The Vietnamese government has issued a new regulation Decree 143/2018 ND-CP regarding mandatory social insurance for foreigners in Vietnam. This regulation came into force on December 1, 2018. Decree 143 provides guidance on the required social insurance for foreign employees working in Vietnam.
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In this guide, Cekindo will tell you everything you should know about Decree 143.
For foreign employees to be eligible for the compulsory social insurance, they have to meet the following criteria:
- They work in Vietnam with indefinite term labour contracts, or definite term labour contracts. The definite term labour contract must have a minimum of one year duration with a Vietnamese employer
- They possess a work permit, a practicing license or a practicing certificate
Foreign employees with either one of the circumstances will not be qualified for the compulsory social insurance:
- They are intra-corporate transferees.
- They have reached the retirement age: 55 years 4 months for females and 60 years 3 months for males (2022 updated).
Foreign employees who are qualified for compulsory social insurance in Vietnam will be covered under six benefit regimes: maternity, illness, retirement, labor accidents and occupational diseases, retirement, and survivorship.
Rates of Contribution
The new rates of the contribution of compulsory social insurance for foreign employees will be the same as those for Vietnamese employees:
- Foreign employees: 8%
- Employer: 17.5%
Take note of some law updates related to labor cost starting from July 2022 as below:
Based on Decree 38/2022/ND-CP :
- The minimum wage in urban city of Vietnam will be increased from 4,420,000 VND/month (US$190) to 4,680,000 VND/month (US$201,05), an increase of 240,000 VND and valid from July 1st, 2022.
- Social Insurance and Health Insurance Cap (20 times of minimum wage) is 32,000,000 VND/month (US$1,370). Some employees having higher salaries than the Social Insurance and Health Insurance Cap will increase the Social Insurance Contribution.
Amendments of Work Permit
The government of Vietnam issued Decree 140/2018 ND-CP on October 8, 2018, to revise the decrees regarding provisions regarding work permits and foreigner’s work permit exemption in Vietnam. Here are some of the important changes that you need to know:
Plan for Foreign Labour Usage
- Foreigners must submit the written request of approval for foreign labour usage plan to the provincial people’s committee, but not the president of the people’s committee.
- A foreign employee is not required to request the approval of plan for foreign labour usage when he/she is a representative office’s chief representative, an international organization’s or a non-governmental organization’s head of a project office, or a foreign diplomatic member’s relative in Vietnam who is allowed to work in Vietnam.
Work Permit Certificate Exemption
- A work permit is not required when a foreigner is responsible for making a commercial presence in Vietnam. However, it is necessary for the foreigner to obtain a work permit certificate exemption.
- A foreign diplomatic member’s relative in Vietnam who is allowed to work in Vietnam is not required to get a work permit certificate exemption.
Work Permit Application
- Notarisation is no longer necessary for foreign employee’s passport photocopy, passport substitute, or other international licenses.
- The authority will issue the work permit for successful applicants in five business days instead of seven business specified in the previous decree, upon receiving the complete and accurate application.
- For an employer with the headquarters in a city/province but with branches or representative offices in another city/province, the employer is able to apply for a work permit at the Vietnamese Ministry of Labour, War Invalids and Social Affairs.
Outsource Payroll to Cekindo
Many enterprises, especially small businesses, would want to spend their valuable time on core business activities such as marketing, technology, and sales — rather than tedious and time-consuming administration tasks like payroll and keeping up with the latest changes in regulations related to payroll, insurance, and tax in Vietnam.
Therefore, in order to ensure you have time to grow your business, outsourcing your payroll to a reliable partner like Cekindo makes a lot of sense. Cekindo is committed to providing exceptional service and creating a sustainable competitive advantage in the thriving business environment in Vietnam.
Our payroll outsourcing services include monthly payroll calculation, monthly payslips and reporting, medical and social insurance calculation, and personal income tax declaration and assessment.
Get in touch to know more about our payroll services by filling in the form below.