FOREIGN INVESTOR, LEGAL REP AND CHIEF REP IN VIETNAM

THE LOCAL PROCEDURES IN VIETNAM | MANAGE AND PARTICIPATE IN THE COMPULSORY INSURANCES

According to The 2014 Law on Social Insurance foreigners working in Vietnam and possessing work permits, practice certificates, or licenses issued by competent Vietnamese authorities are fully subjected to compulsory social insurance from January 1, 2022. Total contribution of 26% to the social insurance fund,  based on their wage, allowances and other additional amounts stated in their labour contract.The foreign employee will have to pay 8%   while employer will have to pay 18%. The employee  shall be entitled to the one-off benefit entitlement provided – request to refund the contributed amounts in case of retirement, deadly diseases, discontinued residing in Vietnam…

The 2014 Law on Social Insurance adds three more groups of subjects to be covered by compulsory social insurance, among them, inclusive of foreigners working in Vietnam and possessing work permits, practice certificates, or licenses issued by competent Vietnamese authorities. It means that foreigners working in Vietnam with work permits or practice certificates or practice licenses granted by competent Vietnamese agencies will be covered by compulsory social insurance from January 1, 2018.

Specifically, the foreign employee will have to pay 8% of his/her monthly wage while his/her employer will have to pay 18% of the employee’s full pensionable wage, making a total contribution of 26% to the social insurance fund, based on their wage, allowances and other additional amounts stated in their labor contract.

Under Vietnamese law, the employees are also provided by their employer with information on the annual payment of social insurance premiums once every six months, and have their annual social insurance premium payment certified by the social insurance agency annually.

VIVA Business Consulting is offering free counsel and supporting to foreign investors and chief of representative office in Vietnam. Under our management, the any of your local required compliance procedures shall be reviewed and managed properly.

MANAGE AND PARTICIPATE IN THE COMPULSORY INSURANCES

1. Cases that the employees who are foreign nationals working in Vietnam shall be required to participate in the compulsory SI program.
2. Cases that the foreign employees referred above shall be excluded from participation in the compulsory social insurances.
3. If the insured employee who is currently entitled to monthly retirement pensions and SI benefits is not residing in Vietnam, he/she may authorize another person to receive these amounts. The one-off benefit payment in his/her wish shall be approved.
4. Manage your total compulsory social insurances contribution rates are 30%, consist of:
   • The employee side shall, on a monthly basis, make a total SI contribution accounting for 9,5% of monthly pay (8% into the retirement and death benefit fund and 1,5% into the sickness and parental insurance benefit fund)
   • The employer side shall, on a monthly basis, make a SI contribution accounting for 20,5% in proportion to the employee’s payroll in the SI payment month (14% into the retirement and death insurance benefit fund, 3% into the sickness and parental insurance benefit fund, 5% into the occupational accident and disease benefit fund, 3% into the health medical fund).

Other compliance procedures for Investor, legal REP and chief REP in Vietnam

• Other local procedures for foreigners in Vietnam
• Manage your work permit in Vietnam
• Manage your personal income tax and tax planning
• Professional employee profile and establish local employment relations
• One-off social insurance refund for foreign employees in Vietnam

Read more:

• Compulsory insurance in Vietnam: What you need to know
• Compulsory social insurance for foreign employees: new regulations from 2022
• Chief of representative office or head of branch in Vietnam: role and responsibility
• Temporary residence card in Vietnam: what you need to know
• Investment visa in Vietnam: type and time limits
• Managing labor relations for expats in Vietnam
• Work permit in Vietnam: regulations and guidance
• Expats in Vietnam: work permit exemption – revocation
• Investment in Vietnam: market entry procedures