Professional Documents
Culture Documents
VN Tax Vietnam Doing Business 2020
VN Tax Vietnam Doing Business 2020
3
4 Doing business in Vietnam 2020. Investing in Vietnam, Engaging the world
INTRODUCTION
I
n more than 30 years of social- a centralized to a market oriented
economy and its 96.92 million-strong
Vietnam has moved from being population, which features a large
one of the poorest nations in the world and young workforce as well as
to a lower middle-income country an increase in disposable income
with a number of convincing social- in recent years. The Vietnamese
economic achievements. Joining the Government has done an excellent job
Association of Southeast Asian Nations
(ASEAN) in 1995
Economic Cooperation (APEC) in 1998 2.79 percent (2019).
and the World Trade Organisation
(WTO) in 2007; expanding gross This guidebook was prepared by the
domestic product (GDP); improving Foreign Investment Agency of
infrastructure; and a steady increase Vietnam in cooperation with Deloitte
in foreign direct investment (FDI) Vietnam to provide readers with an
suggest that Vietnam has transformed overview of the investment climate,
into an attractive investment forms of business organization,
destination. taxation, and business and accounting
practices in Vietnam. Although we do
Vietnam has been enjoying strong our best to ensure that information
economic growth. Since 1990, contained in this book is current at
the time of writing, the rapid changes
Vietnam’s GDP per capita growth has
in Vietnam mean that laws and
been among the fastest in the world,
regulations may change to reflect the
averaging 6.4 per cent a year in the
new conditions. We hope that you
2000s. Despite crisis and uncertainties
find this book useful in your endeavour
in the global environment, Vietnam’s
to expand your business in Vietnam.
economy continues to grow, with GDP
expanding by 7.02 per cent in 2019,
Ministry of Planning and
and is expected to continue on this path.
Investment of Vietnam
Foreign Investment Agency
Overseas businesses are increasingly
attracted by the country’s move from
5
A COUNTRY PROFILE
COUNTRY PROFILE
Vietnam’s economy continues its fast growth driven by free trade
agreements (FTAs) with major developed countries and increasingly
deregulated business environment.
VIETNAM
Strategically located at the centre of Southeast Asia with convenient
access to commodity and cultural exchange.
Competitive production
cost compared to Fast growing economy with
neighboring countries. GDP growth projected to be
between 6% to 7% during
2016-2019 period.
LAND AREA
330,967 sq. km
ECONOMY
Nominal GDP ( 2019): USD 261.9 billion
GDP in 2019 increase by 7.02%,
COASTLINE the highest growth since 2011
3,260 km GDP per capita (2019): USD 2739.82
7
POLITICAL STRUCTURE
Vietnam is a socialist country under the leadership of the Communist Party
of Vietnam. The 14th National Assembly of Vietnam (term 2016-2021) has
489
Assembly, which is the highest-level representative body of Vietnamese people,
has the power to exercise constitutional and legislative rights and to decide on
critical issues of the country.
5.0%
Industry &
4.5% Construction
4.0%
2018 2019
RETAIL SALES
(billion USD)
214 211
180
173
150 148 162 166
132 131
Japan 18%
China 40%
2018
Source: GSO
9
A COUNTRY PROFILE
- Decree No. 46/2014/ND-CP provides regulations on collection of land rent and water surface rent
- Circular No. 78/2014/TT-BTC guides the implementation of the Law on CIT
- Circular No. 103/2014/TT-BTC provides guidelines for fulfillment of tax liability of foreign entities doing business
in Vietnam or earning income in Vietnam
- Decree No. 118/2015/ND-CP provides guidelines for some articles of the Law on Investment
- Decree No. 96/2015/ND-CP provides guidelines for some articles of the Law on Enterprises
2015
- Decree No. 119/2018/ND-CP on electronic invoices for sale of goods and provision of services
- Decree No. 09/2018/ND-CP on trading activities of foreign investors
2018
- Decree No. 08/2018/ND-CP on business conditions under State management of the Ministry of Industry and
Trade
- Circular No. 25/2018/TT-BTC on amendments of some articles of Circular 78/2014/TT-BTC and Circular
111/2013/TT-BTC
- Resolution No. 50/NQ-TW on the direction of completing institutions and policies, improving the quality and
efficiency of foreign investment cooperation by 2030
- Resolution 23-NQ/TW on the national industry development strategy during 2018-2030
- Amended Law on Tax Administration No. 38/2019/QH14 (effective from 1 July 2020)
2019
- Decree No. 14/2019/ND-CP providing guidelines for the law on special sales tax
- Decree No. 05/2019/ND-CP provides a legal framework for the establishment and implementation of Internal Audit
- Circular No. 48/2019/TT-BTC on the making and settlement of provisions for devaluation of inventory, losses of
financial investments, bad debts and warranty at enterprises
- Draft amended Laws on Investment/Enterprises/Securities
economy forward. The 2016-2020 roadmap for the equitisation of SOEs has been
outlined in Decision No. 58/2016/QD-TTg.
