There are different ways to recruit and hire high-quality employees in Vietnam that companies can use if they have been formally established. Due to some existing problems that are common when employing Vietnamese employees, many companies employ foreigners to occupy certain positions.
A Vietnamese company is allowed to hire foreigners to work as managers, executive directors, experts, and skilled labor where local job seekers are not able to meet production and business requirements. Vietnamese representative offices are also able to hire staff directly; such is not the case in some other Asian countries such as China.
Typically, at the beginning of the year employers will determine the demand for foreign workers for each position lacking capable Vietnamese workers. They then send a report on the findings to the President of the People’s Committee of the province or where the head office of the employee is situated to secure a written approval. A written approval is required before an employer can employ a foreigner to fill a vacancy in the company. During the process, any change in the labor demand for foreign workers should be reported to the President of the People’s Committee of the province. The President will issue written approval to the employer for the employment of foreign workers for each position.
The employer company is required to get approval for the employment of foreign employees in each position before official recruitment. The required approval occurs 30 for 40 days from the date of application by the President of the People’s Committee of the province and is included in the application dossiers of the work permit, which in turn has to be submitted within 15 working days before the foreigner is to begin work in Vietnam.
Another common procedure is that of outsourcing the recruitment and hiring process to a third party. Outsourcing helps companies in Vietnam to introduce their company to the public job market and attract a significant number of job seekers from within Vietnam and abroad alike. These third parties are often referred to as recruitment agencies and there is an ample number of them operating in Vietnam. They allow companies to avoid the frustration of searching for competent job seekers in Vietnam or foreign countries. Companies outsource the recruitment and hiring process to recruitment agencies who in turn take to social media and their websites to advertise the vacancy.
Job seekers have the opportunity to apply to available jobs as long as they meet the requirements. The recruitment agencies will usually display the criteria for the available positions and request that the job seekers submit their CVs. Most of these agencies are located in Ho Chi Minh City, but others are located in other cities of Vietnam.
How a Foreign Company May Hire Vietnamese Employees. The steps involved in hiring a Vietnamese employer by a foreign company are different from those of the typical hiring process. There are four steps a foreign company must take to employ a Vietnamese job seeker.
A written request needs to be submitted by foreign employers to Vietnamese employee recruitment agencies before they can hire Vietnamese employees. These agencies will submit such requests to governmental agencies and expect a reply in 20 days. Upon receipt of a successful reply, agencies are required to post a given entity’s information to the public after 10 days.
Within 15 working days of posting information, authorized agencies must select the appropriate Vietnamese employees and present them to the foreign employer. Foreign organizations or individuals in Vietnam are eligible to recruit Vietnamese employees without the use of a recruiter if authorized agencies fail to do so within the time limit. Upon the signing of the labor contract with the Vietnamese employee, foreign employers must inform in writing and enclose a copy of the labor contract to Vietnamese employee recruiting agencies within seven working days.
Foreign employers must provide biannual, annual, or unscheduled reports upon request concerning the recruitment of Vietnamese employees to Vietnamese employee recruiting agencies and other appropriate governmental bodies. A company can recruit foreigners only if the vacant position requires specific skills that are not found locally. As the need for foreign employees has to be justified, companies are not allowed to bring in foreigners for positions that can be occupied by locals.
That being said, it is not difficult to substantiate the need for a skilled foreign employee. For example, having many English-speaking clients is a sufficient reason for hiring an English-speaking foreigner. Requirements for Employing Foreign Workers in Vietnam. As has been mentioned, Vietnamese companies need a reason for hiring a foreign national instead of a local employee. Hiring foreign workers is justified if the position has some specific requirements that cannot be found in Vietnam. For example, those who need an employee with proficiency in a particular language, technical skills which might not be available in Vietnam, or specific international experience, a foreigner might have to be hired.
The submission of a foreign labor use report and a reason for hiring are enough when hiring foreign employees. No extra documents are required. However, the report is to be submitted 30 days before the expected start of employment or earlier. A work permit is required for a foreigner who wishes to work in Vietnam and the permit must be applied for at the local Labor Department. Besides the work permit, the foreigner will need to have a residence permit and business visa to legally stay in Vietnam while employed there.
