As of January 1, 2021, Article 151 of the 2019 Labor Code mandates that only definite-term labor contracts may be signed with foreign employees. The term of such contracts must not exceed the validity period of the work permit. Furthermore, parties can agree to renew or enter into successive definite-term labor contracts. However, the rule allowing indefinite-term contracts after two consecutive definite-term contracts (under Article 20 of the Labor Code) does not apply to foreign workers.
Is a Work Permit Required for a Foreign Legal Representative of an Enterprise if He/She Works Outside of Vietnam?
Legal Status of a Legal Representative (LR):
Under Vietnamese labor law, an LR of an enterprise is categorized as a “manager” and is thus required to obtain a work permit unless exempted. Exemptions include:
- Ownership-based Exemption: An LR who is an owner or a capital-contributing member of a limited liability company with a contribution of at least VND 3 billion.
- Shareholding-based Exemption: An LR who is a Chairperson or a Board member of a joint stock company owning shares valued at VND 3 billion or more.
Practical Challenges:
It is common for multinational enterprises to nominate a foreigner as LR, often as a formality, without requiring their regular presence in Vietnam. If such an LR is the sole representative, they must maintain a Vietnamese residence address as per Article 12 of the 2020 Enterprise Law. This necessitates a work permit unless another LR residing in Vietnam is registered.
Solutions to Compliance:
Enterprises can mitigate issues by:
- Registering an additional LR, preferably a Vietnamese national or a foreigner residing in Vietnam.
- Clearly defining the authority and responsibilities of each LR in the company’s charter to prevent misuse.
Example:
A subsidiary in Vietnam of a UK-based group appointed two LRs—a Dutch national based in the UK and a Vietnamese resident. To align with compliance, the company charter restricted the second LR to operational tasks and granted veto power to the first LR, ensuring compliance while safeguarding company interests.
If a Foreigner Receives a Job Offer in Vietnam While Traveling, Is He/She Allowed to Work in Vietnam?
Visa and Work Permit Requirements:
Foreigners must obtain a work permit before commencing work in Vietnam. A tourist visa (DL) does not permit working activities. However, foreigners holding a tourist visa may apply for a work permit, provided they:
- Exit Vietnam to switch their visa to a work visa, as required under the immigration law.
- Re-enter Vietnam with the appropriate work visa to commence employment legally.
Consequences of Non-compliance:
- Fines: Working on a tourist visa can result in fines ranging from VND 15 million to VND 20 million.
- Expulsion: Violators may be expelled and prohibited from re-entering Vietnam for up to three years.
Why Is There an Obligation to “Declare the Temporary Residence of Foreigners” When the Foreigner Is Already Obliged to Obtain a Visa/Temporary Residence Card?
The obligation to declare temporary residence arises from a dual-layered compliance framework:
- Immigration Law: Foreigners must have valid visas or temporary residence cards to reside legally.
- Administrative Reporting: Temporary residence declarations must be submitted within 12 to 24 hours of arrival at the place of accommodation.
Importance of Compliance:
Temporary residence declarations are essential for:
- Extending visas or residence cards.
- Applying for Vietnamese criminal records.
- Granting work permits.
Responsibilities:
The onus to declare resides with:
- Accommodation providers (e.g., hotels, guesthouses).
- Hosts in long-term rental agreements or property owners.
Penalties:
Failure to declare temporary residence can result in fines ranging from VND 3 million to VND 5 million and potential expulsion.
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