220
NUMBER OF EQUITISED
SOES DURING 2011-2018
175
73
55
45
26 23
14
11
TRADE AND
INVESTMENT
12
Bilateral agreements
- Vietnam – Chile
- Vietnam – South Korea
- Vietnam – Japan
- Vietnam - Eurasian Economic
Union FTA
- Vietnam – EU FTA (not yet effective)
- Vietnam – Israel (in negotiation)
- Vietnam – EFTA (in negotiation)
INVESTMENT INDUSTRIES
Vietnam has become an attractive Real Estate: The investment in real
investment destination for various estate sector accounted for 10 per
sectors, from manufacturing, 2018. Ho
real estate, energy, retail, and Chi Minh City stands out as the hub
construction, to arts, tourism, to attract most of the large-scale real
entertainment, and other services. estate projects.
14%
4%
40,000 35,602 38,019
35,466
7%
Million USD
30,000
26,891
24,115
10% 65%
20,380
19,100
20,000 14,500
15,800
17,700
10,000
0
2015 2016 2017 2018 2019 Manufacturing Real Estate
Professional activities, Wholesale,
Registered FDI Disbursed FDI science and technology Retail & Repair
Others
80,000
70,000
60,000
Invesment Capital
50,000
(million USD)
40,000
30,000
20,000
10,000
0
g s
rea on ore an ina an nd mo
a
an
d nd
Ko gK ap Jap Ch Ta
iw Isla Sa ail lla
uth
n g in Th Ho
So Ho Sin Vir
g
tish
Bri
Source: Foreign Investment Agency
17 COASTAL
ECONOMIC ZONES
15
B TRADE AND INVESTMENT
The value of M&A transactions increased from US$1.1 billion in 2009 to US$7.64
billion in 2018. The total value of transactions in the decade hit US$55 billion.
However, the value of M&A transactions in the first half of 2019 leveled off at
US$1.9 billion, equal to 53% of the same period last year.
According to the statistics of the Foreign Investment Agency, under the Ministry of
Planning and Investment, foreign investors spent US$2.64 billion to purchase
shares.
Positive factors are opening a new era for M&A activities in Viet Nam with a
number of opportunities for breakthrough and making M&A become a crucial
investment attraction channel in the time ahead.
M&A market in Viet Nam expects strong developments in the issuance and
realization of policies as well as connectivity, trade transactions and innovation of
buyers and sellers.
17
C SETTING UP AN INVESTMENT IN VIETNAM
shares
Joint Sto
company.
At least three
shareholders A joint stock company is required to have at least
(with no maximum three shareholders (with no maximum number of
number of shareholders). A joint stock company may take
shareholders)
the form of either (i) 100% foreign-owned; or (ii) a
joint venture between foreign and domestic
investors.
PARTNERSHIP
sh
rtner ip
Managing
Pa partners have A partnership may be established between two
unlimited liability for individual managing partners. The managing
all obligations of the partners have unlimited liability for all
partnership
obligations of the partnership. Besides managing
partners, a partnership may have contributing
Contributing
partners only liable
obligations of the partnership up to the value
obligations of the
partnership up to their
of their contributed capital.
contributed
capital
19
C SETTING UP AN INVESTMENT IN VIETNAM
20
MERGERS AND ACQUISITIONS
The legal framework for M&A is set out under the Law on Enterprise and Law on
Investment and their guiding documents, which cover conditions, procedures
and tax consequences of such activities.
