In brief

On 18 September 2023, the Government issued Decree No. 70/2023/ND-CP ("Decree 70") amending and supplementing certain provisions of Decree No. 152 on foreign employees working in Vietnam and the recruitment and management of Vietnamese employees working for foreign individuals and organizations in Vietnam ("Decree 152"). Decree 70 took immediate effect as of its issuance date.

While some regulations and conditions for work permit eligibility and application procedures have been loosened, Decree 70 continues to prioritize the protection of job opportunities for the Vietnamese workforce over foreign nationals, which is in line with the spirit of Decree 152 and recent enforcement trends of the Vietnamese labor authorities. It is expected that there may be potential challenges for employers in respect to justifying the need to engage foreign nationals instead of Vietnamese employees.

Recommended actions

Enterprises and organizations are advised to engage in careful preparation and planning in regards to work permit applications on account of the new rules of Decree 70.

Please do not hesitate to contact us if you have questions on the content of Decree 70 or need assistance in work permit application planning and processes.

In more detail

Below is our summary of the key contents of Decree 70:

1. Notification on the recruitment of Vietnamese workers is now required before applying for approval of foreign labor use demand

From 1 January 2024, employers will be required to, at least 15 days before filing an application for the approval of foreign labor use, provide notice of the recruitment of Vietnamese employees to the job positions in which foreign employees are expected to work, on the public electronic information portal of the Occupational Department – Ministry of Labor, Invalids and Social Affairs (MOLISA) or a competent job service center. The content of such recruitment notification must include information such as the intended position and job title, job description, quantity, requirements for qualifications, experience, salary, working time and location.

If the employer fails to recruit Vietnamese workers, it can then proceed to apply for the approval of using foreigners in the intended recruitment positions.

2. Conditions for work permit eligibility of "experts" and "technical workers" have been loosened

According to Decree 70, a foreigner is required to have a bachelor's degree (or higher) and at least three years of suitable working experience for the position to be taken in Vietnam to be considered as an "expert"; or be trained for at least one year and have at least five years of suitable working experience for the position to be taken in Vietnam to be considered a "technical worker".

Foreigners are no longer required to have bachelor's degrees or training directly related to their intended job positions in Vietnam, as was required under Decree 152.

3. Past work permits can be used to evidence work permit eligibility of "experts" and "technical workers"

Decree 70 does not provide any changes to the Decree 152 requirement that a work permit can only be renewed once. However, according to Decree 70, foreign experts and technical workers whose work permits having been renewed once that wish to continue to work in the same job positions and titles as provided in the work permits, can use such issued work permits as evidence of their eligibility as "experts" or "technical workers" in the application for new work permits.

4. Evidence of work permit eligibility for "business managers" is now clearly specified

Under Decree 70, while the definition of "business manager" remains the same as Decree 152, employers must now submit the following documentation as evidence: (i) the enterprise's charter or operation regulations; (ii) the enterprise's registration certificate, establishment certificate or decision; and (iii) the enterprise's resolution or decision on the appointment of the foreigner to the business manager position.

5. Definition of "executive directors" is expanded

According to Decree 70, a foreigner: (i) who leads and directly manages at least one function of an enterprise who is working under the direct instruction and management of the head of such enterprise; or (ii) who is a head of branch, representative office or business location of an enterprise, qualifies as an "executive director".

Required documentary evidence of work permit eligibility for an "executive director" is similar to that of "business managers" as mentioned in Section 4 above.

6. Reporting to the MOLISA is required for the engagement of foreign employees to work in various provinces/municipalities

If a foreign employee works for an employer in a variety of provinces/municipalities, within three working days from the date which the foreign employee starts working, the employer must file an online report to the MOLISA as well as the corresponding Department of Labor, Invalids and Social Affairs (DOLISA) of the provinces/municipalities where the employee is going to work.

7. All working locations must be specified in work permit application forms

According to Decree 70, if a foreign employee will work for an employer in various working locations, the employer must specify all such working places in the work permit application form.

8. Authority to grant work permits

According to Decree 70, the MOLISA shall grant work permits (and have governing authority over all work permit related matters) for foreign employees who work for organizations permitted to be established by the Government, Prime Minister, Ministries, Ministry-level agencies or agencies of the Government. Such organizations include, for instance, enterprises operating in the banking or insurance sectors.

Furthermore, the MOLISA will grant work permits for a foreign employee working for an employer in a variety of provinces/municipalities.

The relevant provincial DOLISA shall grant work permits (and have governing authority over all work permit related matters) in other cases which do not fall under the governing authority of the MOLISA.

The management board of industrial zones or economic zones no longer have the authority to grant work permits/work permit exemption certificates to foreign employees working in such zones.