FORMS OF SALARY PAYMENT FOR FOREIGN EMPLOYEES WORKING IN VIETNAM

Based on the Vietnam Labor Code 2019, the Law on Social Insurance 2024, and Decree No. 219/2025/ND-CP, the Ministry of Home Affairs has clarified the legal boundary between:

• Foreign employees working in Vietnam under a labor relationship, who are required to enter into a labor contract, receive salary payments, and participate in social insurance in Vietnam; and

• Foreign employees assigned to Vietnam under an intra-company transfer, where no labor relationship is established with the Vietnamese entity, and accordingly, salary payment is not required to be made in Vietnam and mandatory social insurance participation does not apply.

Through this newsletter, W&A provides an in-depth analysis of key issues that enterprises should carefully consider, including:

• Criteria for determining labor relationships, labor contracts, and salary obligations under the Vietnam Labor Code 2019;

• Legal conditions applicable to intra-company transferees under WTO commitments and Decree No. 219/2025/ND-CP;

• Required documentation and procedures for obtaining confirmation of exemption from work permit requirements;

• Legal implications regarding salary payment, social insurance obligations, and the risk of recharacterization of employment relationships during inspections or audits; and

• Practical compliance considerations to ensure consistency between workforce structure, remuneration mechanisms, and supporting legal documentation.

👉 Read the full newsletter here:

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RECOMMENDATION FROM W&A:

From a compliance perspective, enterprises must accurately determine the form of employment of foreign employees from the outset, and ensure consistency between the employment model, income payment mechanism and relevant legal documentation. Incorrect classification or inconsistent implementation may result in the recharacterisation of the labour relationship during inspections or audits, leading to additional obligations relating to labour, social insurance and taxation.

To assist enterprises in managing compliance risks and ensuring proper implementation, W&A provides advisory and procedural services for work permit applications and confirmations of work permit exemptions for foreign employees, including legal eligibility assessment, determination of the appropriate employment arrangement, preparation and submission of application dossiers, and liaison with competent authorities until completion.