offer there. A work permit for a foreign national with a visitor visa is a possibility, right?

In the application file for giving a foreigner a work permit, there is currently no information stating which kind of visa is required. The Ho Chi Minh City Department of Labor, Invalids and Social Affairs and the Ho Chi Minh City Export Processing and Industrial Zones, two organizations in charge of licensing, vouch for the fact that foreigners on visiting visas can be given a work permit. Thought should be given to the following matters:

- Despite having been issued a work visa, working is not permitted.

A foreigner who has a work permit is permitted to work in Vietnam in accordance with labor laws. A foreigner on a visitor visa is not, however, permitted to stay in Vietnam for any purpose other than visiting or tourism, as per the laws governing foreigners' entry, leave, and residency in Vietnam. Foreigners must thus get the correct sort of visa in line with their employment status in order to lawfully operate in Vietnam.

- To switch their type of visa, foreigners must leave Vietnam.

A visa issued for a specified purpose cannot be altered in accordance with the terms of the 2014 Law on entrance, departure, transit, and residency of foreigners in Vietnam. This implies that a foreign national with a visiting visa who wants to switch to a work visa must leave Vietnam first before submitting an application for a work visa. While the foreigner is still in Vietnam, the visa cannot be modified.

- If a foreign national is in possession of a guest visa, they will not be awarded a temporary residence card.

The 2014 Law on Foreigners' Entry, Exit, Transit, and Residence in Vietnam states in Article 36.2 that “foreigners granted visas categorized as LV1, LV2, DT, NN1, NN2, DH, PV1, LD, or TT shall be granted temporary residence cards with categories similar to visa categories”. Accordingly, foreigners holding a visitor visa (with category of DL) shall not be granted a temporary residence card.

III. Vietnam’s New Labor Law

In an effort to balance the interests of companies and employees, Vietnam's National Assembly recently amended the country's labor laws. Employers and employees now interact differently as a result of the Labor Code 2019, which took effect on January 1, 2021. We explained the main rules of the code in an earlier piece. We discuss the effects on foreigners who work in Vietnam in this article.

1. Foreigners' work requirements

The 2019 New Labor Code updates and adds to the legal requirements for foreign workers in Vietnam. Worker requirements have changed to include being 18 years of age or older, having full legal capacity, possessing professional credentials, methods, job skills, and work experience, as well as being in good health by the criteria stipulated by the Minister of Health. They should not be in prison, have had a crime expunged from their record, or be under investigation for a crime under foreign or Vietnamese law. Except in cases where they are excluded, they need to get a work permit.

2. Absences from work permits

Unless they are explicitly excused, all foreigners must possess a work permit before beginning any employment in Vietnam. There are exceptions for:

- Members or shareholders of a limited liability business who contribute capital must do so in an amount equal to or more than the minimum required by law (currently VND 1 billion/USD 43,000).

- Individuals who serve on the boards of directors of joint stock companies and make capital contributions in accordance with legal requirements.

- Representatives' offices' directors.

- Those coming to Vietnam for less than three months in order to carry out marketing tasks.

- Those traveling to Vietnam for a brief period of time—less than three months—to address a challenging technical or technological problem that will have an impact on their commercial operations and cannot be handled by Vietnamese or by any other international specialists already present in Vietnam. For these to be made accessible, employers must notify the Vietnamese government at least three days before the anticipated first day of employment.

- A non-Vietnamese lawyer who has been authorized to practice law in Vietnam.

- A foreign national designated in a global agreement Vietnam has ratified.

- A foreign worker residing in Vietnam with their Vietnamese spouse.

3. Contracts for labor with foreign workers

- In Vietnam, a labor contract cannot last longer than the duration of the work visa.

- In Vietnam, there are numerous fixed-term employment agreements that can be made.

- A labor contract's maximum duration for foreign workers in Vietnam is two years.

- There is no such thing as an indefinite-term contract for international workers.

IV. Laws in Vietnam: Tax

The personal income tax (PIT)'s for international workers in Vietnam requires deciphering a number of laws. The precise obligation and any necessary deductions must then be calculated for international employees.

