Vietnam is actively seeking to bolster its ability to attract high-caliber international talent while simultaneously safeguarding the interests of its domestic workforce.
As a result, the Vietnamese Government has just issued Decree No. 70/2023/ND-CP ("Decree 70") on September 18, 2023, bringing significant updates in the current regulations for foreign employees working in the country and, specifically, amending various points of the Decree No. 152/2020/ND-CP ("Decree 152").
In this article, we aim to provide an in-depth understanding of Decree 70 and its potential impact on Foreign businesses in Vietnam, with five pivotal changes encompassing fundamental aspects such as the criteria mentioned below.
1. Conditions for Work Permit application has been relaxed
First of all, in Vietnam, foreign employees can be appointed for specific Job Assignments and, as a principle, they should be employed only for positions for which local Vietnamese staff would be unqualified.
The Job Assignments ( called as “Vị trí công việc”) for foreign employees regulated by the Decree 152 are:
Ø Expert (Chuyên gia)
Ø Manager (Nhà quản lý)
Ø Executive (Giám đốc điều hành)
Ø Technical Worker (Lao động kỹ thuật)
Regarding Experts (Chuyên gia), according to Article 3.3 Decree 152, Experts are mandated to possess a bachelor's degree in their intended field along with 3 years' relevant experience or 5 years' experience with a practicing certificate. Under the Decree 70, Experts only need to have a university degree or equivalent suitable for the expected job position in Vietnam and have at least 3 years of relevant work experience or 5 years' experience with a practicing certificate or they are under a special case subject to decision of the Prime Minister according to a request of the Ministry of Labor, War Invalids and Social Affairs.
Regarding Manager (Nhà quản lý) the rule remains unchanged in Decree 70, which includes sole proprietors, partners, assembly members, company presidents, or holder of another managerial position prescribed in the company’s charter and heads/deputy heads of agencies.
Regarding Executive Directors (Giám đốc điều hành), according to Article 3.5 Decree 152, Executive Directors were defined as heads or individuals directly overseeing affiliated entities of an agency, organization, or enterprise. Under the Decree 70, their role expands beyond being the head of a branch, representative office, or place of business of the enterprise; or being the head who directly administers at least one field of the agency, organization, or enterprise and reports directly to the head of the agency, organization, or enterprise.
Regarding Technical Workers (Lao động kỹ thuật), according to Article 3.6 Decree 152, Technical Workers (Lao động kỹ thuật) were required to have at least 1 year of training in a technical field or another major, coupled with a minimum of 3 years of work experience in their training field or 5 years' experience corresponding to the intended job position in Vietnam. However, with the Decree 70, they are now exempted from the obligation to work specifically in their trained field. Instead, they need at least 1 year of training and a minimum of 3 years of experience suitable for the job position they are expected to fill in Vietnam, or 5 years' experience corresponding to the intended job position.
2. Authority to issue documents approving the use of foreign workers of MOLISA has been changed
Before the enactment of Decree 70, the Ministry of Labor, War Invalids, and Social Affairs ("MOLISA") were authorized in issuing approvals for the employment of foreign workers affiliated with organizations or companies were granted approval by the Government, the Prime Minister, a Ministry, ministerial-level agency, or a Governmental agency. These encompassed entities falling under the following categories:
Ø Regulatory agencies, political organizations, socio-political organizations, socio-political professional organizations, social organizations, or socio-professional organizations.
Ø Foreign non-governmental organizations licensed by the competent authorities of Vietnam in accordance with Vietnamese laws.
According to Article 1.2 of Decree 70, in addition to the aforementioned responsibilities, MOLISA is also authorized to issue work permits in connection with representative offices, branches of enterprises, agencies, or organizations licensed by the Government, the Prime Minister, a Ministry, ministerial-level agency, or a Governmental agency.
Furthermore, MOLISA is empowered to grant work permits for foreign employees engaged with companies operating across multiple provinces or municipalities.
3. Labor recruitment notices shall be posted on MOLISA from 2024
This is a completely new regulation specified in Article 1.2 Decree 70, from January 1, 2024, a recruitment notices for Vietnamese workers in positions expected to recruit foreign workers will be require to post on the following channels at least 30 days before the date on which foreign workers are expected to be employed:
- Website of the MOLISA (Employment Department) (http://doe.gov.vn/);
- Website of the Employment Service Center, which is established by the President of the People's Committee of province or centrally affiliated city
Importantly, only after unsuccessful attempts to recruit Vietnamese workers for the targeted positions are made can organizations proceed to apply for the determination of demand for foreign workers in those specific roles.
4. Reporting to MOLISA for engagement of foreign employees to work in various provinces/cities is now required
Another notable new point of Decree 70 on foreign workers is that under Article 1.3, for foreign workers working for one employer in many provinces and cities, you must report online to the MOLISA where the foreign worker comes to work within 03 working days from the date the foreign worker starts working.
5. Issuance of electronic work permits has been allowed
In addition to the current form of paper work permit, Article 1.6 of Decree 70 also allows the issuance of electronic work permit but it is required to comply with the provisions of the law and satisfy the content in accordance with Form No. 12/PLI regulations on Work Permit Forms.
To sum up, while Decree 70 has relaxed some regulations and conditions for work permit eligibility and application procedures, it still prioritizes protecting job opportunities for the Vietnamese workforce over foreign nationals, aligning with the principles of Decree 152 and recent enforcement trends of Vietnamese labor authorities. As a result, the company may face challenges in justifying the need to hire foreign nationals instead of Vietnamese employees. It is recommended to engage in careful preparation and planning, or consulting with a legal advisor with regards to work permit applications on account of the new rules of Decree 70.
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The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D'Andrea & Partners and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.