The Competition Law also has an effect on M&A activities. Where a merger or
acquisition may result in a legal entity with a market share accounting for 30%
to 50% of the relevant market, the legal representative of such entity must notify
the competition management body before the merger/acquisition is implemented,
unless the law provides otherwise. A merger or acquisition that results in a new
entity with its market share accounting for more than 50% of the relevant
market is prohibited, unless otherwise stipulated in the Competition Law.
21
C SETTING UP AN INVESTMENT IN VIETNAM
(*) The timeline for setting-up projects prioritized by national or provincial Government shall be shortened.
(**) Please note that IRC is required only for investments by foreign investors or deemed-to-be foreign investors
(i.e. companies with more than 51% of charter capital held by foreign ownership).
23
C SETTING UP AN INVESTMENT IN VIETNAM
The company shall be dissolved only when all debts and liabilities are settled
and the company is not involved in any dispute at a court or arbitration body.
The liquidation procedures generally take about 6 - 12 months, which normally
2-3 months
Tax Authority
5 days Business
Registration
from debt clearance date Authority
D
TAXATION AND
CUSTOMS
25
I. TAXATION
The Vietnamese tax system is comprised of the following:
All taxes are levied at the national level. There are no local taxes.
Other Taxes 51
50
shall be applicable.
27
CORPORATE INCOME TAX (CIT)
TAXPAYERS
1 2
Foreign
Vietnam- enterprises with or
incorporated without Permanent
enterprises Establishment
(PE)
Service
Branches/Agents establishment
Plants/
Construction sites Others
TAX CALCULATION
CIT PAYABLE = TAX RATE X ASSESSABLE INCOME
1. (Total revenue – Deductible expenses) is considered an income from main business activities.
Such income is entitled to CIT incentives, if any.
2. Normally, other forms of income are not entitled to CIT incentives, and thus, shall be subject to
the standard CIT rate of 20 per cent. Other income includes gains from foreign exchange revaluation,
income from disposal of fixed assets, interest income, ect. not related to main business.
Tax Rates
From 1 January 2016, the standard CIT rate is 20 per cent. The CIT rate for enterprises operating in
exploration and mining of petroleum, gas, and other rare and precious natural resources shall
range from 32 per cent to 50 per cent, depending on the project locations and conditions.
Tax holiday
Generally, tax holiday is available from the first profit-making year or the fourth
revenue-generation year, where applicable, except high-tech enterprises.
BY LOCATION
CIT INCENTIVES
ACTIVITIES
PREFERENTIAL TAX RATE TAX HOLIDAY
29
BY SECTOR
The current incentive scheme is applicable for sectors that are prioritized for
investment under the Government’s development policies.
CIT INCENTIVES
ACTIVITIES
(for example)
PREFERENTIAL TAX RATE TAX HOLIDAY
CIT INCENTIVES
ACTIVITIES
(for example)
PREFERENTIAL TAX RATE TAX HOLIDAY
BY BUSINESS SCALE
Investment incentives are granted to large projects manufacturing projects
(excluding those in product manufacture subject to special sales tax or those in
mineral resources exploitation) having either:
1. Total capital of VND 6,000 billion or more, disbursed within 3 years since being
licensed with:
- Minimum annual revenue of VND 10,000 billion by the 4th year of revenue
generation at the latest; or
- Regularly employing more than 3,000 employees by the 4th year of operation at
the latest.
2. Total capital of VND 12,000 billion or more, disbursed within 5 years since being
licensed and using technologies being evaluated under the Law on Hi-technology,
and the Law on Science and Technology.
