New Labor Decree Relaxes Work Authorization Rules

The situation

A new decree issued by the Ministry of Labor Invalids and Social Affairs (MOLISA) has resulted in relaxed work authorization rules in Vietnam. The changes are effective immediately, though actual implementation may be delayed depending on the time it takes local labor authorities to adopt these changes into their current practice.

A closer look

• Notarization of passports no longer required. MOLISA will no longer require the notarization or certification of passports for foreign nationals for submission with their Work Permit applications, as was required by Decree 11, implemented in 2016. A clear scanned copy of the passport is now sufficient for this purpose.
  • Impact. Since there may be other documents that still require notarization or certification, such as a diploma or other educational certificate, the Work Permit processing time will likely not be affected, though the administrative processes would be reduced. There may be inconsistent application of this new rule in different locations. For example, the labor department in Ho Chi Minh City (HCMC) currently still requires a notarized copy of the foreign national’s passport.
     
• Cancellation of Work Permits no longer required. Employers no longer need to cancel their foreign employees’ Work Permits upon termination of their employment or assignment in Vietnam. Previously, Decree 11 made it mandatory for employers to cancel Work Permit cards and return them to the Labor Department.
  • Impact. While simplifying the process, this change may present issues for some employers as it may mean that former employees can continue to hold valid Work Permits tied to their companies even after they leave Vietnam. This can potentially create problems for a company should a former employee be subsequently found working in the country illegally using the unexpired Work Permit. To avoid this, labor authorities have advised host companies to collect their employees’ original Work Permit cards following the end of the assignment.
     
• Shorter processing time for Work Permit applications. According to the new decree, MOLISA will process all Work Permit applications within five business days of submission.
  • Impact. Though this processing time is a significant reduction from the current two- to three-week processing time, in practice, it is unlikely that MOLISA will strictly abide by this requirement.
     
• Work Permit exemption for incorporators. Foreign nationals responsible for incorporating or establishing a commercial entity in Vietnam are now exempt from obtaining a Work Permit or Work Permit exemption certificate, which is required for some categories of assignments and work activities and allows the foreign national to work without a Work Permit once MOLISA issues the certification.
  • Impact. Since the Work Permit exemption is granted in very exceptional cases, incorporators and others eligible for the exemption should still obtain a consular Business Visa to ensure compliance with immigration rules, as all foreign nationals entering Vietnam who seek to obtain a Work Permit must do. Those eligible for the exemption should therefore not enter under a tourist visa or visa-exempt status. As all foreign nationals under a Business Visa, workers eligible under this exemption must limit their work activities to less than 30 days per stay within a total cumulative period not exceeding 90 days per year.

Background

MOLISA is an administrative government branch in Vietnam that issues labor rules applicable to local and foreign workers. MOLISA’s rules impact various foreign workers’ requirements, such as documents needed for work authorization applications and exemption criteria.

Looking ahead

Although the changes are meant to simplify and streamline the work authorization and deregistration process, employers and foreign nationals should expect some variance in implementation as the labor authorities in different provinces start to adapt the new rules into their current practice during the initial transition period.

Many countries globally are working to streamline the work authorization process, such as in Indonesia, where a recent regulation was issued to complete a set of streamlined work authorization process rule changes; in China, where a streamlined work authorization application policy classifying foreign nationals into three categories was applied in April 2017; in Europe, where the EU Single Permit Directive requires EU Member States to consolidate residence and work authorization rules; and in Argentina, where and electronic system was developed that will simplify the work and residence authorization process.

Fragomen will monitor the situation and work closely with clients to ensure compliance at every step of the application process.

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].