Vietnam-based representative office of a foreign investor means a dependent unit, a lawful office in Vietnam, allowed to recruit staff to manage and promote sale contracts with local business partners, research and develop products, seeking opportunities for the purchase or sale of goods and provision of services. A foreign representative office is a simple form of investment in Vietnam to enhance business from overseas, with multiple advantages while fewer risks regarding the required business compliance procedures such as investment capital, tax, accounting, and auditing. And it is easy to be extended or terminated or dissolved. The expatriate employees who work for representative office can obtain work permit and two years multiple visa (temporary residence card) for themselves and their family in Vietnam.
Foreign representative offices or Foreign Invested Company in Vietnam should comply with the compulsory procedure in managing and recruiting Vietnamese employees to avoid any potential risks relating to internal labor management.
The new Decree 75/2014/ND-CP which took effect on September 15th 2014 detailing the compulsory procedure for recruiting Vietnamese employees working for foreign employers, including foreign representative office in Vietnam as follows:
- Step 1. When there is a need to recruit Vietnamese employees, a foreign employer must submit a request for recruiting Vietnamese employees to Vietnamese employee recruiting agencies. The request must specify requirements for the recruiting positions: quantity, professional qualifications, foreign language qualifications, deadline, rights and duties of Vietnamese employees and the foreign employers during the employment and upon the resignation for each recruiting position.
- Step 2. Within 15 (fifteen) working days, since the receipt of the request of a foreign employer, the Vietnamese employee recruiting agency has the responsibility to select and introduce Vietnamese employees at the request of the foreign employers.
- Step 3. When the time limit prescribed at Clause 2 of this Article is expired, the Vietnamese employee recruiting agencies cannot select and introduce any Vietnamese employee at the request of the foreign employer, the foreign employer has the right to directly recruit Vietnamese employees.
- Step 4. Within 07 (seven) working days after the signing of a labor contract with a Vietnamese employee, foreign employers must inform in writing and enclose a copy of the labor contract to Vietnamese employee recruiting agencies.
IN ADDITION, THE COST INCURRED RELATED TO THE RECRUITMENT WILL BE CALCULATED AS FOLLOWS
In case the employees were successfully introduced by headhunting agencies:
- Employees obtaining University degree or higher: 20% worth of 1 month salary stated in the labor contract.
- Employees obtaining college degree or higher: 15% worth of 1 month salary stated in the labor contract.
- Employees obtaining intermediate degree or higher: 10% worth of 1 month salary stated in the labor contract.
In case the employees were recruited directly by the company as mentioned in step 3:
- 1 month 5% wage on labor contracts.
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Read more:
- Three key points on salary and compulsory insurance
- Foreign employees in Vietnam – what you need to know
- Vietnam work permit for foreigners – what you need to know
- Temporary residence card in Vietnam – what you need to know
- The proactive management of wage labor compliance procedure
- Full compliance procedures for foreigners who are working in Vietnam
- Chief of representative office or head of branch in Vietnam – role and responsibility
- Foreign representative office in Vietnam – full service for local compliance procedures