CIT INCENTIVES
ACTIVITIES
PREFERENTIAL TAX RATE TAX HOLIDAY
• VND 6,000 billion capital project (1) 10% for 15 years • 4 years of tax
exemption; and
• 50% reduction in tax
• VND 12,000 billion capital project (2)
for the next 9 years
31
DEDUCTIBLE EXPENSES
An expense might be deductible for CIT purpose if the following conditions are met:
1 2
Actually incurred and Supported by proper
relevant to the company’s documents
business activities
4
Payments above VND 20 Not in the list of
3
million must be supported non-deductible expenses
by bank payment vouchers
or deemed as made via
banks
33
PERSONAL INCOME TAX (PIT)
OVERVIEW
TAX RESIDENCY
An individual is a tax resident if he/she
meets one of the following conditions:
• Residing in Vietnam for 183 days or
more in 12 consecutive months from Present in
the first arrival date or in a calendar Vietnam for
year; 183 days or
• Having a registered permanent more
residence in Vietnam as recorded by
a temporary/permanent residence
card;
• Having rented a house in Vietnam
House lease Permanent/
contract of 183 Temporary
with a term of 183 days or more
days or more residence card
within a tax year.
Note: An individual having registered address
or rented house over 183 days but residing less than
183 days in Vietnam may still be a tax resident if being
unable to prove residency of another country.
35
• Uniform allowance in cash below TAX RELIEF
VND 5 million/year or in kind; FOREIGN TAX CREDIT
• Overtime in excess of the normal rate. A tax resident is entitled to claim
for Foreign Tax Credit (i.e. the
NON-EMPLOYMENT INCOME amount of tax paid overseas
Non-employment income includes according to overseas regulations)
income from business, capital against their Vietnamese PIT on the
investment, inheritance, gifts, foreign-sourced income; however, the
prize winnings, transfer of capital, creditable amount shall not exceed the
transfer of real estate, sale of shares/ Vietnamese PIT payable according to
securities, royalties, franchising,
copyrights, etc. which are subject to income arising overseas.
NON-EMPLOYMENT
TAX RATE
INCOME
1% - 5% on revenue
Business Income *Depending on type
of business
Capital investment,
i.e. interest, dividends
5%
(except for bank
interest)
20% on net gains for
tax resident; 0.1% on
Capital transfer
sales proceeds for
non-resident
Securities / JSC share 0.1% on sales
transfer proceeds
Real estate transfer 2% on sales proceeds
Income from winning
prizes (in excess of 10%
VND 10 million)
Income from copyright
(in excess of VND 10 5%
million)
Income from royalty/
franchising (in excess 5%
of VND 10 million)
Income from gifts /
inheritances
10%
(in excess of VND 10
million)
37
TAX DECLARATION AND PAYMENT
Each individual taxpayer must register for a personal tax code prior to the time
limit for his first PIT filing. In case the employer makes tax registration for
employees earning income from salaries or wages and tax registration for
employees’ dependents, the registration deadline shall be within 10 working
days before the submission of annual PIT finalization return.
TAX FINALIZATION
Tax residents are required to file the PIT finalization return and settle outstanding
PIT liabilities within 90 days from the end of the tax year.
TAX RATES
There are three types of VAT treatment: non-taxable items; items not required to
declare VAT and taxable items (at 0 per cent, 5 per cent and 10 per cent VAT rate).
Below are some notable cases:
NON-TAXABLE
• Land use rights;
• Insurance related to human;
• Loan, credit services;
• Education and vocational training according to prevailing regulations;
• Medical services;
• Machinery and equipment not locally produced, imported for some specific purpose;
• Temporarily imported goods;
• Capital transfer transactions between non-tariff zones and overseas;
• Intellectual property rights, software (except exported software);
• Unprocessed or semi-processed products of cultivation, agriculture, aquaculture; animal
breeding stock, seedlings, salt products, etc.;
39
DECLARATION NOT REQUIRED
• Compensation, financial income;
• Project transfer;
• Transfer of assets within a company and dependent units;
• Capital contribution by assets;
• Commission for some agent services.
TAXABLE
0% International transportation;
Aviation and maritime services provided either directly for
foreign entities or through agents
40
D TAXATION AND CUSTOMS
OF WHICH Output VAT shall be equal to the total VAT on goods or services sold as stated
in the VAT invoice.
Input VAT shall be:
- VAT amount as recorded in all VAT invoices for the purchase of goods or services;
- VAT amount stated on receipts for VAT payment on imported goods;
- VAT amount stated on receipts for VAT payment on behalf of foreign
contractors.
