Resident organizations of Vietnam, including a JVC or EFOC, are entitled to use foreign currency for the following purposes:

• making payments to foreign countries/partners for imported goods;

• paying for good or services from domestic organizations that are allowed to collect foreign currency;

• paying domestic foreign currency loans and foreign loans;

• selling to credit organizations allowed to carry out foreign exchange activities;

• purchasing financial instruments denominated in foreign currency;

• converting into instruments of payment in foreign currency in accordance with the law;

• transferring foreign currency investment capital abroad; and

• paying salaries of foreigners working in, amongst others, enterprises with foreign investment.

Similarly, non-residents may use foreign currency for:

• making payments to foreign countries/partners for imported goods;

• paying for good or services from domestic organizations that are allowed to collect foreign currency;

• selling to credit organizations allowed to carry out foreign exchange activities;

• converting into instruments of payment in foreign currency in accordance with the law;

• remitting foreign currency abroad;

• withdrawing cash in foreign currency and transferring to bank accounts for the purposes of paying expenses of individuals working in the organization when they are sent abroad, paying salaries, bonuses and allowances to residents and non-residents who are foreigners working for the non-resident organization;

• withdrawing cash in foreign currency for other purposes provided for by the law;

• transferring to foreign currency accounts of other non-residents; and

• giving gifts, donating, and bequeathing in accordance with the law.

Daily spot exchange rates are announced by the State Bank based on the average rate on the interbank market from the day before. The other banks must then trade within 0.1% of this official rate.

Relevant legal instruments include:

• Decision No.64/1999/QD-NHNN& dated 25 February 1999 (Decision No.64)

Both Vietnamese citizens and expatriates in Vietnam are subject to the Labor Code of the Socialist Republic of Vietnam. The Labor Code and its accompanying implementing regulations are the first port of call on issues such as salary, wages, labor contracts, working hours, recruitment, safety regulations, equal opportunity, and training.

You are allowed to employ any Vietnamese person over the age of 18. As a first step, employees should be sourced through a recruitment agency, but if the recruitment agency cannot satisfy your needs, then direct employment is permitted.

A ready and willing workforce is waiting for you in Vietnam. Vietnam’s large population is predominantly young and literacy is over 80%, which compares very favorably with other countries in the region.

The minimum wage is US$30-45 per month, depending on the location of your investment. Obviously, pay rates will rise from this level with increasing skills.

You may also employ foreigners to work in Vietnam. In general, foreigners do require a work permit, but the following individuals do not:

• Members of the Board of Management

• The General Director of a JVC

• The Deputy General Director of a JVC

• The Director and Deputy Director of other foreign invested enterprises

• The Chief Representative of a representative office and

• The Head of a Branch.

The body responsible for issuing work permits is Services of Labor, War Invalids, and Social Affairs. If you are operating in an industrial zone, then the zone authority may be the appropriate body.

• The proscribed application form;

• A copy of the employer’s certificate of business registration, establishment of operation license, or license to establish a branch or representative office;

• A statement from the competent State Authority permitting the employer to recruit foreigners; and

• A copy of the labor contract signed with the employee or written evidence of the decision to transfer the employee to Vietnam.

• The proscribed application form;

• A copy of the employees criminal record;

• Copies of any university diplomas or certificates that testify to the employees skill levels;

• A health certificate from a hospital given within the last 6 months;

• A curriculum vitae; and

• 3 color photographs.

Your expatriate employees will be subject to Vietnamese tax laws if they are deemed to be a resident for taxation purposes. In general a person who resides for more than 183 days a year in Vietnam will be deemed to be a resident for tax purposes. If you are here for over 30 days but less than 183 days, you are taxed at a flat rate of 10% on your Vietnam sourced income. There are a number of threshold brackets that mean that expatriates pay a lower effective tax rate than Vietnamese.

Vietnam has and is still negotiating a number of double taxation agreements with foreign governments, to ensure that foreigners are not unfairly penalized for working in Vietnam. At last count there were 41 such agreements either signed or in negotiation.

In an effort to increase the skill base in Vietnam, we ask employers who employ foreigners to train appropriate Vietnamese citizens to take on their roles over time. To this end work permits are for a 3 year maximum, with an option to renew for another 3 years.

Bilateral Trade Treaties