RIGHTS OF FOREIGN LABORERS WORKING IN VIETNAM

Extensive integration process and economic development in Vietnam attract more foreign workforce to live and work in Vietnam. In order to encourage workers to be in long-term commitment to the job and matching labor management mechanism of state agencies, the promulgation of the regulatión on the rights of foreign laborers working in Vietnam are needed, and this article will clarify these issues:

1) Labor contract:

Vietnamese workers can sign with the employer by 3 types of labor contracts stipulated in Article 22 of the Labor Code 2012:

- Indefinite-term labor contract;

- Definite-term labor contract;

- A seasonal or work-specific labor contract that has a duration of under 12 months.

However, regarding for foreign laborers working in Vietnam, their working period in Vietnam must depend on the work permit, so foreign workers only can sign labor contracts with indefinite terms, and the maximum is 02 years in accordance with Article 11 of Decree 11/2016 / ND-CP.

2) Compulsory social insurance:

Thereby, while the domestic labors are required to participate in social insurance (SI), health insurance (HI) and Unemployment Insurance (UI), and the provisions of Clause 2, Article 2 of the Law social insurance refers to participants of social insurance:

“Employees who are foreign citizens working in Vietnam with work permits or practice certificates or practice licences granted by competent Vietnamese agencies shall be covered by compulsory social insurance under the Government’s regulations.”

However, this clause can only be effective from 01/01/2018, so now foreign workers do not have to participate in compulsory social insurance; but health insurance is applicable to every laborers without distinction to employees in or abroad.

3) Personal income tax (PIT):

It is necessary to clarify that person is a resident or non-resident individuals when foreign citizens working in Vietnam declare and pay PIT:

Decree No.65/2013/ND-CP prescribes resident individual.

“A resident individual means a person who satisfies any of the following conditions:

a) Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of his/her presence in Vietnam;

Individuals present in Vietnam under this Point means those whose presence is in the Vietnamese territory.

b) Having a place of habitual residence in Vietnam in either of the following two cases:

- Having a registered place of permanent residence under the law on residence;

- Having a rented house for dwelling in Vietnam under the law on housing, under a rent contract with a term of 183 days or more in a tax year.”

A non-resident individual means a person who does not satisfy any of the conditions specified in Article above.

3.1) For resident individuals:

PIT shall be counted according to the partially progressive tariff as domestic workers:

Tax grade	Taxed income per year  (VND million)	Taxed income per month (VND million)	Tax rate (%)
1	Up to 60	Up to 5	5
2	Between over 60 and 120	Between over 5 and 10	10
3	Between over 120 and 216	Between over 10 and 18	15
4	Between over 216 and 384	Between over 18 and 32	20
5	Between over 384 and 624	Between over 32 and 52	25
6	Between over 624 and 960	Between over 52 and 80	30
7	Over 960	Over 80	35

Resident individuals terminating labor contracts in Vietnam before leaving the country must implement the tax settlemen.

3.2) For non-resident individuals:

Tax on income from salary or wage of a non-resident is determined to be equal to his/her income from salary or wage multiplied by the tax rate of 20%.

Note: For the personal income tax from the salaries and wages of non-resident individuals are not needed to settle.