Economic & Business Laws — Vietnam

Economic and Business Laws for Immigrants to Vietnam

*Disclaimer: Vietnamese law changes frequently, and enforcement can vary by locality. This overview reflects general rules as of recent years — always verify with a licensed Vietnamese immigration lawyer, the Ministry of Labour, Invalids and Social Affairs (MOLISA), and the Department of Planning and Investment (DPI) before making decisions.*

1. Right to Work by Visa Type

Vietnam distinguishes clearly between visa type, temporary residence status, and the separate work permit (Giấy phép lao động) requirement.

Visa Categories Relevant to Work

• LD1/LD2 visas – Issued specifically to foreign workers; LD2 for those exempt from work permits, LD1 for those who submitted exemption confirmation documents.
• DT1–DT4 visas – For investors, with duration scaled to capital contribution (DT1 for largest investors, up to 5 years).
• DN1/DN2 visas – For business/enterprise representatives.
• TT visa – Dependent visa (spouse/children of workers or residents); generally does not grant automatic work rights — a separate work permit is still needed.
• Tourist (DL) visas – Working is illegal; violators face fines and deportation.

Work Permit Requirement

• Most foreigners need a work permit valid up to 2 years, renewable once, then requiring reapplication.
• Exemptions include:
• Capital-contributing owners/members of a Vietnamese company above a certain threshold.
• Intra-company transferees to a foreign-invested company's Vietnam branch (in specific sectors, per WTO commitments).
• Certain teachers, volunteers, and short-term experts (under 30 days, limited to 3 times/year).
• Employers must generally prove the position cannot be filled by a Vietnamese worker (labor market test/advertisement requirement), except for exempted categories.
• Work permit applications require: criminal record check (from home country and Vietnam if resident >6 months), health certificate, degree/experience verification (often requiring legalization and consular authentication), and employer sponsorship.

2. Starting a Business as a Foreigner

Business Structure Options

• 100% Foreign-Owned Enterprise (FOE) – Allowed in most sectors; requires an Investment Registration Certificate (IRC) plus Enterprise Registration Certificate (ERC).
• Joint Venture – With a Vietnamese partner; sometimes mandatory in restricted sectors (e.g., advertising, certain logistics services).
• Representative Office – Cannot conduct direct profit-making activities; only market research/liaison.
• Branch Office – Limited to specific sectors (banking, law, some trading).

Process Overview

• Obtain Investment Registration Certificate (IRC) — typically 15 business days if straightforward.
• Obtain Enterprise Registration Certificate (ERC) — typically 3–5 business days after IRC.
• Register tax code, e-invoicing, seal, and bank account.
• Register minimum charter capital (varies by sector; no universal minimum, but capital must be "sufficient" for the proposed business — customs, real estate, and finance sectors have specific minimums).

Practical Considerations

• Business lines are checked against Vietnam's Conditional Business List and WTO/CPTPP/EVFTA schedules of commitments to determine foreign ownership limits.
• Local nominee arrangements (Vietnamese "standing in" for foreign owners) are illegal and carry serious legal risk, despite being common in informal advice.

3. Foreign Investment Restrictions

Sector-Specific Caps

• Banking: Foreign ownership capped at 30% of a Vietnamese bank's charter capital (individual foreign investor cap typically 5-15% depending on category); strategic investors sometimes permitted higher stakes with government approval.
• Real estate: Foreign entities can develop but face restrictions on land use rights (see Section 4).
• Telecommunications: Caps ranging from 49%–65% depending on sub-sector and whether infrastructure-based.
• Advertising: Must be a joint venture with a Vietnamese partner.
• Logistics/distribution: Some restrictions eased under CPTPP/EVFTA but retail distribution of certain goods (rice, sugar, tobacco) still restricted.
• Education, healthcare: Permitted but subject to specific conditional licensing.
• Agriculture, fisheries with land use: Often require joint ventures due to land ownership restrictions.

Prohibited/Restricted Sectors

• National defense, security-related industries.
• Certain media and publishing (barred to 100% foreign ownership).
• Some professional services (law, requires Vietnamese-licensed lawyer partnership in certain capacities).

Approval Requirements

• Investments in conditional sectors or above certain thresholds may require approval from provincial People's Committee or, for larger/strategic projects, the Prime Minister/National Assembly.

4. Property Ownership Rights for Non-Citizens/Residents

Land

• Foreigners cannot own land — all land in Vietnam is state-owned; individuals/entities hold land use rights (LUR), not freehold title.
• Foreign investors can obtain long-term leases (typically up to 50 years, renewable, up to 70 years in some economic zones) for business/industrial purposes.

