Question 160: Are foreign Employees required to participate in compulsory HI when they are appointed to work in Vietnam, having work permits but with or without arising salary in Vietnam?

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The Vietnamese law stipulates the subjects participating in compulsory HI, including Employees working under indefinite or definite LCs of 3 months or more; Employees as a paid manager of the enterprise[1]. This provision applies to both Vietnamese and foreign Employees currently working in Vietnam. Accordingly, foreign Employees paid in Vietnam under LCs or appointment letters shall pay compulsory HI. In contrast, if foreign Employees working in Vietnam do not receive any salary as in case of appointment and are paid by the foreign side, they are not subject to compulsory HI.

For example: Is the chief of a representative office working in Vietnam under an apointment letter subject to compulsory HI, SI when he/she does not sign an LC but has a work permit and earns income in Vietnam?

Because the chief of the representative office works in Vietnam under the appointment letter, it should be understood that foreign Employees are managers working in Vietnam in the form of intra-company mobility[2].Considering the case referred to herein, foreign Employees as corporate managers with the earned incomes in Vietnam to be subject to compulsory HI.[3]

In addition, as from 01/01/2018, Employees as foreign citizens working in Vietnam under a work permit or a practicing certificate or a practicing license issued by a competent Vietnamese authority will also participate in compulsory SI[4]. Since the chief of a representative office has a work permit and earns arising income from Vietnam, he/she as a foreign Employee in this case is also required to participate in compulsory SI from January 1, 2018 onwards.


[1]Article 12.1 Law on HI

[2]Article 2.1 (b) and Article 3.4 of Decree 11/2016/ND-CP dated 03/02/2016

[3]Article 12.1 Law on HI

[4]Articles 2.2 and 124.1 Law on SI