Are foreigners required to participate in social insurance in Vietnam?

Are foreigners required to participate in social insurance in Vietnam?

In Clause 1, Clause 2, Article 2 of Decree 143/2018/ND-CP, it is stipulated:

1. Employees who are foreign nationals working in Vietnam shall be required to participate in the compulsory SI program if they obtain work permits, practicing certificates, practicing licenses issued in Vietnam, indefinite-term employment contracts or employment contracts valid for at least one year with employers in Vietnam.

2. Employees referred to in clause 1 of this Article shall be excluded from participation in the compulsory social insurance as provided herein if:

a) they are intra-company transferees as stipulated in clause 1 Article 3 of the Government’s Decree No. 11/2016/ND-CP dated February 3, 2016, providing details of the implementation of certain articles of the Labor Code regarding foreign employees working in Vietnam.

b) they reach retirement age under clause 1 Article 187 of the Labor Code.

Pursuant to Official Letter 1064/LDTBXH-BHXH in 2019, foreign employees are required to participate in compulsory SI program if:

- they obtain a work permit or practicing certificate or practicing license issued by a competent authority in Vietnam;

- they enter into indefinite-term labor contracts or definite-term labor contracts valid for at least 1 year with employers in Vietnam;

- they have not reached the age of 60 for males and 55 for females.

- they are not intra-company transferees as specified in Clause 1 Article 3 of Decree No.11/2016/ND-CP, including employees who have been managers, chief executive officers, experts and technicians of a foreign enterprise for at least 12 months and have been transferred to work in the commercial presence of such enterprise within the territory of Vietnam.

Thus, compared with the above regulations in Vietnam, if you are a Japanese engineer, if you meet the above conditions, you are subject to compulsory social insurance.

In which case foreign employees are not required to issue a work permit in Vietnam?

According to Article 154 of the Labor Code 2019 on foreign workers working in Vietnam who are not subject to work permits, including:

A foreign employee is not required to have the work permit if he/she:

1. Is the owner or capital contributor of a limited liability company with a capital contribution value conformable with regulations of the Government.

2. Is the Chairperson or a member of the Board of Directors of a joint-stock company a capital contribution value conformable with regulations of the Government.

3. Is the manager of a representative office, project or the person in charge of the operation of an international organizations or a foreign non-governmental organization in Vietnam.

4. Enters Vietnam for a period of less than 03 months to do marketing of a service.

5. Enters Vietnam for a period of less than 03 months to a resolve complicated technical or technological issue which (i) affects or threatens to affect business operation and (ii) cannot be resolved by Vietnamese experts or any other foreign experts currently in Vietnam.

6. Is a foreign lawyer who has been granted a lawyer’s practicing certificate in Vietnam in accordance with the Law on Lawyers.

7. In one of the cases specified in an international treaty to which the Socialist Republic of Vietnam is a signatory.

8. Gets married with a Vietnamese citizen and wishes to reside in Vietnam.

9. Other circumstances specified by the Government.

In addition, Article 7 of Decree 152/2020/ND-CP on cases where foreign workers are not subject to work permits are as follows:

Without regard to the cases in clauses 3, 4, 5, 6, 7 and 8 Article 154 of the Labor Code, a foreign worker is exempt from a work permit if:

1. He/she is the owner or capital contributor of a limited liability company with a capital contribution value of at least 3 billion dong.

2. He/she is the Chairperson or a member of the Board of Directors of a joint-stock company with a capital contribution value of at least 3 billion dong.

3. He/she is an intra-company transferee within 11 sectors in the schedule of commitments in services between Vietnam and WTO, including: business services, communication services, construction services, distribution services, educational services, environmental services, financial services, health services, tourism services, recreational and cultural services, and transport services.

4. He/she enters Vietnam to provide professional and engineering consulting services or perform other tasks intended for research, formulation, appraisal, supervision, evaluation, management and execution of programs and projects using official development assistance (ODA) in accordance with regulations or agreement in international treaties on ODA signed between the competent authorities of Vietnam and foreign countries.

5. He/she is granted a communication and journalism practicing certificate in Vietnam by the Ministry of Foreign Affairs as per the law.

6. He/she is sent by a foreign competent authority or organization to Vietnam to teach and study at an international school under management of a foreign diplomatic mission or the United Nations; or of a facility established under an agreement to which Vietnam is a signatory.

7. He/she is a volunteer as specified in clause 2 Article 3 of this Decree.

8. He/she enters Vietnam to hold the position of a manager, executive, expert or technical worker for a period of work of less than 30 days and up to 3 times a year.

9. He/she enters Vietnam to implement an international agreement to which a central or provincial authority is a signatory as per the law

10. He/she is a student studying at a foreign school or training institution which has a probation agreement with an agency, organization or enterprise in Vietnam; or a probationer or apprentice on a Vietnam sea-going ship.

11. He/she is a relative of a member of foreign representative body in Vietnam as specified in point l clause 1 Article 2 hereof.

12. He/she obtains an official passport to work for a regulatory agency, political organization, or socio-political organization.

13. He/she takes charge of establishing a commercial presence.

14. He/she is certified by the Ministry of Education and Training as a foreign worker entering Vietnam for teaching and research purpose.

Best Regards!