Ray of Hope: Vietnam’s Resolution 105

From storm clouds to perhaps a ray of hope, there have been new developments regarding the work permit landscape in Vietnam. With these recently announced changes, it does appear that the authorities have heeded the feedback of the business community (with other economic factors at play as well) in removing some of the more onerous aspects of the labour decree.

 

Background

In February 2021, Vietnam’s Ministry of Labour, Invalids & Social Affairs (MOLISA) began to implement Decree 152, which almost completely overhauled the existing work permit regime. The decree made the work permit process much more challenging, with stricter adjudication and more discretion granted to the local Departments of Labour (DOLISAs). 

Decree 152 was also implemented during a strikingly different phase of Vietnam’s COVID-19 trajectory. At the time, Vietnam was still being hailed as one of the few success stories within the region (and the world) in its containment of COVID-19. Since that time, the COVID-19 situation has significantly worsened due to the rapid proliferation of the delta variant of the virus (which first hit the country in April 2021). Perhaps the most visible evidence that delta was breaking through the containment measures (other than the increasing number of cases) was the implementation of a strict lockdown in the main cities of Ho Chi Minh City and Hanoi in early July. The current outbreak has only just started to level off, but Vietnam is still reporting approximately 10,000 cases per day (as of late September).  Exacerbating the situation—and mirroring much of the situation in the rest of Southeast Asia—the vaccination rate during the delta outbreak remains low and only about one-third of the population has received at least one vaccine dose and less than 10% has been fully vaccinated.

That said, it is clear that the government is moving towards the relaxation of the most severe lockdown measures. As of 21 September 2021, for example, Hanoi has eased many of its lockdown restrictions and HCMC is looking to do the same from 1 October, although this could also be extended further. Indeed, Vietnam seems to be moving toward a system of even more localised restrictions moving forward, rather than nationwide and/or even city-wide lockdowns.

 

Economic impact of COVID-19

For a long time (particularly last year), Vietnam appeared to have weathered the worst of COVID-19 and was even one of the few countries in the region with an economy that actually grew in 2020 (albeit modestly). It looked set to continue that trend this year with an initially robust economic forecast, but its GDP growth rate has now been slashed due to the delta variant and the impacts of the lockdowns.

When Decree 152 was first implemented, the economic forecast remained upbeat and Vietnam still looked like a relatively safe bet for foreign investment. Vietnam was seen as an increasingly important player in the global supply chain, particularly in the manufacturing sector. In that sense, Decree 152 seemed to many to be a step in the wrong direction, given that it was a highly protectionist measure (but one that the government deemed necessary to shore up the domestic labour market). Despite extensive feedback and input from the business community and advocacy efforts, Decree 152 was not substantially altered in the months that followed.

 

Resolution 105

Five months since the implementation of Decree 152, many companies have had their operations disrupted in the country (and globally) due to the delta-induced lockdowns. It is under that backdrop that the government introduced Resolution 105 on 9 September 2021. Ostensibly announced to help businesses impacted by the COVID-19 lockdown measures, the Resolution also sought to ease the most onerous restrictions associated with Decree 152 by tasking MOLISA to instruct its local DOLISAs to relax some of the stricter standards put in place by Decree 152.

For instance, where Decree 152 mandated stricter adjudication of foreign nationals’ qualifications, Resolution 105 has tempered some of these requirements:

• • • Where Decree 152 required that the university degree be strictly related to the proposed job position in Vietnam, Resolution 105 provides the adjudicating officers with more flexibility in that regard. 
    • Where local DOLISAs were no longer accepting “Certificates of Completion” or “Certificates of Graduation” in lieu of a typical university degree certificate, Resolution 105 makes it clear that such documentation should be accepted.
    • Importantly, where the DOLISAs were interpreting Decree 152 to preclude the use of existing work permits (i.e., issued under the previous Labour Decree) as evidence of the applicant’s relevant experience, Resolution 105 indicates that such work permits can be accepted to prove such work experience for new work permit applications.

This is especially a relief to those foreign nationals who are currently in Vietnam and who are either renewing their work permits (i.e., applying for a new work permit under Decree 152) or changing employers in Vietnam. After Decree 152 was implemented, such foreign nationals would need to provide evidence of their previous work experience abroad (i.e., in the form of work experience certificates or letters). This requirement proved to be laborious, time-consuming and even impractical for many foreign nationals—particularly those who had been working in Vietnam for many years, as they would then have to contact former employers for whom they had not worked in a long time. 

Resolution 105 also provides flexibility to those who hold a work permit in one location in Vietnam but who wish to or need to work in another location. Before Decree 152, such individuals could do so by filing a “work location report” to the provincial labor authorities (i.e., of the province where the individual would be secondarily working). The DOLISAs had been interpreting Decree 152 as requiring separate work permits for both locations, but Resolution 105 reverts the rule to the previous position, provided that the secondary assignment is for a temporary period of up to 6 months.

 

Guarded optimism

Resolution 105 is certainly welcome news, particularly after all of the advocacy work that has been done regarding Decree 152 (and with the relatively high level of rejections under that decree). The new resolution demonstrates the government’s commitment to spurring economic growth in the midst of the pandemic-driven downturn. 

That said, it should be noted that, as with Decree 152, it remains unclear how each of the local DOLISAs will adhere to the spirit of Resolution 105. After five months of imposing their own localised standards under Decree 152, some DOLISAs may not be inclined to relax their requirements drastically or quickly. The implementation of Resolution 105 (just as the implementation of Decree 152) will still need to be reviewed on a case-by-case, province-by-province basis.

As a final word of caution, Resolution 105 has been issued under the auspices of the current pandemic situation in Vietnam. It is, therefore, unclear whether the relaxation of the standards set by Decree 152 are temporary in nature or if they could revert after the pandemic has been declared over by the government. It should be noted that Decree 152 has not been overturned and it is possible that the DOLISAs can revert back to the stricter standards in the future (and without notice), with even just the slightest shift back towards protectionism. 

 

Need to Know More?

For further information and advice on navigating the Vietnam immigration landscape and impacts of COVID-19, please contact Kenneth Lau at [email protected] or your Fragomen immigration professional. This blog was published on 7 October 2021, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please visit our dedicated COVID-19 site, subscribe to our alerts and follow us on LinkedIn, Twitter, Facebook and Instagram.