In order to claim deductible input VAT, taxpayers must obtain the following
documents for each type of goods/services purchased:
GOODS/SERVICES PAYMENTS ON
IMPORTED
LOCALLY BEHALF OF FOREIGN
GOODS
PURCHASED CONTRACTORS
VAT invoice
(*) Non-cash payment vouchers are only required for payments of VND 20 million or more (inclusive of VAT).
41
In case the credit method is applied, taxpayers should note the following principles
regarding credits:
DIRECT METHOD
The direct method is adopted in the following cases:
• Enterprises with annual revenue subject to VAT of less than VND 1 billion
unless they voluntarily register for credit method;
• Enterprises not maintaining proper books of accounts and foreign
organizations/ individuals carrying out business activities not regulated under
the Law on Investment;
• Business individuals and households;
• Enterprises engaging in trading in gold, silver and precious stones.
VAT calculation under direct method:
For those enterprises engaging in the business of gold, silver and precious
stones, VAT payable shall be calculated as 10% of the added value. The value
added of gold, silver, and precious stones equals their selling price minus their
purchase price which are recorded by proper VAT invoices or payment receipts/
vouchers.
TAX REFUND
From 1 July 2016, taxpayers can only claim VAT refund from tax authorities in
the following common cases:
• New projects of taxpayers who adopt the VAT-deduction method that are in the
pre-operation investment period, and with a total accumulated input VAT
exceeding VND 300 million (some exceptions may apply);
f
local sales) with an amount exceeding VND 300 million (but capped at 10% of export
revenue), except:
goods imported then re-exported;
Customs Law.
VAT exceeding VND 300 million are re-allowed to enjoy VAT refund.
E-Invoice
Currently, taxpayers can choose between paper invoices or e-invoices.
However, e-invoices must be used for all enterprises from 01 November 2020.
43
FOREIGN CONTRACTOR WITHHOLDING TAX (FCWT)
TAXPAYERS
FCWT is applicable to foreign organizations/individuals who conduct
business or earn income in Vietnam on the basis of a contract/agreement
with (i) a Vietnamese party (as a main foreign contractor); or (ii) another
foreign contractor to implement part of the contractual scope of works (as a
foreign sub-contractor). FCWT is a tax collection mechanism that normally
comprises both CIT and VAT, but may also include PIT for payments to foreign
individuals.
SCOPE OF APPLICATION
IMPORTANT NOTE
There is no dividend withholding tax in Vietnam on corporate shareholders.
TAX DECLARATION
There are three methods for FCWT declaration including: (i) Deemed method; (ii)
Hybrid method; and (iii) Declaration method.
While the Deemed method can be applied by foreign contractors without any
specific conditions (and is the most common method, which can be applied), the
Hybrid method and Declaration method require foreign contractors to satisfy the
following conditions:
• Maintaining a contract duration of 183 days or more;
45
TAX RATES
In case of the deemed method, the following rates shall be applied for some
notable cases:
Services 5% 5%
Supply of goods attached to services where the value is separated:
Goods portion Exempt (for goods) 1% (for goods)
Services portion 5% (for services) 5% (for services)
Supply of goods and some 3% 2%
services where value is not
separated (*)
Construction 3% or 5% 2%
Loan interest Exempt 5%
Income from royalties Risk of being taxed at 5% 10%
Other cases where value is not Highest rate applicable Highest rate applicable
separated
47
WITHHOLDING TAX RATES UNDER VIETNAM’S TAX TREATIES
Treaty Partner Dividends Interest Royalties
Algeria (*) 15 15 15
Australia 10 10 10
Austria 5/10/15 10 7.5/10
Azerbaijan 10 10 10
Bangladesh 15 15 15
Belarus 15 10 15
Belgium (*) 5/10/15 10 5/10/15
Brunei Darussalam 10 10 10
Bulgaria 15 10 15
Cambodia 10 10 10
Canada 5/10/15 10 7.5/10
China 10 10 10
Cuba 5/10/15 10 10
Czech Republic 10 10 10
Denmark 5/10/15 10 5/15
