Vietnam proposes talent visa, 5-year personal income tax exemption for foreign experts

The Ministry of Home Affairs is seeking public feedback on a draft resolution outlining special mechanisms and policies to attract and make effective use of talented people, which will be submitted to the lawmaking National Assembly for consideration.

The draft applies to Vietnamese citizens, overseas Vietnamese, and foreign nationals.

Under the draft, income from salaries and bonuses earned by talented individuals and their associates would be exempt from personal income tax for five years from the time the income arises.

A key proposal is the Vietnam Talent Visa, which would be granted to foreign nationals who qualify under the resolution.

Holders of the visa would be eligible for corresponding temporary residence cards, extensions, and changes to their residence purposes in accordance with applicable conditions and time limits.

Their spouses and children under 18 would be eligible for UD2 visas and corresponding temporary residence cards, with arrangements to facilitate their residence, education, and daily life in Vietnam.

Eligible foreign talent would also be exempt from work permit requirements and allowed to work for multiple agencies, organizations, and businesses without applying for a separate permit for each workplace. 

They would not need to have their visas reissued when changing jobs.

The drafting agency has also floated incentives for businesses employing talented individuals and their associates.

Businesses employing talent and associates to carry out strategic tasks would be allowed to deduct an additional amount equal to 100 percent of the actual salaries and bonuses paid to them when calculating taxable corporate income. 

This would bring the total deductible amount to 200 percent of the actual salary and bonus costs.

Talented individuals working for businesses carrying out strategic tasks without using state budget funds would still be eligible for the full package of incentives, including personal income tax exemptions, the Vietnam Talent Visa, residence benefits, and work permit waivers.

Proposed safeguards for talent and those employing them

The draft also outlines protections for talented individuals and those employing them, provides for an annual budget allocation equivalent to 0.1 percent of gross domestic product (GDP), and establishes a principle of applying the most favorable legal provisions.

Talented individuals, people involved in carrying out strategic tasks, and those advising on, appraising or deciding on the selection and employment of talent could be considered for exemption from or exclusion of liability, with their lawful rights and interests protected, provided they follow established procedures and do not seek personal gain when facing objective risks.

The proposed protections would also cover those involved in drafting and issuing policies.

For unintentional mistakes, disciplinary action would depend on how serious the mistakes were, the circumstances, and whether the person reported it and took steps to correct it.

The protections would not apply to corruption, fraud, profiteering, intentional violations of the law, concealment of violations or abuse of special policies to cause damage.

Under the draft, the state would allocate annual budget funding equivalent to around 0.1 percent of GDP for talent-related activities, as part of the overall resources for science and technology, innovation, and digital transformation.

The National Assembly would allocate the annual budget, while the government would distribute funds to ministries, sectors, and localities. 

Provincial and municipal People's Councils with budgetary autonomy could decide to allocate higher spending.