IMPACT – LOW
What is the change? Foreign contractors registered as “operating offices” in Vietnam in one of 11 designated sectors are now eligible for work-permit exemptions for intracompany transfers, assuming they fulfill all other criteria to obtain the required work-permit exemption certificate.
What does the change mean? The types of entities eligible for work-permit exemptions have been expanded to include “operating offices.” The designation of “operating office” applies to certain foreign contractors licensed to carry out work after issuance of a contractor permit.
Background: The Ministry of Industry and Trade issued Circular 35 on Dec. 28 to replace a previous circular and provide additional guidance on work-permit exemptions. The circulars stipulate procedures for foreign workers of entities in 11 service sectors designated as exempt from work permits under Vietnam’s commitments with the World Trade Organization.
The 11 sectors are: business services, communications services, construction and related engineering services, distribution services, educational services, environmental service, financial service, health and social services, tourism and travel services, recreational/cultural/sporting services, and transportation services.
To qualify for the exemption, the intracompany transferee must hold a managerial position or be an expert, specialist or technician who has worked for the foreign company for at least 12 months before being transferred to Vietnam. The local host entity must hold the appropriate industry sector code on their business, representative office or operating office license and the company sending the assignee must have direct affiliation with the local host entity.
BAL Analysis: Companies licensed as operating offices in certain service sectors will benefit from the work permit exemption.
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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