IMPACT – HIGH

What is the change? The Ministry of Labour – Invalids and Social Affairs (MOLISA) has issued a long-awaited decree which reforms the rules for issuance of work permits for foreign employees.

What does the change mean? Among the key changes, foreign employees will be exempt from work permits for assignments up to 30 days and not exceeding a cumulative total of 90 days per year, but foreign experts applying for work permits must meet higher qualifications criteria.

  • Implementation time frame: April 1.
  • Visas/permits affected: Work Permits.
  • Who is affected: Companies employing or assigning foreign employees in Vietnam.
  • Impact on processing times: The Labor Department will issue work permits within seven working days (from current 10 working days).
  • Business impact: Sponsoring companies should have a reduced documentary burden.
  • Next steps: Companies should be aware of the new rules and update their policies and documentation for work permit applications. A guidance circular is expected to provide greater detail on procedures.

Background: Below are the key changes that will take effect April 1.

Short-term work exemption

  • Exemptions from work permits will be allowed for short-term assignments of less than 30 days for each stay, but not exceeding a total of 90 days per year. Employers will neither need to include exempt employees in their foreign labor demand reports nor request a work permit exemption confirmation.

Processing times

  • Work permits will be processed in seven working days.

Qualifications

  • Foreign nationals who are experts and specialists must now have a university degree AND three years of work testimonial to be eligible to apply for a work permit.
  • Position approval confirmation will generally not be requested as part of the required document for a work permit application. However companies are still requested to regularly report their foreign labor needs.

Health and police certificates

  • Health certificates will be recognized for 12 months from the date of issue (instead of the current six months).
  • Non-criminal certificates must be issued overseas to certify a foreign national has a clean record. If the foreign national has resided in Vietnam, a local police record must be issued by authorities in Vietnam. The decree does not indicate a minimum period of residence that would trigger a local police record, and the labor departments may continue to request local non-criminal certificates as soon as an applicant has an entry stamp in his or her passport.

Renewals

  • Applicants seeking to renew their work permits – including managers and executives – must fulfill the new, stricter qualifications.
  • Renewal applications for work permits will be accepted up to 45 days prior to expiration of the current permit (instead of the current 15 days).
  • Work permit amendments in the event of a change of job or change of employer will require fewer documents.

Cancelation

  • A sponsoring company may request and receive a work permit revocation from the Labor Department when a foreign worker’s employment ceases.

BAL Analysis: The decree simplifies procedures and introduces the 30-day exemptions that will benefit employees on short-term assignments, but foreign employees must meet higher qualifications for work permits. Applicants who qualified with only a university degree under current rules and who seek to renew their work permits after April 1, will either have to provide a certificate from an overseas entity confirming their expertise or they will have to provide both a university degree and work testimonials showing experience in their related field or position.

This alert has been provided by the BAL Global Practice group and our network provider located in Vietnam. For additional information, please contact your BAL attorney.

Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.