Estonia 5/10 10 7.5/10
Egypt (*) 15 15 15
Finland 5/10/15 10 10
France 7/10/15 0 10
Germany 5/10/15 10 7.5/10
Hong Kong 10 10 7/10
Hungary 10 10 10
Iceland 10/15 10 10
India (*) 10 10 10
Indonesia 15 15 15
Iran 10 10 8/10
Ireland 5/10 10 5/7.5/10/15
Israel 10 10 5/7.5/15
Italy 5/10/15 10 7.5/10
Japan 10 10 10
49
WITHHOLDING TAX RATES UNDER VIETNAM’S TAX TREATIES
Treaty Partner Dividends Interest Royalties
Seychelles 10 10 10
Singapore 5/7/12.5 10 5/10
Slovakia 5/10 10 5/7.5/10/15
Spain 7/10/15 10 10
Sri Lanka 10 10 15
Sweden 5/10/15 10 5/15
Switzerland 7/10/15 10 10
Taiwan 15 10 15
Thailand 15 10/15 15
Tunisia 10 10 10
Turkey 5 10 10
United Arab Emirates 5/15 10 10
Ukraine 10 10 10
United Kingdom 7/10/15 10 10
United States (*) 5/15 10 5/10
Uzbekistan 15 10 15
Venezuela 5/10 10 10
Notes:
(*) These DTAs and the protocols for DTAs have been not yet in force.
(**) The content of some new DTAs were not available at the time this Investment Guide was prepared.
OTHER TAXES
SPECIAL SALES TAX
Special Sales Tax (SST) taxpayers include producers and importers of goods and
providers of services that are subject to SST. SST rates are presented in the table below:
Beer
• From 1 January 2018 65
Automobiles having fewer than 24 seats 5~150
Motorcycles with cylinder capacity above 125cm3 20
Aircraft/Yacht 30
Gasoline 7~10
Playing cards 40
Votive papers 70
Dancing club business 40
Massage, karaoke business, betting business 30
Casino business, electronic casino game business 35
Golf course business 20
Lottery business 15
51
ENVIRONMENT PROTECTION TAX
Environment protection taxpayers are organizations, households and
individuals producing and/or importing goods that are subject to the
environment protection tax. The tax rates are presented in the table below:
REGISTRATION FEE
Organizations and individuals having properties subject to registration fee
must pay the registration fee when registering the ownership and usage rights
IMPORT DUTY
Import duty is generally applied to goods physically crossing or “considered as crossing”
duty rates, which
are determined border based on HS codes and the origins of the goods. Goods originating
categorized as follow:
53
PRIORITY ENTERPRISE STATUS
Businesses that are granted priority
areas or encouraged sectors); enterprise status are entitled to various
• Certain imports serving petroleum- privileges, waivers or exceptions of
related activities; customs administrative requirements,
• Goods temporarily imported within a including:
• Waiver of certain document
purposes.
requirements during customs clearance,
Import duty exemption is also applicable
customs inspection, etc.;
to import transactions of an Export
• Exemption from the requirement of
Processing Enterprise (EPE). An EPE is
customs audit at customs offices
• The customs authority may conduct
considered as an EPE, a company must
post-clearance audit at the enterprise′s
commit to export all of its products.
office only once every three years, on
All of the purchases in relation to the
the basis of risk management, except for
manufacture/processing of exported
signs of violations of the legislation on
CUSTOMS AUDIT
For different business models, different typical customs risks might be triggered.
MANUFACTURING/
TRADING &
TYPICAL RISKS PROCESSING FOR EPE
DISTRIBUTION
EXPORT
Inventory reconciliation N/A
N/A N/A
The above risks might be exposed before, during, or after the customs declaration
are carried out. Typically, a customs audit shall be conducted if there is any
signal that there may be acts of taxpayers that violate legal requirements, or in
accordance with a specific inspection plan of the customs authorities. The audit
might be performed either at the customs authority offices or at the taxpayer′s
premises.
55
III. LAND RENTAL INCENTIVES
Land rental incentives are mostly governed by the Land Law 2013, and
implementing regulations (including Decree No. 46/2014/ND-CP, Decree No.
123/2017/ND-CP, List of encouraged field & sectors in Decree No. 118/2015/ND-CP
and other specific regulations).