Residential Property (Apartments/Housing)

Under the 2014 Law on Residential Housing (updated by 2023 Housing Law effective August 2024):

• Foreign individuals with a valid visa/entry permit can buy residential property (apartments and, since 2015, some landed houses) in commercial housing projects.
• Caps: Foreigners can own no more than:
• 30% of units in any single apartment building/condominium.
• 250 landed houses per ward/commune-level administrative area (villas, townhouses).
• Ownership term: Limited to 50 years, renewable once for another 50 years — unlike Vietnamese citizens who have indefinite ownership.
• Property must be in a project approved for foreign ownership — not all developments qualify.
• Foreigners cannot buy property in designated national defense/security zones.

Permanent Residents

• Even Vietnamese permanent residence card holders (a rare status, mostly for ethnic Vietnamese returnees, spouses of citizens, or those with special contributions) generally still fall under the same foreign ownership caps for land, though may have expanded rights in specific circumstances (e.g., spouses of Vietnamese citizens may hold housing rights similar to citizens if jointly owned).

5. Banking Access for New Immigrants

Opening Accounts

• Foreigners with valid visa/temporary residence card (TRC) of at least 3–6 months validity (requirements vary by bank) can generally open:
• Personal checking/savings accounts (VND-denominated).
• Foreign currency accounts in limited circumstances.
• Common required documents: passport, valid visa/TRC, proof of address (rental contract or hotel booking), sometimes employer confirmation letter.
• Major banks accustomed to foreigners: Vietcombank, HSBC Vietnam, Standard Chartered Vietnam, ANZ (retail exited but some services remain), Techcombank, ACB.

Practical Notes

• Online-only account opening for foreigners remains limited; in-person visits typically required.
• Credit history from abroad doesn't transfer, so foreigners often start with only debit services; credit cards may require a cash deposit/collateral initially.
• Salary accounts are usually set up by employers directly with partner banks for work-permit holders.
• Sending money abroad (remittances) is regulated — banks require supporting documents (labor contract, tax paid confirmation) for outward transfers above certain thresholds.

6. Labor Law Protections for Immigrant Workers

Vietnam Labor Code 2019 (Effective 2021) Coverage

• Foreign workers with valid work permits are covered by most Labor Code protections:
• Minimum wage (regional, set annually — as of recent years, ranges roughly VND 3.25–4.96 million/month depending on region, though foreign professional roles are usually well above minimum).
• Maximum working hours: 8 hours/day, 48 hours/week standard (some flexibility via agreement).
• Annual leave: Minimum 12 days paid leave/year (increases with tenure).
• Social insurance: Mandatory contributions apply to foreign workers under a labor contract of 1+ year duration — since 2022, foreign workers contribute to *pension and death gratuity funds* similarly to Vietnamese employees (in addition to earlier-required sickness/maternity/work accident insurance from 2018).
• Termination protections: Notice periods (typically 30–45 days depending on contract type) and severance pay rules apply.
• Union rights: Foreign workers cannot hold leadership positions in Vietnamese trade unions but can generally join for support/protection purposes (practical access varies).

Contract Requirements

• Labor contracts must be in writing, and for foreign workers, ideally bilingual (Vietnamese governs legally).
• Contract term is generally tied to the work permit validity (cannot exceed it).

Common Risk Areas

• Illegal work (tourist visa working, expired work permits) voids labor protections and exposes the worker to deportation and fines, and the employer to penalties.
• Disputes are handled through labor conciliation, then Vietnamese courts — foreign workers have standing to sue, but the process is in Vietnamese and can be slow; specialized labor lawyers are recommended.
• Social insurance withdrawal upon departure has specific procedures (lump-sum payout possible after leaving Vietnam permanently, subject to rules).

Key Takeaways & Recommendations

• Always separate the visa question from the work permit question — many immigrants mistakenly assume a business/investor visa alone permits employment.
• Verify sector-specific foreign ownership caps before committing capital; WTO/FTA commitments are being liberalized but vary widely by industry.
• Property purchases must be in eligible projects — request the developer's foreign ownership quota certificate before signing.
• Engage a licensed Vietnamese law firm for business registration and property transactions; unofficial nominee/local-partner shortcuts carry serious legal exposure.
• Confirm current thresholds and caps (minimum wage, ownership percentages, work permit exemption criteria) via MOLISA, the Ministry of Planning and Investment, and the State Bank of Vietnam, as these are revised periodically.

More about immigrating to Vietnam