26 Jul Conditions and Key Compliance Tasks Of Employers And Foreign Employees in Vietnam
When recruiting foreign employees in Vietnam, there is a number of compliance tasks and legal frameworks that must be understood. In this article, we would like to clarify the conditions and key compliance tasks of both local employers and foreign employees to recruit and apply for jobs in Viet Nam
Conditions for foreign employees to work in Vietnam
- Possessing technical and professional qualifications, skills and health condition that are appropriate to the work requirements.
- Not being a criminal or subject to penal liability examination according to Vietnamese and foreign laws.
- Foreign employees working in Vietnam shall comply with the labor law of Vietnam and treaties to which Vietnam is a contracting party which have different provisions, and are protected by Vietnamese law.
Conditions for employment of foreign employees
- Domestic enterprises, agencies, organizations, individuals and contractors may only employ foreign employees in such positions as manager, managing director, expert and technical worker which Vietnamese employees are still unable to meet production and business requirements.
- Foreign enterprises, agencies, organizations, individuals and contractors shall, before employing foreign citizens to work in the territory of Vietnam, explain their labor demands and obtain written approval from competent state agencies.
Compliance tasks of recruiting foreign employees in Viet Nam
For the employers
- Collect and manage the employees profile according to labor regulation and prepare for personal income tax records.
- Declare labor use to competent state agencies
- Declare and pay for medical insurance and in accordance with the Law on Social Insurance, which went into force early last year but will not cover foreign nationals working in Vietnam until early 2018, foreign workers in Vietnam with a work permit, or a practice certificate or license will have to contribute social insurance. Vietnam has the current social insurance contribution rate up to 32.5%.
- Register personal tax code number, deduct monthly personal income tax and pay on behalf. Some of your staff may not joined your company full 12 months in fiscal year or have global incomes or more incomes from wages /salary from other companies, in this case, these staff cannot request the employers to settle tax on their behalf but directly declare tax at tax authorities.
- Remember for the first tax year of foreign employees: make and submit the tax settlement form by the 90th day from the end of the 12 consecutive months for the employee earns incomes form wages and has been present in Vietnam in the first calendar year for fewer than 183 days, but has been present in Vietnam for 183 days or more within 12 consecutive months from the date of arrival.
- Prepare monthly, quarterly and annually personal income tax declaration and annually settlement.
- Terminate the work permits (and the temporary card) once the labor contract terminated.
For the employees
- Apply for a temporary resident card as two years visa multiple
- Register temporary resident place with the local police for proper records
- Collect and prepare papers for personal income tax declaration and settlement: Labor contracts, appointment letters, letter of income confirmation, dependent persons, school fee for children receipts, rental contacts, tax withhold receipts for incomes from other resources.
- Directly declare tax at tax authorities. Upon you are resident or none resident in the fiscal year, you should declare and settlement of PIT for the incomes inside Vietnam or either global income. Taxable amount / tax rates of resident and none resident are completely different. Fail to apply properly declaration of PIT will lead to serious fines from tax department in coming years.
- Prepare to renew work permit before the expired date at least 03 months.
- Arrange for tax completion certificate before ending the assignment and leaving from Viet Nam
With more than 10 years of delivering employment consultation for more than 1000 foreign recruitment cases in Viet Nam, Viva Business Consulting is capable to consult and implement any query you have in the most practical way. We prevent your business from any potential risks in advance so you can recruit and manage foreign employees in the most simple and cost effective way.