Social Insurance For Foreigner in Vietnam – News Regulation From 2018

Compulsory social insurance 2018

Social Insurance For Foreigner in Vietnam – News Regulation From 2018

A Vietnamese regulation that forces foreign workers to contribute social insurance 2018 here will result in additional costs for employees and employers, and double taxation of income, said the European Chamber of Commerce in Vietnam (Eurocham) in the White Book 2018.

Compulsory social insurance 2018

Compulsory social insurance 2018

The 2014 Law on Social Insurance stipulates that foreign nationals who have work permits, or practicing certificates or licenses in Vietnam are subject to compulsory social insurance contributions as form January 1, 2018. According to a draft Government decree on compulsory social insurance for foreigner working in Vietnam, foreigner workers will have to take part in all the five social insurance 2018 regimes:

  1. Death.
  2. Maternity.
  3. Retirement.
  4. Pension and sickness.
  5. Occupational accidents.

The draft decree provides two options:

  1. All of the insurance regimes will be appliacable from January 1, 2018.
  2. Or else, the regimes for sickness, maternity, occupational accidents will be made compulsory from January 1, 2018 and the remainder from January 1, 2020.

Eurocham said there are still many impractical provisions in the draft decree. According to Eurocham, a certain number of foreigner workers in Vietnam still maintain social security contributions in their home countries or enter the voluntary health care programs. For such cases, the contribution to statutory social and health insurance will result in additional costs for employees and employers. “Vietnam has got signed any bilateral agreements on social insurance with other countries. The enforcement of contributing to health insurance for foreign nationals without signing the totalization agreement with any countries shall result in double taxation of income with respect to social security taxes,” said Eurocham in the White Book.

In addition, the regimes for retirement and death are unnecessary for foreigners who mainly work in Vietnam for short terms. According to the draft decree, foreigner workers can ask for one-time social insurance returns before they go back home. However, the procedures may be time-consuming, the resulting in additional costs for all related parties. This will reduce the regional competitiveness of Vietnam, which already has the highest social insurance 2018 contribution rate in Southeast Asia. Eurocham suggested that contribution to social insurance for non-Vietnamese employees should be optional for cases where foreign nationals working in Vietnam can prove that they are maintaining a private health care program or the continuance of social security in their home countries. The Government of Vietnam should consider signing totalization agreements with several nations for the purpose of avoiding double taxation of income with respect to social security taxes.

There should be an accountable legal framework and a transparent policy on the entitlement to social insurance 2018 benefits when these workers go back home after the completion of a Vietnam assignment.

 

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Social Insurance 2018 - News Updated For Foreign Worker
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Social Insurance 2018 - News Updated For Foreign Worker
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Compulsory Social Insurance 2018: A Vietnamese regulation that forces foreign workers to contribute social insurance here will result in additional costs...
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VIVA Business Consulting
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