LAND RENTAL
PROJECT CONDITION
EXEMPTION PERIOD
1. PROJECT ENJOYING EXEMPTION OF LAND RENTAL FEE FOR WHOLE RENTAL PERIOD
• Project invest in specially encouraged investment sectors and in The whole rental
specially difficult socio-economic condition locations period
• Mega-projects having total capital of at least VND 6,000 billion(*) in
specially encouraged investment sectors
(*) Labor-intensive projects located in the rural areas using at least 500 full-time employees signing labor
contract of more than one year since official operation (excluding those doing commercial housing business, or
those manufacturing products subject to special sales tax (except automotive) or those exploiting mineral
resources).
(**) Mega-projects (excluding those doing commercial housing business, or those manufacturing products
subject to special sales tax (except automotive) or those exploiting mineral resources), having total capital of
VND 6,000 billion or more, disbursed within 3 years since being licensed.
(***) Of note, the land rental fee exemption period for the projects located in economic zones and hi-tech zones
could be 11 years, 13 years, 15 years, 17 years, 19 years or the whole rental period, which is regulated
separately by Decree No. 35/2017/ND-CP dated 03 April 2017 of the Government (effective from 20 June 2017).
57
HUMAN RESOURCES AND
EMPLOYMENT
58
E HUMAN RESOURCES AND EMPLOYMENT
59
WORKING TIME
Weekly hours: Daily break: Overtime payment must be at least
40 – 48 1 hour 150% of regular wages on normal
work days, at least 200% on weekends
Overtime: and at least 300% on public holidays
Daily hours: 200 hours/year
8 and paid leave days.
(300 hours in special cases)
Region I
VND 4,420,000
Region II
VND 3,920,000
Region III
VND 3,430,000
Region IV
VND 3,070,000
OF WHICH
• Region I includes urban Hanoi, • Region III includes small-sized
Hai Phong, Ho Chi Minh City, cities and towns
Dong Nai, Binh Duong and Ba Ria • Region IV includes the
– Vung Tau remaining less developed areas
• Region II includes rural Hanoi, of Vietnam
Hai Phong, Ho Chi Minh City and
medium- sized cities and towns
EMPLOYEE EMPLOYER
TYPE OF INSURANCE TOTAL
CONTRIBUTION CONTRIBUTION
SI 8% 17.5% 25.5%
HI 1.5% 3% 4.5%
UI 1% 1% 2%
1 July 2019, the common minimum salary being the basis for
the SIHI contribution is VND 1,490,000. The SIHI contribution then is computed
at the lower of the contracted gross income or 20 times the monthly common
minimum salary, currently capped at VND 29,800,000. The cap of UI is 20 times
of the common regional salary, e.g. VND 83,600,000 for Region I.
61
TERMINATION OF EMPLOYMENT
Pursuant to the current Labor Code, a labor by a court as to have lost civil act
contract is terminated in the following cases: capacity, be missing or dead.
1. The labor contract expires. 7. The individual employer dies or is
2. The work stated in the labor declared by a court to have lost
contract has been completed. civil act capacity, be missing or
3. Both parties agree to terminate the dead; the institutional employer
labor contract. terminates operation.
4. The employee fully meets the 8. The employee is dismissed on
requirements on the time of the disciplinary grounds.
social insurance contributions and 9. The employee unilaterally
the retirement age (60 for males terminates the labor contract.
and 55 for females). 10. The employer unilaterally
5. The employee is sentenced to terminates the labor contract; the
imprisonment or death, or is employer lays off the employee
prohibited from performing the due to structural or technological
job stated in the labor contract changes or economic reasons,
under a legally effective judgment merger, consolidation or division
or ruling a court. of the enterprise or cooperative.
6. The employee dies or is declared
The Labor Code also specifies certain cases where employer and employee
may unilaterally terminate the labor contract, for example: employee’s failure
to perform the contracted work; reduction in employer’s business scale due to
force majeure events; employee’s inability to continue working due to illness,
accidents or breach of discipline; etc.
Job-loss allowance
company
allowance” instead of “severance allowance” from the employer if the employee
has been employed for at least 12 company,
each year of service and not less than two full months’ pay in total.
