Individuals are given favorable conditions to work in Vietnam, as well as invest in establishing businesses and are exempt from work permits in some cases.

This article was consulted by Lawyer Nguyen Quang Trung

Legal grounds:

• Labor Code 2019;
• Decree No. 152/2020/ND-CP.

We receive the following questions:

I have a friend abroad. We want to establish a company in Vietnam about software outsourcing. So if my friend is a foreigner and I contribute capital to open a company, does he need a work permit when he comes to Vietnam to work?

Currently, Vietnam is encouraging and creating favorable conditions to attract foreign investment capital. Foreign individuals can establish a LLC with 100% of their capital, or can also contribute capital with Vietnamese people to establish and operate a company in Vietnam.

Pursuant to Article 154 of the 2019 Labor Code as follows:

Article 154. Foreign workers working in Vietnam are not subject to work permits

1. Be an owner or capital contributing member of a limited liability company with capital contribution value according to Government regulations.
2. Be the Chairman of the Board of Directors or member of the Board of Directors of a joint stock company with capital contribution value according to Government regulations.
3. Be the Head of a representative office, project or be primarily responsible for the activities of an international organization or foreign non-governmental organization in Vietnam.
4. Enter Vietnam for less than 03 months to offer services.
5. Enter Vietnam for a period of less than 03 months to handle problems, complex technical and technological situations that arise that affect or threaten to affect production and business that Vietnamese experts and Foreigners currently in Vietnam cannot handle it.
6. Be a foreign lawyer who has been granted a License to practice law in Vietnam according to the provisions of the Law on Lawyers.
7. In cases under the provisions of international treaties to which Vietnam is a member.
8. Foreigners marry Vietnamese people and live in Vietnamese territory.
9. Other cases according to Government regulations.

Pursuant to Clauses 1 and 2, Article 7 Decree 152/2020/ND-CP as follows:

Article 7. Cases where foreign workers are not subject to work permits

In addition to the cases specified in Clauses 3, 4, 5, 6, 7 and 8, Article 154 of the Labor Code, foreign workers are not subject to work permits:

1. Be an owner or capital contributing member of a limited liability company with capital contribution value of VND 3 billion or more.
2. Be the Chairman of the Board of Directors or a member of the Board of Directors of a joint stock company with capital contribution value of VND 3 billion or more.

According to the above regulations, foreign individuals who invest in establishing companies to do business in Vietnam may not need a work permit.

However, to avoid foreign individuals taking advantage of establishing a company to stay in Vietnam by contributing capital to the company but only with a very small symbolic capital, the law stipulates a minimum investment capital level in order to exempt work permit as follows:

• For limited liability companies: foreigners must be members with capital contributions of 3,000,000,000 VND or more;
• For joint stock companies: foreigners must hold the position of Chairman of the Board of Directors or member of the Board of Directors of a company with capital contribution value of VND 3,000,000,000 or more.