The Amended Law on Immigration for foreigners and the New Labor Code have been passed by the National Assembly of Vietnam and will take effect from 1 July 2020 and 1 January 2021 respectively. The changes concern new rules for who is entitled to a work permit exemption, the ability to renew work permits, procedures for changing visa types, and residence terms, amongst other matters.
The Amended Law on Immigration for foreigners and the New Labor Code have been passed by the National Assembly of Vietnam and will take effect from 1 July 2020 and 1 January 2021 respectively.1 The recent changes in the Amended Law on Immigration and the New Labor Code will affect the work and resident permit applications for foreign workers who come to work in Vietnam.
The number of foreign skilled workers coming to Vietnam has increased in recent years and is expected to increase considerably over the next few years. To enforce the management of foreign workers in Vietnam, a number of changes were introduced in the New Labour Code, which is expected to give the labour authorities more power to control and review the status of foreign workers employed by/at Vietnamese employers.
By contrast, the Amended Law on Immigration is expected to provide more convenience for foreign workers with valid work permits to apply for/transfer to resident permits in Vietnam.
These changes will require employers to review and update the current status of their foreign employees for work permit and immigration procedures and planning.
A foreign national married to a Vietnamese citizen is now exempt from a work permit. Therefore, the immediate sponsor for visa/temporary resident cards for the foreign national could be changed from the Vietnam organisation to the Vietnamese husband/wife of the foreign national. Regulations to be issued in due course should give guidance on this matter.
Foreign national owners or shareholding members of limited liability companies and shareholders being members of the board of directors of joint stock companies with a certain threshold of capital contributions are entitled to a work permit exemption. The government will provide further guidance on the threshold requirements in due course.
The term for a work permit is up to two years and under the new regulations can only be renewed once for a further two-year term.
This is a significant change. To date there has been no restriction on the number of times a work permit can be renewed. As a result of this change, it is understood that the foreign national must make a fresh work permit application based on his or her current role and requirement.
The KPMG International member firm in Vietnam believes this change has been implemented to give the labour authority more power to review the ongoing foreign worker requirement and to determine approval of the application.
No further detail has been released as to the impact of this change. However, it could result in increased administrative burden and cost relating to the employment of foreign workers.
Please note this will also affect those foreign workers who have already renewed their work permits at least once.
Currently if a visa needs to be changed to a different type/category, a foreign national needs to leave Vietnam and enter again under the new visa. This policy has been relaxed and a visa can be changed without the need to exit Vietnam in the following circumstances:
i. Being an investor or a representative of a foreign organisation investing in Vietnam;
ii. Being a parent, spouse, or child of the guarantor;
iii. Being invited or guaranteed to enter Vietnam for employment and granted a work permit or work permit exemption;
vi. Entering Vietnam under an e-visa and then being granted a work permit or work permit exemption.
The change above provides for a more efficient immigration procedure and also saves time/cost for the foreign national/Vietnam sponsors.
For foreign nationals coming from countries which Vietnam unilaterally granted visa-free entry, it is no longer required that the entry date must be at least 30 days from the previous exit.
The Amended Law on Immigration sets out a maximum residence term of 30 days for foreign tourists down from up to 90 days under their DL or tourist visa. However, foreign tourists may apply to extend their residency term if necessary and the relevant immigration authority will re-assess the immigration purpose of the tourist to determine whether approval to extend will be granted.
This change has been introduced to allow more efficient administration of foreign tourists in Vietnam as the authorities are aware that some foreign tourists are breaching immigration regulations and working while on a tourist visa. This could have a significant impact on casual labour.
1 Amended Law No. 51/2019/QH14 dated 25 November 2019 and Labour Code No. 45/2019/QH14 dated 20 November 2019.
* Please note that KPMG LLP (U.S.) does not provide any immigration services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.
The information contained in this newsletter was submitted by the KPMG International member firm in Vietnam.
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