How to start business in Vietnam How to start a business in Vietnam

INS Global offer a PEO service for businesses who wish to start their operations in Vietnam. When you use our service, your employee is legally employed by INS Global, exclusively on your behalf. We ensure compliancy with local labour laws and take care of the onboarding process and payroll. Our transparent, low-cost solution means that there’s no need to establish a costly subsidiary in Vietnam, your employee is hired and can get to work on your company’s growth in record time.

Table of contents

  • Introduction to Vietnam
  • Vietnam Public Holidays
  • Working hours
  • Overtime
  • Rest periods
  • Holiday entitlement
  • Termination/Severance
  • Vietnam work visa
  • Paying salary
  • Healthcare in Vietnam
  • Vietnam Tax
  • Why INS Global

Business environment in Vietnam

Vietnam, once one of the world’s poorest countries, is now a popular destination in Asia in which to do business. Compared to its neighbouring countries in the region, Vietnam offers investors a business friendly regulatory environment, a young skilled population and a strong economy. Sharing its border with Laos, Cambodia, and China, the country is set to becoming a developed nation by 2020. Over the last 30 years, economic growth has been skyrocketed and in 2019, the Vietnamese economy is set to record year-on-year growth of 6.7%. Vietnam also benefits from membership to organisations such as ASEAN and its coastline provide the country with direct access to some of the world’s busiest shipping routes.

Although there’s less red tape involved in hiring in Vietnam compared to other countries in southeast Asia, it is still advisable that businesses work with the correct partner to ensure that they remain compliant with local employment and business regulations.

Doing business in Vietnam: Things to know

Vietnam Public Holidays

Employees in Vietnam shall be entitled to 10 fully paid days off on the following public holidays.

  • Gregorian calendar New Year
  • Lunar New Year holidays
  • Victory Day
  • Labour Day
  • National Day
  • Hùng Kings’ Commemoration Day

Where the holidays referred to in Clause 1 of this Article coincide with a weekly day off, employees are entitled to take the following days off as compensation. Foreign employees in Vietnam are entitled to 1 traditional public holiday and 1 national day holiday of their home country, in addition to these public holidays.

Working hours

Working hours should be stated in the labour contract. Normal working hours shall not excel 8 hours per day or 48 hours per week. An employer has the right to determine the working hours on an hourly, daily or weekly basis, provided that the daily working hours shall not exceed 10 hours per day or 48 hours per week. The Vietnamese government encourages businesses to adopt a 40 hour working week.
For employees who carry out especially heavy or hazardous work, or who work under exposure to toxic substances, working hours shall not exceed 6 hours per day.

Overtime

An employee can work overtime only when:

  • Agreement has been made between the employer and employee.
  • Overtime does not exceed 50% of the normal working hours in 1 working day.

Rest periods in Vietnam

Employees in Vietnam are entitled to 24 consecutive hours off (1 day) either on Sunday or any other fixed day of the week. Weekly holidays must be clearly stipulated in the internal regulations of the company or collective labour agreements. In special circumstances where the employee is unable to take a weekly rest due to the nature of their work, the employer must ensure that the employee receives at least 4 days off per month.

Holiday entitlement

Minimal annual leave entitlement is outlined in Vietnamese labour law:

  • 12 days for employees who have worked for an employer for at least 12 months.
  • 14- 16 days for employees who working in heavy or hazardous working conditions, are exposed to toxic substances, or who work in an area with harsh living conditions.

Employees are entitled to take a fully paid leave of absence for personal reasons including their wedding, the wedding of their child, the death of a parent, spouse, son, daughter. Employees may also negotiate and agree on other periods of unpaid leave with their employer.

In addition to annual leave every year (12-16 days), employees are entitled to fully paid days off for Vietnamese public holidays, as listed above.

Termination/Severance

If the employer has reasonable and valid grounds to terminate the employment contract, the employer shall give at least 45 days’ notice in the case of an indefinite term employment contract and at least 30 days’ notice in the case of a definitive term employment contract.

If the employee wishes to terminate the contract during the probation period, they must give at least 24 hours’ notice.

Vietnam work visa

Work permit procedure:

  1. A written request for the work permit is made by the employer.
  2. Health certificate or medical examination report is obtained. This is issued by the foreign or Vietnamese authorised health organisations or agencies and is valid for 12 months from the date of issue.
  3. Passport notarisation
  4. Consular Notarisation of Criminal Record Check. If the foreign worker is a lawful resident in Vietnam, only the criminal record issued by the Vietnamese authorities is required. Otherwise, a criminal record check from the employee’s home country is also required. The candidate can do this in their home country and have it authenticated at the Embassy of the Vietnam.
  5. Written confirmation that the employee is a manager, chief executive officer, expert or technician. The confirmation must refer to at least 3 years of experience and undergo consular notarisation.
  6. Two recent colour pictures (4cm x 6cm, white background, frontal face, bareheaded and no colourful glasses). Photos must have been taken within 6 months of the application.
  7. Bachelor’s degree – Consular Authentication. The original must be taken to the consulate in your home country to be legalised before going to Vietnam.
  8. Demand of Foreign Labour Report submitted to DOLISA

After gathering these documents, INS Global submits your application to the Labour Department and await the outcome. The process normally takes around 2-3 months.

Paying salary

Salary is paid to the employee’s bank account on the date specified in the labour contract. Although the Vietnamese government do not specify a minimum salary required to be eligible for a working permit, the employee’s salary must follow Labour Law and be at least 4,180,000 dong per month.

Healthcare system in Vietnam

Basic healthcare is provided by the Vietnamese state healthcare system. Healthcare insurance among foreign workers is common but whether or not this is provided as a benefit is based on the agreement between the employer and employee.

Vietnam Tax

Employees will be registered and will receive a tax code with the Tax Department in Vietnam. Below is a table of taxable income and rates for personal income tax in Vietnam:

How to do business in Vietnam: How can INS Global help?

Taking your business to Vietnam? INS Global can help. Expansion into a new country can be time-consuming and involve unique risks including an unfamiliar regulatory environment, compliance with tax and employment laws, culture and language barriers. INS Global’s services offer you peace of mind when expanding into the Vietnamese market so you can focus on running your business.

The INS Global team can help you get to where you want to go. Contact us today to get your business up and running in Vietnam. Our expert advisers can help you identify the most appropriate avenues for growth, taking into account your company’s long-term development goals.

Vietnam: What can INS Global offer?

  1. Visa outsourcing for both foreigners and locals
  2. Payroll service
  3. Recruitment service

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