Government Decree 70/2023/ND-CP, which came into effect on September 18, 2023, introduces amendments and additions that simplify the process for businesses to recruit and manage foreign workers in Vietnam.

Decree 70 revises and supplements certain provisions of Decree 152/2020/ND-CP, which pertains to the issuance of work permits for foreign workers in Vietnam, and eliminates specific regulations found in Decree 35/2022/ND-CP, which addresses the management of industrial parks and economic zones. Work permits: easing the burden of proving work experience Under the regulations of the Labor Code, foreign workers must meet certain conditions, including possessing the necessary skills and work experience, with a minimum number of years required. Decree 152 stipulates that foreign experts and workers must have three to five years of experience but does not explicitly require foreign workers to provide proof of their skills and experience. In practice, however, government agencies responsible for granting work permits and related documents, often referred to as permits or work permits, have historically demanded that foreign workers prove their work experience abroad. To be accepted, this work experience is typically needed to be certified by foreign organizations. This requirement has created challenges and deterred businesses and foreign workers from applying for work permits, resulting in both time and opportunity costs. Article 1.5 (b) of Decree 70 now officially outlines that documents such as work permits issued by foreign agencies, organizations, and businesses that certify the years of experience of foreign experts and technical workers can serve as proof of their expertise and work experience. This means that foreign workers who have previously been granted work permits can now use those permits to validate their work experience without the need for additional certification by overseas organizations or businesses. Work experience no longer tied to specific training fields One of the most contentious aspects of Decree 152 pertains to the requirement that both businesses and foreign workers must meet specific experience criteria in their respective training fields, which should align with their intended jobs in Vietnam. This regulation has made it tough for many businesses seeking work permits for foreign workers. Not all foreign workers with university degrees or higher qualifications have jobs that perfectly align with their field of study. With the exception of certain specialized professions such as architects, accountants, auditors, doctors, and lawyers, who must work within their trained fields, there are numerous instances of foreigners working in professions and fields unrelated to their academic backgrounds. As a result, these individuals cannot fulfill the work experience requirements associated with their academic qualifications. To address this issue, Decree 70 stipulates that foreign experts and technical workers only need to demonstrate that their work experience is relevant to their intended job in Vietnam. Enhanced flexibility for foreign workers across multiple locations The demand for businesses to deploy foreign workers in various locations across Vietnam is substantial. Prior to the implementation of Decree 152, there was a regulation stipulating that when foreign workers with work permits were to work in locations other than the cities or provinces where they were originally employed for a period exceeding 10 consecutive days, businesses were required to formally notify the labor agency in the respective locality where these foreign workers would be stationed. However, Decree 152 introduced a provision that primarily restricted work permits to a single workplace, limiting the operational flexibility of foreign workers. This was in contrast to the Labor Code, which allows businesses and employees to mutually agree on the workplace, and Circular 10/2020/TT-BLDTBXH issued by the Ministry of Labor, Invalids, and Social Affairs, which permits the inclusion of multiple workplaces in labor contracts. Decree 70 introduces a solution for foreign workers employed by businesses to work across multiple locations. In this scenario, the business is required to list all these locations within the work permit application. If foreign workers are to work in numerous centrally-administered cities and provinces, the business must promptly report this online to the Ministry of Labor, Invalids, and Social Affairs, as well as the Department of Labor, Invalids, and Social Affairs in the locality where the foreign workers will be employed. This reporting should be done within three days from the commencement of their work assignments, following the guidelines provided in Form 17/PLI of Appendix I attached to the decree. Clarifications on documentation for foreign worker positions The Enterprise Law features a provision for “The business manager” within the Company Charter. However, it does not include any provisions for the role of an executive director. This absence of clarity in defining the foreign worker’s position in the work permit application, particularly when it is not explicitly stated in the business registration certificate, often results in rejections by work permit-granting authorities. Decree 70 addresses this issue by introducing a clear definition for the executive director. According to the decree, the executive director is the head of a branch, office, or business location of the involved enterprise. Furthermore, the executive director directly oversees at least one area of the business and operates under the direct leadership and management of a company leader, such as the general director or chairperson. To substantiate that a foreign worker holds the position of executive director, the relevant business may present any of the following documents as evidence: (i) Company charter, (ii) Business registration certificate, or other documents with equivalent legal validity, or (iii) Appointment resolution or decision. Streamlining authority for work permit approvals Previously, as per Decree 152, the Ministry of Labor, Invalids and Social Affairs or the People’s Committee of centrally-run cities and provinces were the authorized state agencies for granting approval letters for employing foreign workers. In practice, provincial People’s Committees delegated this processing to the Department of Labor, Invalids and Social Affairs. Consequently, businesses had to submit reports explaining the necessity of employing foreign workers to the department, which, in turn, forwarded them to the provincial People’s Committee for approval. The approval letter for the foreign worker’s employment position was then routed back to the department through the one-door mechanism. Decree 70 addresses this problem by specifying that the Department of Labor, Invalids and Social Affairs is the competent authority for approving foreign worker employment, replacing the provincial People’s Committee. According to Decree 35, the management boards of industrial parks and economic zones held the function and responsibility of (i) receiving business reports in these zones that explained the need to employ foreign workers for roles that Vietnamese workers were not yet qualified for, and (ii) issuing, reissuing, extending, and withdrawing work permits for foreign workers in these zones. Consequently, foreign workers in industrial parks were recruited and managed by these management boards instead of the provincial People’s Committee or the Ministry of Labor, Invalids and Social Affairs. Decree 70 abolishes this provision from Decree 35. As of September 18, 2023, the management boards will no longer oversee the recruitment of foreign workers, regardless of their workplace. Instead, the Ministry of Labor, Invalids and Social Affairs will manage foreign workers both inside and outside industrial zones. New rules prioritize Vietnamese workers in job openings Regarding the report explaining the necessity of hiring foreign workers, Decree 152 only stipulates that businesses must justify why Vietnamese workers are not suitable for the positions intended for foreign workers, without requiring supporting documentation. However, due to the significant influx of foreign workers into Vietnam, which has intensified competition and posed a direct threat to the jobs of Vietnamese workers, state agencies have tightened regulations and introduced barriers to foreign worker recruitment. Decree 70 introduces a new provision mandating that businesses must publicly announce job openings for Vietnamese workers before advertising positions for foreign workers, effective January 1, 2024. These announcements must be made via the electronic portal of the Ministry of Labor, Invalids and Social Affairs or employment centers established under the decision of the provincial People’s Committee. Additionally, the decree shortens the reporting period for the necessity of hiring foreign workers from at least 30 days, as stated in Decree 152, to 15 days.

(*) Duong Tien Thu and Nguyen Thi Thu Trang are lawyers at Phuoc & Partners Company