Vietnam: New guidance on work permits from the Ho Chi Minh City labor authority and updates on practical difficulties involving work permit applications for foreigners working in Vietnam

In brief

Decree No. 152/2020/ND-CP on foreigners working in Vietnam ("Decree No. 152") took effect on 15 February 2021 and replaced former Decree No. 11/2016/ND-CP ("Decree No. 11") on the same subject. The Department of Labor, Invalids and Social Affairs (DOLISA) of Ho Chi Minh City recently issued Guidance No. 5756/SLDTBXH-VLATLD dated 26 February 2021 ("Guidance No. 5756") on the implementation of Decree No. 152. Guidance No. 5756 which, while repeating the procedural issues under Decree No. 152, also introduces some updates on the management of foreigners working in Vietnam under the authority of Ho Chi Minh City DOLISA.

We have also observed that since the introduction of Decree No. 152, local DOLISAs have generally heightened their scrutiny over applications for work permits. For example, DOLISAs have insisted that foreigners must possess degrees that are directly relevant to or exactly match their positions as experts, and that the renewal of a work permit issued before the effective date of Decree No. 152 would not be allowed, even if such work permit was the first work permit being issued.


Contents

Key takeaways

Enterprises and organizations are recommended to take into account the new regulations, practices and difficulties in work permit applications. Careful preparation and planning are strongly advised. Risks facing foreigners working without work permits or during the period where work permits are being applied must also be carefully considered.

If you have any queries and concerns, please do not hesitate to contact us. We will keep you updated should there be any developments in the future.

In more detail

  1. Practical difficulties over work permit applications

Over the past weeks, we have observed and received feedback from the business community on local DOLISAs' heightened scrutiny over work permit applications. The situation has generally caused difficulties for foreigners working in Vietnam who need to renew their current work permits or apply for new work permits, as well as those who plan to enter Vietnam to work. We list out below some of the notable points.

  1. Renewal of work permits issued under former regulations would not be allowed

As a background, under Decree No. 11, multiple renewals of work permits were allowed without any cap. Now, according to Decree No. 152, a work permit can be renewed only once for a period of up to two years, meaning a work permit's total term (including its first issuance and subsequent renewal) can be a maximum of four years.

Currently, local DOLISAs, including the DOLISA of Ho Chi Minh City, practically refuse to renew any work permit that was issued before the effective date of Decree No. 152, even if such work permit was the first work permit and has never been renewed. The DOLISAs instead require that the foreign employee and employer apply for a new work permit when the work permit expires.

We believe this practice contradicts with the law, as there is no provision under Decree No. 152 providing that work permits issued under Decree No. 11 shall not be renewed.

  1. A foreigner's educational qualification must be directly relevant to or match the job position in Vietnam as an expert

Decree No. 152 provides that, as part of the legal requirements to apply for an "expert" work permit, a foreigner must have:

  1. a bachelor’s degree or equivalent and at least three years of experience in his/her field suitable for the job position in Vietnam; or
  2. at least five years of experience and a practicing certificate suitable for the job position in Vietnam.  

The requirement set out under item (1) above is not a new requirement and was stipulated under Decree No. 11. However, before Decree No. 152, local DOLISAs used to accept a bachelor's degree with any major, which did not have to match the foreigner's job position in Vietnam, as qualified evidence for work permit applications as "experts."

Currently, however, some local DOLISAs, including the DOLISA of Ho Chi Minh City, have strictly requested the major stated in the bachelor’s degree or equivalent to be directly relevant to or exactly match the foreigner's job position in Vietnam; otherwise, the expert work permit application will be rejected. For example, a foreigner holding a bachelor's degree in communication and media cannot apply for an expert work permit as a construction project supervisor.

  1. The authority may have an intention that a foreigner may only work in a position for a maximum of four years

As noted in section 1(i) above, Decree No. 152 provides that a work permit can be renewed only once for a period of up to two years, meaning a work permit's total term (including its first issuance and one subsequent renewal) can be a maximum of four years.

According to some informal consultations with some local DOLISAs, including the DOLISA of Hanoi, the Ministry of Labor, Invalids and Social Affairs (MOLISA) may have an intention that, after the four-year maximum period, including a new work permit issuance and one renewal, foreign workers should have transferred their knowledge, experience and expertise to local labor and would need to apply for a new work permit under a new position if they want to continue working in Vietnam.

This understanding, however, has not yet been confirmed or mentioned by the MOLISA.

  1. Updates under Guidance No. 5756

In general, while Guidance No. 5756 does not introduce extensive changes or updates to what have been provided under Decree No. 152, it addresses in detail the procedural process and paperwork relating to, among others, the work permit application, re-application and renewal processes.

Notably, Guidance No. 5756 adds two items to the list of information that must be included in the notification to Ho Chi Minh City DOLISA (as required under Decree No. 152) with respect to foreigners who are entitled to work permit exemption status without having to obtain a certificate on work permit exemption, e.g., foreign lawyers, individual investors, and foreigners getting married to Vietnamese citizens. Such information includes the job position and job title of the foreigner, which are not required in Decree No. 152. The foreigner and employer must send the notification to the Ho Chi Minh City DOLISA at least three days prior to the expected commencement date.

Contact Information
Tung Phong Luc
Trainee Solicitor
Ho Chi Minh City
tungphong.luc@bakermckenzie.com

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