Amendments to Immigration Law and Labor Code Forthcoming

At a Glance

Changes to both the immigration laws and, separately, the Labor Code are expected in Vietnam.
The proposed amendments to Vietnam’s immigration laws aim to ease the immigration requirements in Vietnam and are likely to become effective on July 1, 2020. Key benefits will include the ability for e-Visa holders to change their visa category in country, the elimination of the 30-day cooling-off period for visa-exempt foreign nationals, and a longer visa validity for investors, among other changes.
Separately, a new Labor Code will become effective on January 1, 2021 and will replace the current Labor Code which was implemented in 2013. Key changes in the Labor Code include a new minimum contribution amount for foreign owners or members of a limited liability company and a limit on Work Permit extensions, among other changes.

The situation

The government has proposed amendments to Vietnam’s immigration law that ease rules regarding durations of stay and other regulations that would come into effect on July 1, 2020. Additionally, a new Labor Code that imposes certain rules covering foreign workers in Vietnam will come into effect on January 1, 2021.

A closer look

Proposed Immigration Amendments
Key change	Current rule	Impact
In-country change of status for certain foreign nationals. Foreign employees who enter Vietnam under an e-Visa may be allowed to change their visa category in country once they have obtained a valid Work Permit, or a valid Work Permit Exemption Certificate (WPEC). Parents, spouse, and children of Work Permit/WPEC holders will be allowed to change their visa category in country. Foreign investors or representatives of foreign organizations that invest in Vietnam may be allowed to change their visa category in country depending on the purpose of their stay.	Currently, there is no in-country change of visa category for foreign nationals in most cases. Foreign nationals must exit Vietnam and re-enter with the correct category of visa.	More foreign nationals will be able to change their status without leaving Vietnam, making it easier to transition to long-term visa status. At this point, there is no specific guidance regarding the requirements or the visa categories which may be eligible for the in-country visa status conversion.
Elimination of cooling-off period for visa-exempt foreign nationals. Foreign nationals who enter Vietnam under unilateral visa waiver status will no longer be subject to the 30-day cooling-off period between the last exit date and the next entry date.	Unilaterally visa-exempt foreign nationals cannot enter Vietnam for 30 days after they last left the country.	Unilaterally visa-exempt foreign nationals (those from Belarus, Denmark, Finland, France, Germany, Italy, Japan, Korea, Norway, Russia, Spain, Sweden, and the United Kingdom) will not have to wait 30 days after they leave Vietnam to enter again, making it possible to re-enter more often.
Longer validity for investors. Foreign investors in Vietnam will be granted a Visa/Temporary Resident Card (TRC) with up to 10 years’ validity, depending on the investment amount.	Currently, a Visa/TRC for foreign investors is only granted for up to five years.	Foreign investors will be eligible for a longer stay in Vietnam than is currently allowed, depending on the investment amount.

New Labor Code
Key change	Current rule	Impacts
More restrictions for Work Permit-exempt foreign nationals. Restrictions will be introduced for foreign owners or capital-contributing members of a limited liability company, and for the chairman of the Board of Directors or a member of the Board of Directors of a joint stock company, who are Work Permit-exempt. Such foreign nationals will need to contribute an amount that will be announced in the upcoming Decrees and/or Circulars to be eligible for the Work Permit exemption.	Currently, limited liability company members and others that will become subject to the restrictions are not subject to a minimum contribution amount to their company to be eligible for a Work Permit exemption.	It will become harder to qualify for the Work Permit exemption for foreign owners or members of a limited liability company (and others mentioned in the law) in Vietnam, as they will be subject to a new minimum contribution amount.
New Work Permit exemption for foreign nationals married to Vietnamese nationals. Foreign nationals married to a Vietnamese national who lives in a Vietnamese territory will become eligible for a Work Permit exemption.	Foreign nationals married to a Vietnamese national are currently not Work Permit exempt.	It will be easier for eligible foreign nationals married to a Vietnamese national to work in Vietnam as they will not need to undergo the Work Permit application process, which can take at least 12-14 weeks. However, it is likely that they will still need to apply for the Work Permit Exemption Certificate.
Limitation on Work Permit extensions. Work Permit holders will only be able to extend their Work Permit for a maximum duration of two additional years.	There is currently no restriction on the number of times a Work Permit can be extended.	It is expected that the upcoming implementing Decrees and Circulars will clarify if this change means foreign nationals may only work in Vietnam for a maximum of four years (i.e., the initial two years plus an additional two years’ extension), or if they will need to apply for a new Work Permit after they have completed the one-time extension.

Impact

The proposed immigration law amendments are likely to provide more flexibility for foreign nationals and save costs for companies. This demonstrates the government’s continued aim to welcome foreign nationals to Vietnam and promote economic development within the country.

Background

The below depicts the history and future plans for the proposed amendments and new labor law:

Looking ahead

It is expected that Decree and Circulars implementing the Labor Code will be issued in 2020. Fragomen will issue an alert with more information when they are published.

We worked closely with Resident Vietnam in Vietnam to prepare this alert. It is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].

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