New decree on foreign employees working in Vietnam

On September 18, 2023, the Government issued Decree No. 70/2023/ND-CP ("Decree 70") amending and supplementing certain provisions of Decree No. 152/2020/ND-CP on Foreign Workers Working in Vietnam and on the Recruitment and Management of Vietnamese Workers Working for Foreign Employers in Vietnam ("Decree 152"). Decree 70 came into force immediately after its date of issuance.

Highlighted Amendments to the Regulations on Work Permits

THE CONDITIONS FOR ISSUING WORK PERMITS FOR "EXPERTS" AND "TECHNICAL WORKERS" HAVE BEEN RELAXED

Decree 70 no longer requires foreign experts and technical workers to have training appropriate to their job in order to obtain a work permit.

Instead:

Foreign experts are eligible for a work permit if they have a bachelor's degree or equivalent or higher qualification and at least three years of work experience consistent with the position they wish to hold in Vietnam;
Foreign professionals can obtain a work permit if they have completed at least one year of training and have at least three years of work experience consistent with the position they wish to hold in Vietnam.

Instead of relying solely on the confirmation letter from a foreign company, employers can now use previously issued work permits or work permit exemption certificates to verify the experience of foreign workers for work assignments.

CLARIFICATION OF THE DEFINITION OF THE POSITION OF "MANAGING DIRECTOR"

"Business managers" are now defined as:

Persons who are the head of a branch, representative office or subsidiary of a company; and
persons who manage and directly executively operate at least one division of a company and who are subject to the direction and management of the head of the company.

Decree 70 also provides a clear list of documents evidencing a foreign employee's position as manager or director, including: (i) the company's articles of association, (ii) the company's registration certificate or establishment resolution or other equivalent documents, and (iii) the company's resolution or appointment resolution.

THE PERMITTED DOCUMENT FORMATS ARE EXTENDED

A certified copy of a foreign employee's passport that has been notarized by the employer is now recognized as an alternative to a notarized copy of the document. In this regard, foreign employees can apply for a work permit abroad before traveling to Vietnam to work instead of coming to Vietnam and submitting their original passport for notarization. This allows for the employer to submit the work permit application ahead of time.

Foreign labor as spouse of a Vietnamese citizens shall be subject to a work permit exemption certificate

Previously, Decree 152 stipulated that when employing foreigners who are married to Vietnamese nationals, the employer only needs to report information about these foreign workers to the Ministry of Labor, Invalids and Social Affairs (MOLISA) and the relevant provincial DOLISA.

According to Decree 70, these foreign employees must obtain a certificate of exemption from the work permit, which has a maximum validity period of 2 years.

Authority to grant work permits.

MOLISA issues work permits (and is responsible for all work permit related matters) for foreign employees working for organizations that may be established by the government, the Prime Minister, ministries, ministerial level agencies or government agencies. These organizations include, for example, companies operating in the banking or insurance sectors.

Furthermore, MOLISA shall grant work permits for a foreign employee working for an employer in a variety of provinces/municipalities.

The provincial DOLISA shall grant work permits (and have governing authority over all work permit related matters) in other cases which do not fall under the governing authority of the MOLISA.

The management board of industrial zones or economic zones no longer have the authority to grant work permits/work permit exemption certificates to foreign employees working therein.

Other significant amendments to Decree 70

ADDITION TO THE REQUIREMENT REGARDING THE PLACE OF WORK OF FOREIGN WORKERS

If the foreign workers are employed at several locations, the companies must list all workplaces of the foreign workers in their written application for a work permit.

If these locations are in different provinces or cities, the employer must inform both the MOLISA and the DOLISA of the province within 3 days of the start of work of these workers.

Requirement to notify the hiring of Vietnamese workers.

Employers are required to notify the hiring of Vietnamese workers for the jobs for which they intend to hire foreign workers. This must be done through the MOLISA portal or the employment centers of the provincial People's Committee at least 15 days before submitting the application documents for the approval of the employment of foreign workers.

Although this Decree 70 came into effect immediately with its issue date of September 18, 2023, this job posting requirement will only enter into effect as of 1 January, 2024.

Report on the deployment of foreign workers

Decree 70 also revised the format of the periodic report on the deployment of foreign workers that employers must submit to MOLISA and/or DOLISA on a regular basis.

Our Comments

Following the adoption of Decree 70, employers are advised to review their mobility and recruitment strategies in order to adapt them to the amended legislation. It should also be noted that due to the novelty of Decree 70, there may be different interpretations by local labor administration authorities until a complete, standardized regulation is reached at all administrative levels.