IMPACT – MEDIUM
What is the change? Labor authorities in Ho Chi Minh City have imposed a stricter rule requiring that work permit validity cannot exceed the expiration date on the sponsoring company’s business license.
What does the change mean? Foreign nationals applying to work in Ho Chi Minh City will be issued work permits that are valid for a maximum of two years, or the time remaining on a sponsor’s business license if it is less than two years.
Background: The rule described above previously applied at the immigration authorities to temporary residence cards and visas, but up until now, labor authorities were more flexible when it came to work permits. They would normally issue a work permit with a two-year validity period, even when a sponsor’s business license was set to expire in that time period. That practice changed this month, however, and authorities in Ho Chi Minh City have grown increasingly strict about tying work permit validity to the business license expiration date.
BAL Analysis: The change may have a limited impact on companies with operations in Vietnam that are usually given business licenses that do not expire for several years. Others, such as representative offices and project offices, however, are normally issued business licenses that are valid for a much shorter time period and may be more affected by the change. Sponsoring companies may wish to renew their business license to ensure that foreign workers are given as much time on their work permit as possible. The business license renewal process usually takes two months, but sometimes longer.
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.
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