Work Permits Concept And The Importance Of Work Permit For Foreign Employees In Vietnam

The trend of international integration and the strong development of the global economy have facilitated labour mobility between countries. In Vietnam, with the continuous increase in foreign investment projects and the demand for highly skilled employees, the recruitment of foreign employees, especially experts and managers, is becoming more common. However, to ensure transparency, effective management of foreign labour, and prioritisation of domestic workforce development, Vietnamese law requires foreign employees to obtain a valid work permit. This is not only a mandatory legal condition but also a foundation for foreign employees to safeguard their rights and work legally in Vietnam. This article provide information regarding Work Permit Concept and the Importance of Work Permit for Foreign Employees in Vietnam to help individuals and enterprises better understand this matter.

Work permit concept

A work permit is a legal document that allows foreign employees to work legally in Vietnam. According to the provisions of Decree 152/2020/ND-CP, as amended and supplemented by Decree No. 70/2023/ND-CP, a work permit is issued by a competent state authority, specifically the Labour Department under the Ministry of Labour, Invalids and Social Affairs or the Department of Labour, Invalids and Social Affairs where the employee is expected to work.

Contents of a work permit

Work permits, as outlined in Form No. 12/PLI of Decree No. 152/2020/ND-CP, may be issued in two formats:

• Paper format: A traditional printed document widely used for administrative transactions.
• Electronic format: A digitised document equivalent to the paper format in legal value, used in online systems to enhance convenience and reduce paperwork.

Regardless of format, a work permit must include the following details:

Work permit code and status

The work permit code includes the province/city code, the code of the Ministry of Labour, Invalids and Social Affairs, the year of issuance, the type of work permit (new issuance, extension, reissuance), and the serial number.

Personal information of employees

• Full name;
• Gender;
• Passport number;
• Date of birth;
• Current nationality and passport number.

Workplace information

• Name and address of the organisation or enterprise where the employee is expected to work.
• The workplace corresponds to the location specified in the labour contract expected to be concluded with the employer. In cases where a foreign employee works for an employer at multiple locations, all workplaces must be fully listed.

Job position, working form, job title

• The job position the employee will undertake, including specific titles such as expert, manager, executive director, or technical employee. Furthermore, information about the form of employment must be one of the forms specified in Clause 1, Article 2 of Decree No. 152/2020/ND-CP.
• The job title must correspond to the job position and align with the title specified in the labour contract expected to be concluded with the employer.

Duration of employment

The duration of employment for the employee is typically based on the term of the labour contract expected to be concluded with the employer or other cases specified in Article 10 of Decree No. 152/2020/ND-CP. However, it must not exceed two years from the effective date of the work permit.

The Importance Of Work Permits For Foreign Employees In Vietnam

A work permit is a highly important legal document for foreign employees working in Vietnam for the following reasons:

Legalising employment activities

A work permit serves as legal certification, allowing foreign employees to work in Vietnam. Having a work permit helps employees avoid legal risks, such as administrative fines or deportation for working without a permit. According to Clause 3, Article 32 of Decree 12/2022/ND-CP, foreign employees working without a work permit or confirmation of exemption may face fines ranging from VND 15,000,000 to VND 25,000,000. In addition, supplementary penalties such as deportation may also apply.

Additionally, employers who are organisations engaging in the employment of foreign employees in Vietnam without a work permit, without a certificate of exemption from the work permit requirement, or employing foreign employees with expired work permits or expired exemption certificates may be subject to fines ranging from VND 60,000,000 to VND 150,000,000, depending on the number of employees in violation, as stipulated in Clause 1, Article 6, and Clause 4, Article 32 of Decree No. 12/2022/ND-CP.

Thus, foreign employees and employers must strictly comply with Vietnam’s labour laws, including applying for a work permit or obtaining confirmation of exemption before working. Failure to comply with these regulations results in administrative sanctions and can severely impact the rights, reputation, and ability to work legally in Vietnam. To avoid legal risks, foreign employees and their employers must closely coordinate in preparing and submitting complete documentation under legal requirements.

Protecting employee rights

A work permit is not just a legal document but also the basis for protecting employee rights. With a valid work permit, employees are entitled to legal benefits in Vietnam, including wages, working conditions, social insurance, and other benefits as outlined in their labour contract.

According to Article 2 of the Social Insurance Law 2014, foreign employees working in Vietnam with a valid work permit must participate in mandatory social insurance. By doing so, they gain access to benefits such as health insurance, maternity leave, workplace accident compensation, occupational disease coverage, and pension benefits upon retirement. This is a crucial measure to safeguard employees’ rights and mitigate financial risks during their employment in Vietnam.

Fulfilling of tax obligations

Foreign employees with work permits are required to fulfil tax obligations under Vietnamese law, including declaring and paying personal income tax. Adhering to tax obligations not only avoids legal violations but also ensures the legitimate rights of foreign employees while working in Vietnam.

Work permits are not only a mandatory legal requirement for foreign employees in Vietnam, but also play an important role in ensuring social order, security and transparency in labor management. Compliance with regulations on work permits and understanding Work Permits Concept and The Importance of Work Permits for Foreign Employees in Vietnam ensure lawful employment, protecting the rights of both employees and employers. This contributes to creating a professional, fair, and sustainable working environment that meets Vietnam’s international integration and economic development demands.

The above is an overview of Work Permits Concept and The Importance of Work Permits for Foreign Employees in Vietnam. If you have difficulties in finding a Law Firm to advise and support in the relevant legal field, please contact us. Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also rated as one of the leading consulting firms in Vietnam with highly specialised teams in top legal fields such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing customers with optimal and effective service.