Severance
Time basis Salary basis 1/2
allowance
Job-loss
Time basis Salary basis
allowance
OF WHICH
• Salary basis is the average of the working time of the employee
monthly salary under the labor minus the time of UI contribution
contract within the six consecutive and the time of being paid with
months preceding the time of severance allowance from the
contract termination. employer measured by the
• Time basis is the total actual number of years.
63
E HUMAN RESOURCES AND EMPLOYMENT
For employees being recruited after 1 January 2009 and having fully contributed to
the compulsory UI scheme, the State Unemployment Agency shall be responsible
for paying severance/job-loss allowance which is also referred to as unemployment
allowance to these employees upon termination of labor contract.
EMPLOYMENT OF FOREIGNERS
To be employed in Vietnam, foreigners must meet the following requirements:
• Be at least 18 years old;
• Be in good health condition necessary to satisfy the job requirements;
• Be in possession of high technical skills or considerable professional experience in
production operation/management;
• Be a manager, an executive director or an expert; and
• Have no criminal convictions, civil record or pending criminal proceedings in
Vietnam or abroad.
65
F FOREIGN EXCHANGE CONTROL
67
F FOREIGN EXCHANGE CONTROL
USEFUL WEBSITES
• Ministry of Planning and Investment: http://www.mpi.gov.vn
• Foreign Investment Agency – Ministry of Planning and Investment
Deloitte Vietnam, a pioneer in the Advisory and Audit industry with over 28 years
of experience in the Vietnam market, is part of the Deloitte Global network, one of
the Four largest professional services organisations in the world. Our clients are
served by over 1,000 staff located in our Hanoi and Ho Chi Minh City offices with
access to the full strength of our Deloitte Asia Pacific member firms. Through our
extensive network, Deloitte Vietnam delivers value-added services in Financial
Advisory, Risk Advisory, Tax & Legal, Consulting, Audit & Assurance and
Professional Training Services to the private and public sectors across a wide
range of industries.
Contacts
Hanoi Office Ho Chi Minh City Office
15 Floor, Vinaconex Tower
th
18th Floor, Times Square Building,
34 Lang Ha Street, Lang Ha Ward, 57-69F Dong Khoi Street, Ben Nghe Ward,
Dong Da District, Hanoi, Vietnam Distric 1, Ho Chi Minh City, Vietnam
Tel: +84 24 7105 0000 Tel: +84 28 7101 4555
Fax: +84 24 6288 5678 Fax: +84 28 3910 0750
Visit us at www.deloitte.com/vn
Email: deloittevietnam@deloitte.com
© 2020 Deloitte Vietnam. All rights reserved. Deloitte refers to one or more of Deloitte Touche Tohmatsu
Limited (“DTTL”), its global network of member firms, and their related entities. DTTL (also referred to as “Deloitte
Global”) and each of its member firms and their affiliated entities are legally separate and independent entities.
DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte is a leading global provider of Audit & Assurance, Consulting, Financial Advisory, Risk Advisory, Tax &
Legal and related services. Our global network of member firms and related entities in more than 150 countries
and territories (collectively, the “Deloitte organisation”) serves four out of five Fortune Global 500® companies.
Learn how Deloitte’s approximately 312,000 people make an impact that matters at www.deloitte.com.
71
Foreign Investment Agency (FIA)
Ministry of Planning and Investment of Vietnam
• Administration Office
• Statistics and General information Division
• Foreign Investment Division
• Outward Investment Division
• Investment Promotion Division
65 Van Mieu, Hanoi 103 Le Sat, Da Nang 178 Nguyen Dinh Chieu, Ho Chi Minh City
Tel: +84 24 3747 5998 Tel: +84 236 3797 669/~689/738/699 Tel: +84 28 3930 6671
Fax: +84 24 3843 7927 Fax: +84 236 379 7679 Fax: +84 28 3930 5413
E-mail: ipcn@mpi.gov.vn Email: ipcmientrung@gmail.com Email: bbt@ipcs.vn
Website: http://ipcn.mpi.gov.vn Website: http://centralinvest.mpi.gov.vn Website: http://ipcs.vn/en/