Individuals can reduce their tax exposure by consulting with a local tax expert, and companies may be able to find more attractive wage structures with the aid of an advisor. Following an overview of the fundamentals of PIT, we'll go through tax-exempt earnings (benefits from employment that are not subject to PIT) and dependent tax breaks.

1. Residence and exposure to PIT

The Personal Income Tax Law of Vietnam recognizes 10 different types of income, each of which is subject to a variety of different exemptions, tax rates, and deductions.

A person who lives in Vietnam for 183 days or more in either the calendar year or a period of 12 straight months from the date of arrival is considered to be a tax resident.

No matter where the money is generated or paid, tax residents are liable to PIT at progressive rates ranging from 5% to a maximum of 35% on their worldwide work income. Non-resident taxpayers who receive income from Vietnam are liable to PIT at a flat rate of 20%.

A typical monthly compensation package in Vietnam will typically consist of a gross wage plus the legally required social security. After subtracting the required social insurance contributions, PIT is assessed on the remaining amount. At the start of the year, businesses do PIT finalization on behalf of their employees for taxable income from the prior year.

2. Tax exempt status

In Vietnam, some job perks may not be subject to taxation for foreign nationals. These exceptions consist of:

- Foreigners who migrate to Vietnam will get a one-time relocation stipend;

- Round-trip flights funded by companies once a year for foreign workers on vacation;

- Employers pay general education tuition or school fees for children of expats enrolled in Vietnamese schools.

Other benefits may also be considered non-taxable income if specific criteria are satisfied. These consist of:

- Housing expenditures for employees that are greater than 15% of all taxable income (housing benefits from employers excluded);

- The cost of a group of employees' transportation to and from work;

- Training costs for staff members who are interested in their professions or who are following a strategy set forth by their employers;

- If the employers personally arrange such meals for their employees, mid-shift meal allowances;

- If the sums are within the ranges specified by the applicable rules, presumed expenses for telephone, stationery, per diem, working attire, etc. are not taxed.

V. Every expats in Vietnam must know the following laws

For a license to start a business, you need money.

That goes without saying for all firms, of course, but we're not just discussing startup money here. Vietnamese legislation stipulates that you must have at least US$30,000 in your bank account before you can apply for a license to open a business.

However, given that start-ups and internet merchants often don't require as much capital to get started, this will be a significant problem for them. Nevertheless, the situation is what it is. It's true that some people launch their businesses before signing up and just pay after they have the necessary funds, but doing so is dangerous. You're in danger with nothing more than an envious business rival.

To get advice on what to do and, if feasible, speak with a CEO in the same industry about his or her experience, it is strongly advised that you get in touch with a lawyer who is knowledgeable about Vietnamese legislation while developing your business.

Land cannot be purchased, only property.

You are permitted to purchase a house in Vietnam but not the land. The land would not be yours and you would have to lease it, but you could still pursue your ambition of purchasing a home or palace. In Vietnam, a land lease can be renewed without an increase in rent once it expires after a maximum of 50 years. In other words, you may lease the land and still own the property, but not the land itself.

It's prohibited to overwork oneself.

You are not permitted to work more than 48 hours a week for one employer in Vietnam, under the 2013-introduced Labor Code. This equates to a limit of 8 hours per day without receiving payment for overtime, or a maximum of 10 hours per day if you don't work every day.

18 is the Legal Drinking Age.

The purpose of this post is to dispel any misconceptions regarding Vietnam's legal drinking age. It is 18 really.

Be aware of the probationary period.

Speaking of employment, if you've recently begun a new position, your probationary period cannot exceed 30 days of employment for a position requiring professional or vocational qualifications, 60 days of employment for a position requiring a college degree or higher, and just six days for all other cases.

A minimum of 85% of the official salary for that employment will be paid to you.

Gambling is prohibited.

In Vietnam, gambling is prohibited outside of officially recognized casinos. Anyone discovered in violation of this legislation will be punished severely with fines and/or lengthy prison terms. Foreign passport holders are the only ones who are permitted entry into casinos with licenses.

