Vietnam: In what form will freelancers pay social insurance premiums? What is the time limit for processing initial registration for participation in voluntary social insurance?
In what form will freelancers in Vietnam pay social insurance premiums?
Pursuant to Article 2 of the Law on Social Insurance 2014 as follows:
Subjects of application
1. Employees being Vietnamese citizens shall be covered by compulsory social insurance, including:
a/ Persons working under indefinite-term labor contracts, definite-term labor contracts, seasonal labor contracts or contracts for given jobs with a term of between full 3 months and under 12 months, including also labor contracts signed between employers and at-law representatives of persons aged under 15 years in accordance with the labor law;
b/ Persons working under labor contracts with a term of between full 1 month and under 3 months;
c/ Cadres, civil servants and public employees;
d/ Defense workers, public security workers and persons doing other jobs in cipher organizations;
dd/ Officers and professional army men of the people's army; officers and professional non-commissioned officers and officers and technical non- commissioned officers of the people's public security; and persons engaged in cipher work and enjoying salaries like army men;
e/ Non-commissioned officers and soldiers of the people’s army; non- commissioned officers and soldiers on definite-term service in the people’s public security; army, public security and cipher cadets who are entitled to cost- of-living allowance;
g/ Vietnamese guest workers defined in the Law on Vietnamese Guest Workers;
h/ Salaried managers of enterprises and cooperatives;
i/ Part-time staffs in communes, wards and townships.
2. Employees who are foreign citizens working in Vietnam with work permits or practice certificates or practice licences granted by competent Vietnamese agencies shall be covered by compulsory social insurance under the Government’s regulations.
3. Employers covered by compulsory social insurance include state agencies, non-business units and people's armed forces units; political organizations, socio-political organizations, socio-politico-professional organizations, socio-professional organizations and other social organizations; foreign agencies and organizations, and international organizations operating in the Vietnamese territory; enterprises, cooperatives, individual business households, cooperative groups, and other organizations and individuals that hire or employ employees under labor contracts.
4. Persons covered by voluntary social insurance are Vietnamese citizens aged full 15 years or older and not defined in Clause 1 of this Article.
5. Agencies, organizations and individuals involved in social insurance.
The subjects defined in Clauses 1, 2 and 4 of this Article are below collectively referred to as employees.
Thus, according to the above regulations, there are two forms of social insurance payment: voluntary social insurance and compulsory social insurance, where:
- Compulsory social insurance is applicable to employees working under labor contracts of full 01 month or more, cadres, civil servants, public employees, and part-time staff in communes.
- Voluntary social insurance is applicable to Vietnamese citizens aged full 15 years or older and not subject to the social insurance payment.
Since the freelancers in Vietnam do not work as employees for any company, the parties will conclude service contracts instead of labor contracts.
Therefore, freelancers are not subject to compulsory social insurance. Freelancers in Vietnam can pay voluntary social insurance premiums.
What are the methods of paying voluntary social insurance premiums for freelancers in Vietnam?
Pursuant to Clause 2, Article 87 of the Law on Social Insurance 2014 as follows:
Levels and methods of payment by employees covered by voluntary social insurance
1. Employees defined in Clause 4, Article 2 of this Law shall monthly pay an amount equivalent to 22% of their monthly incomes as selected to the retirement and survivorship allowance fund; the monthly income on which social insurance premiums are based must at least equal the poverty threshold in rural areas and must not exceed 20 times the statutory pay rate.
The socio-economic development conditions and state budget capacity in each period shall be based on to determine the levels of support for payment of social insurance premiums for employees covered by voluntary social insurance, support beneficiaries, and the time for implementing the support policy.
2. Employees may select one of the following payment methods:
a/ Every month;
b/ Every 3 months;
c/ Every 6 months;
d/ Every 12 months;
d/ Lump-sum payment for many subsequent years at a level lower than the monthly payment or lump-sum payment for the insufficient years at a level higher than the monthly payment as specified in this Article.
3. The Government shall detail this Article.
Thus, freelancers in Vietnam can select one of the following methods of paying voluntary social insurance premiums:
- Every month;
- Every 3 months;
- Every 6 months;
- Every 12 months;
- Lump-sum payment for many subsequent years at a level lower than the monthly payment or lump-sum payment for the insufficient years at a level higher than the monthly payment
What is the time limit for processing initial registration for participation in voluntary social insurance in Vietnam?
Pursuant to Point b, Clause 3, Article 99 of the Law on Social Insurance 2014 as follows:
Settlement of registration for participation in social insurance and grant of social insurance books
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3. The social insurance agency shall grant a social insurance book within:
a/ 20 days after receiving a complete and valid dossier, for persons who participate for the first time in compulsory social insurance;
b/ 7 days after receiving a complete and valid dossier, for persons who participate for the first time in voluntary social insurance;
c/ 15 days after receiving a complete and valid dossier, in case of re-grant of social insurance books; or 45 days, if the verification of the period of social insurance premium payment is complicated. If refusing to grant a social insurance book, the social insurance agency shall issue a written reply clearly stating the reason;
d/ 10 days after receiving a complete and valid dossier, in case of re-grant of social insurance books for employees who wish to have their information of participation in social insurance adjusted. If refusing to re-grant a social insurance book, the social insurance agency shall issue a written reply clearly stating the reason.
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Thus, according to the above regulations, the time limit for processing initial registration for participation in voluntary social insurance in Vietnam is 07 days from the date of receipt of a complete dossier.
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