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Can a FDI Enterprises recruit employees directly?


Under the Labour Code, FDI Enterprises may either directly recruit Vietnamese employees or via an authorised labour agency. FDI Enterprises are then required to register the list of Vietnamese employees with the local labour department and submit the reports of employment and changes of employees to the labour department on a periodic basis.

Do FDI Enterprises have to register their expatriate employees with the authorities? What documents are required?


Except for the General Director, Deputy General Director and Members of the Board of Management, all expatriates working in the Company for a period of more than 6 months are required to obtain a work permit. The Company (i.e. employer) is required to submit applications to the local labour department to obtain the work permit for its expatriate employees.

Besides, in according to an Official Letter by the Ministry of Labour, War Invalids and Social Affairs (MOLISA), expatriates who are considered to have work and management experience that Vietnamese employees cannot satisfy, must also have five-year relevant experience, as certified by the foreign competent authorities. The supporting document for work permit application must be certified by the competent authorities in the home country of the expatriate and be authenticated by the relevant Vietnamese consulate.

Are social insurance (SI), health insurance (HI) and health insurance (UI) for employees compulsory for FDI Enterprises? What are the rates of contribution?


From 1 July 2009, according to Law No. 25/2008 on health insurance, the compulsory contribution for HI will be based on decision of the Government in each specific time but capped at 6% of the contractual salary/allowances. Of this amount, 2/3 is contributed by employers and 1/3 is contributed by employees.

The provision of the ceiling contribution rate of 6% would give the Government the flexibility to stipulate the appropriate contribution rate from time to time. As at 1 July 2013, the rate of HI is 4.5% (of which 3% by employers and 1.5% by employees). We noted that the ceiling 6% rate is not likely applied in the near future as in current economic condition an increase in HI will give much burden on companies and employees.

Law No. 25/2008 also introduces new entitlements to employees under the mandatory insurance schemes, including maternity leave and unemployed individuals will be entitled to the HI scheme without the HI contribution requirement.

Law No. 71/2006 on social insurance stipulates that from 2010, the SI rates will increase by 1% every two years until they reach 8% for the employees and 18% for the employers. The SI rates are as follows:

2012 to 2013

2014 onwards (highly potential)







The compulsory contributions for the SI and HI mentioned above are calculated at the respective rates of whichever is lower, the contractual salary/allowances or the statutory cap which is 20 times of the minimum salary, which is regulated by the Government for each specific time. As at 1 July 2013, the monthly minimum salary is from VND 1,650,000 to VND 2,350,000 depending on the working area.

Unemployment Insurance (UI) Scheme introduced under the Law No. 71/2006 was applicable from 1 January 2009. Both employer and employee will contribute the same rate of 1% based on whichever is lower – the contractual salary/allowances or the statutory cap which is set at 20 times the minimum salary.

It is noted that for companies where Trade Union are set up, the Union fee of 2% total salary expenses will be borne by employers.

In summary, the current rates of insurances are as follows:

Employee contribution %

Employer contribution %

Total %



















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