You may perhaps spend that money on less illicit activities.

Don't bring any pornography with you.

Pornography itself, including its creation, dissemination, and possession, are all prohibited in Vietnam, hence it is unlawful to bring pornographic materials into this nation. The severity of the penalties, which range from fines to incarceration, and the enforcement of this rule truly depend on your luck. To be on the safe side, it's preferable to avoid carrying questionable DVDs with you when you're out and about. Pornography undermines traditional Vietnamese values, according to the justification for this regulation.

The Export of Antiquities is Prohibited.

Your best line of action, if you truly like that vase and can already envision it in your living room back home, is to go to the ministry to obtain additional guidance on what you can do as it is prohibited to export antiquities from Vietnam without permission.

Despite being in Vietnam, never use drugs.

A person found in possession of even a tiny quantity of heroin may get the death penalty in Vietnam, according to the country's penal code. Vietnamese authorities have increasingly toughened their stance against drug-related offenses, and there are already foreigners in prison serving life terms for drug trafficking or facing the death penalty.

Entitlements to maternity leave.

In the event of pregnancy, you are eligible for up to six months of leave, with two of those months being required. You are allowed to take an additional month of leave for each additional kid you are carrying, and you will be paid 100% of your income during that period if you are.

No Drugs, No Weapons, No Used Car Parts,...

The following items are prohibited: illegal substances, weapons, ammunition, and explosives; military equipment; reactionary and "depraved" cultural products, such as T-shirts bearing beer brand logos; fireworks; second-hand consumer goods; second-hand electrical and electronic household appliances; items that could harm the environment; second-hand spare parts; waste and disposable materials; cash exceeding US$5,000 without declaration; and, no children’s toys that can detrimentally influence a child’s personality, education, social order, safety or disturb the peace.

However, you are only permitted to bring in a total of 400 cigarettes, 100 cigars, 500 grams of tobacco, 1.5 liters of alcohol (spirits) or less than 22 percent of volume, and a total of 2 liters of alcohol (below 22 percent of volume) (beers and wine).

Take Precautions When Shooting.

Please be aware that it is normally forbidden to take photos at or close to military sites for those of you who are interested in photography or who simply enjoy shooting images in general. Your camera could be taken away, and you might have to go through some difficult interrogation.

Taking photos while participating in demonstrations is another huge no-no. If you photograph a non-state-sanctioned gathering, you unknowingly place yourself in the position of participating in the demonstration, which may get you in significant problems, especially if you're a foreigner. We're talking about possible incarceration or deportation here. In order to avoid taking photographs of demonstrations, simply avoid them.

Stay Away from the Border Too Much.

It is forbidden for you to loiter close to military sites. A region near the border is included in the scope of this statute. Obtaining authorization from the provincial police department may be necessary if you want to go to a nearby hamlet, commune, or ward. Furthermore, make sure you always carry an ID that includes a photo of yourself. This is genuine legislation; it is not just a recommendation.

Vietnam's unwritten rule of social behavior.

Discussions of politics and religions are strongly discouraged in Vietnamese culture, as are public displays of affection, provocative attire, and nudity. Be cautious of these subjects since Vietnam is a one-party system with strong political doctrine and a religiously diverse population.

Legal issues may result from the dissemination of information or opinions hostile to the nation's political and cultural values.

In places of worship, avoid making loud noises, laughing, or pointing at anything deemed sacred.

Marrying a Vietnamese as an Expat.

You could fall in love with a wonderful Vietnamese native and decide to get married after living in Vietnam for a decent number of years. Aside from the customs of the Vietnamese wedding that you must learn, the legal process to get your marriage recognized by Vietnamese law is as important:

- Men aged 20 years or older, women 18 years or older can get married.

- To confirm the status, both parties must be single and possess credentials (affidavit of single status and a certificate of no marriage records).

- If you've been residing in Vietnam, you should submit applications for a marriage registration, a declaration of sound mental health, a biographical information sheet, a certified copy of your passport, and a TRC.

- The rights of the partners in homosexual marriage are presently not covered by any laws.