Vietnam: Managing the Growing Demand for Business Travelers and Short Term Assignees
September 17, 2015
Country / Territory
Related offices
Share
By: Steven An
Perched along one of the world’s main shipping routes, with a young and growing population and an inexpensive labor force, Vietnam is seen by many as Asia’s next tiger economy. In light of its growing potential, over half of the US Fortune 100 companies have established a presence in the country, with recent foreign investment flowing in from multi-national corporations such as Samsung Electronics Co. and Intel Corp.
As foreign investment increases, the demand for business travelers and short term assignees to Vietnam also increases – a trend we are seeing with many of our clients. As a result, the facilitation and management of this population have become increasingly important issues for the global operations of many businesses. However, this is an area that continues to cause a great deal of confusion amongst companies, business travellers and short term assignees alike.
Visa requirements
One of the most common questions we are asked is: Do our employees still need a visa to enter Vietnam for business activities if they hold a passport eligible for a visa waiver?
This question is much more complex than it appears on the surface. To understand this, we must first take a step back. In Vietnam, there are two separate requirements for foreign nationals wishing to enter Vietnam for business or work purposes:
- The visa requirement which states that the foreign national must hold a valid visa to enter and exit Vietnam; and
- The work authorization requirements which state a foreign national must hold a valid work permit to work in Vietnam.
The first question that needs to be addressed is whether the employee will require a work permit. Under the regulations, a work permit will be required if the duration of their stay is greater than three months and the foreign national intends to conduct productive and hands-on work in Vietnam, unless a work permit exemption (WPE) is obtained. For stays of less than three months, a business visa is required with the possibility of a WPE also being required, depending on the nature of the proposed activities whilst in the country.
A WPE is available under a number of categories. However, a recurring theme in Vietnam is the inconsistency between the legislation and its practical implementation by the local bodies. In our experience over the past year, some provinces have decided to exercise their discretionary power not to issue WPEs at all, whereas other provinces have limited this to the following two categories:
- Foreign nationals who are reassigned within enterprises in the 11 service industries outlined in the commitment on services between Vietnam and the World Trade Organization. This can be valid for up to two years and can replace the need for a work permit; and
- Foreign nationals entering Vietnam for a period of less than three months to resolve a technologically complex situation that cannot be completed by a Vietnamese national or foreign experts in the country at the time.
As such, the eligibility to apply for a WPE must be assessed on a case-by-case basis in consultation with the local labor office in the location where the foreign national will predominantly be based.
Only when both a work permit and a WPE are not required can we then consider if the foreign national requires a visa. If they do not hold an eligible passport (for a visa waiver), then they will require a business visa to enter and exit Vietnam. However, ironically, the analysis becomes much more complicated if they do hold an eligible passport.
So what exactly is a visa waiver?
This is an agreement between Vietnam and a second country, allowing passport holders to make a single entry into Vietnam for a specified duration without the need for a visa. The length of stay allowed differs depending on the originating country, but is generally between 15 to 30 days. The visa waiver system is largely unregulated, with the only requirements being the following:
- The visa-free entry is made more than 30 days from the last exit from Vietnam, regardless of the type of visa used for the last entry; and
- The foreign national’s passport has more than six months’ validity remaining.
However, the regulations do not specify the activities allowed on visa waiver status and it is left up to the implementing authorities to interpret the visa requirement. This has led to a highly discretionary implementation of the policy. As such, a visa waiver application must be assessed on a case-by-case basis in consultation with the local authorities, which must take into account a number of factors, including the nationality of the employee; the location in Vietnam; the duration of stay; the intended activities; and the timeline involved.
Why is compliance so important?
The work permit, work permit exemptions and business visa must all be sponsored by a local host entity in Vietnam.
Non-compliance with regulations for foreign workers can lead to financial penalties and the suspension of an offending company’s operations for up to three months. It may also affect the ability of a company to sponsor future business travelers and short term assignees into Vietnam. This can be very detrimental and costly for businesses.
How can companies mitigate the risks of non-compliance?
Given the complexities of the regulations relating to business travelers and short term assignees in Vietnam, it is crucial that companies work with their immigration service providers to develop a tailored global immigration program and compliance framework to better facilitate the movement of their foreign workforce.
This article is for information purposes only. If you have any questions, please do not hesitate to speak with your Fragomen global immigration professional at Fragomen or contact us via email at [email protected].
