Expats living and working in Vietnam enjoy many incentives related to taxation, visa requirements, and administrative processes. However, compliance with local laws and regulations is essential to avoid potential risks. Below is an overview of key compliance procedures expats should keep in mind:

VISA

A visa is a document issued by Vietnamese authorities allowing entry into the country. It can be issued for single or multiple entries and must align with the declared purpose of entry. There are various types of visas with distinct symbols and time limits:

  • ĐT: For investors (valid for 12 months to 10 years).
  • LĐ: For workers (valid up to 2 years).
  • DN: For those working with Vietnamese companies (valid up to 12 months).
  • TT: For family members of visa holders (valid up to 12 months).
  • DL: For tourists.

Visa exemptions apply in certain cases, such as citizens from 24 countries with bilateral agreements or individuals of Vietnamese origin holding visa exemption papers.

WORK PERMIT (WP)

A work permit is required for foreign employees in Vietnam, except in cases of exemption. Key eligibility criteria include:

  • Employment as a manager, executive, expert, or technician.
  • Written approval from a competent authority.
  • Good health and no criminal record.

TEMPORARY RESIDENCE CARD (TRC)

A TRC acts as a multi-entry visa, valid for 2 to 5 years, depending on the applicant’s situation. Eligible applicants include foreign company owners, members of boards of directors, and relatives of TRC holders.

Key points:

  • The card’s validity is shorter than the applicant’s passport validity.
  • Specific codes (e.g., LĐ, ĐT, TT) determine the maximum duration, ranging from 2 to 10 years.

PERMANENT RESIDENCE CARD (PRC)

A PRC allows foreigners to reside in Vietnam permanently. Eligibility includes:

  • Lawful residence for 3+ years.
  • Stable income ensuring self-sufficiency.
  • Sponsorship by a Vietnamese spouse, parent, or child.

MANAGEMENT OF PAYROLL AND EMPLOYMENT RELATIONS

Foreign employers and employees must adhere to local labor laws. This includes compliance with labor contracts, wages, working hours, social insurance contributions, and tax reporting.

Typical procedures:

  • Drafting and modifying labor contracts.
  • Ensuring minimum wages and adhering to wage policies.
  • Managing employee leave, discipline, and incentives.

PERSONAL INCOME TAX (PIT)

Foreigners must declare and settle PIT annually. Tax obligations depend on residency status:

  • Residents: Global income taxed progressively at 5–35%.
  • Non-residents: Vietnamese income taxed at 20%.

COMPULSORY INSURANCES

Foreign employees with valid work permits or contracts of at least 12 months are required to participate in Vietnam’s compulsory social insurance (SI) program.

  • Employer contributions: 20.5% of salary.
  • Employee contributions: 9.5% of salary.

Exceptions include intra-company transferees or those reaching retirement age.

OTHER LOCAL ADMINISTRATIVE PROCEDURES

Additional procedures foreign nationals may need include:

  • Opening bank accounts.
  • Managing housing purchases or rentals.
  • Handling investment-related documentation.
  • Obtaining notarized translations and legal representation.

These guidelines aim to simplify the administrative processes and ensure a smoother experience for expats navigating Vietnam’s legal and business environment.

The above information is provided by Mys Law. For any questions regarding the content of this article, please contact 0969.361.319 or email: [email protected] for further clarification. Best regards!

Compiler: Nguyen Anh Quan