Unlike many other countries, Vietnamese permits such as visa exemptions, business visas, and resident cards are not sufficient to provide foreigners with any automatic rights to work in Vietnam. Instead, according to the Labor Code of Vietnam, a work permit is required for each foreign individual before the foreign individual can be rightfully employed in Vietnam.
A work permit is mandatory for foreigners who work in Vietnam for more than three months. This permit is valid for up to 12 months and can be renewed afterwards. Work permits may not be needed for contracts or employment of less than three months. To get the work permit, the foreign employee is expected to have higher education and sufficient work experience in the relevant field.
The work experience requirement for employees working as executives in a managerial position is three years. For non-managerial positions, a Master of Business Administration degree or a similar document would also be able to substitute if the executive does not have enough work experience.
Concerning directors, one year of experience in the field usually suffices. For investors, a work permit is not required according to Vietnamese law.
The problem that often surfaces with regard to work experience is that candidates do not have any documentation to evince their previous work experience. It is important that the previous employer confirms that the employee has had work experience prior to this period. A suitable document would be an employment record book or an experience letter.
The application process for a work permit begins when employers submit a foreign labor use report 30 days before the employee starts working. Employers then submit a work permit application dossier. This will usually take about 15 to 30 days to be assessed, depending if the application is rejected or accepted. If a work permit application is rejected, employers need to submit additional documents required by the authority; if the application is accepted, a work permit will be issued. Once the process has been completed, the employee will then be legally employed and can start working.
Conversely, if there is need for a work permit for a particular job position, failure to obtain a work permit for the employee in question is illegal and the penalty will be borne by both the illegal foreign worker and the employers. The illegal foreign worker will be deported and the employers will also be subject to a penalty as prescribed by the Vietnamese law.
The acquisition of a work permit lets one apply for a temporary resident card. One can request to receive it after receiving the work permit; it is valid for the same duration as the work permit.
There is no need to acquire a work permit if the foreigner’s employment in Vietnam lasts less than three months. In such a case, holding a business visa is enough. However, sponsorship or an invitation letter from a business partner in Vietnam is required. It is a convenient option for those who are staying in Vietnam for a relatively short time.
Vietnamese Employment Law and Recruitment
Helping to elucidate regulations on recruitment agencies in Vietnam are several pieces of legislation that have been issued over the past several years – all of which guide or direct the implementation of Vietnam’s current labor code.
Decree No. 75/2014/ND-CP is the main piece of legislation that should be referenced because it details the implementation of various articles of the Labor Code with regard to recruitment and management of Vietnamese employees by foreign organizations within Vietnam. The scope of this decree spans the recruitment, employment, and management of Vietnamese employees by their foreign counterparts. In recent times, Decree No. 75 has been supported by further information issued under Circular No. 16/2015/TT-BLDTBXH.
Basic contractual law and enterprise, or corporate, law provisions may also govern certain matters. Vietnamese labor laws are also applied when Vietnamese companies send their employees to work abroad as per the Law on Sending Vietnamese Laborers to Work Overseas. Due to difficulties associated with hiring Vietnamese job seekers, most companies in Vietnam often hire staff from abroad after having followed the specified rules. Some of these difficulties are the high rate of job turnover, emigration of the workforce to other nations, lack of English and technical skills, and difficulty in relocation.
Although existing employees can be trained to acquire a skillset in order to meet the demands of the business, doing so often takes much longer and tends to be costly. If a company in Vietnam would like to recruit foreigners as their employees or partners, it needs to follow certain official processes in order to comply with the Vietnamese laws which are not needed in hiring a local.
Taxes Imposed on Foreign Employees in Vietnam
Employers have the responsibility to register all employees at the tax revenue department once employees are hired. Foreign residents in Vietnam are subject to a progressive income tax ranging from 5% to 35%. However, both foreign employees and employers alike are responsible for the health insurance tax (3% from the employer and 1.5% of the employee’s salary). In addition, the employer will also need to pay the social insurance tax (3.5%) and trade union fee (2%).