The Vietnamese plant needs your own people — not for weeks but for years. Long-term transfers differ completely from short business trips: mandatory work permits, personal income tax, social insurance. This article covers it comprehensively.
1. Short vs long term: the legal line
- Short trips: weeks for installation and training — possible work-permit exemption if eligible (check current rules);
- Long-term transfers: working 1–3 years — mandatory work permits;
- The line: purpose and duration — actual work needs a permit;
- Fatal error: sending people on “business” for 6 months with endless extensions — treated as evasion;
- Rule: long term means doing it right from the start — not “temporary” forever.
2. Work permits for transferees
- Category: usually expert or manager — by title;
- Documents: degrees and experience — consular-legalised in China;
- Demand approval: the Vietnamese company needs approved foreign-labour demand first;
- Duration: permits usually 2 years — renewable;
- Detail: see our article on work permits for Chinese workers.
3. Visas and residence cards
- Work visa: enter on a work visa — company-sponsored;
- Residence card: after the work permit — a temporary residence card (1–2 years);
- Family: spouses and children — dependent cards — legalised marriage documents;
- Travel: the residence card allows multiple entries;
- Expiry: track all three — permit, card and passport — together.
4. PIT: long-term transferees
- Tax resident: over 183 days in Vietnam — tax resident, taxed on worldwide income;
- Split salary: China + Vietnam salary — declare all in Vietnam;
- Credit: Chinese tax paid is credited under the treaty;
- Company: withholds at source — periodic filing;
- Detail: see our article on PIT for Chinese experts.
5. Social insurance: where to pay?
- Rule: foreign workers with permits may owe Vietnamese social insurance;
- Intra-group transfers: possible exemption — check current rules;
- China: still paying Chinese social insurance? — avoid double payment;
- Treaty: check for a Vietnam–China social-security agreement;
- Advice: cross-border social insurance is complex — ask specialists.
6. Employment contracts: with whom?
- Option 1: contract with the Vietnamese company — suspending/ending the Chinese one;
- Option 2: secondment — keeping the Chinese contract, Vietnamese company pays;
- Impact: the choice affects tax and social insurance — model first;
- Seniority: preserve seniority — agreed clearly;
- In writing: secondment decision plus tripartite agreement.
7. Expatriate compensation policy
- Allowances: hardship allowances — compensating for distance from home;
- Housing: company-leased housing — or housing allowance;
- Travel: home-leave tickets — 1–2 times a year;
- Children: international-school fees — a major cost;
- Tax: tax-equalisation policy — the company bears the difference.
8. Families accompanying: the reality
- Visas: spouses and children — family-visit visas then residence cards;
- Schooling: international schools — Hanoi, HCMC, Haiphong;
- Health: international health insurance — international hospitals;
- Community: the Chinese community — integration support;
- Decision: family accompanying or not — affects work effectiveness.
9. End of assignment: home or stay?
- Going home: finalise tax — clearance confirmation;
- Staying: renew permits and cards — or switch to local contracts;
- Successor: hand over — train the replacement (preferably Vietnamese);
- Paperwork: revoke permits, surrender cards if leaving;
- Plan: a localisation roadmap — reducing dependence.
10. Long-term transfer checklist
- Work permits — obtained before arrival?
- Residence cards — for the whole family?
- PIT — salary structure clear?
- Social insurance — payable where?
- Employment contract — with whom?
- Expat policy — issued?
11. Training Vietnamese replacements
- Goal: after 2–3 years — Vietnamese staff take over transferee roles;
- Plan: each Chinese transferee mentors 1–2 Vietnamese — a scheduled handover;
- Assessment: periodic capability reviews — when are locals ready;
- Motivation: a clear promotion path for Vietnamese staff — retention;
- Benefit: lower transfer costs — local staff cost less.
12. Work culture: China–Vietnam differences
- Hours: Chinese overtime culture — Vietnam values balance more;
- Communication: Vietnamese are direct but face-saving — criticise privately;
- Hierarchy: respect for hierarchy but also team participation;
- Training: cultural training for transferees before departure;
- Patience: don’t impose the Chinese management style wholesale.
13. Health and safety for transferees
- Check-up: medical examination before departure — fitness confirmed;
- Insurance: international health insurance — covering international hospitals;
- Safety: train on Vietnamese occupational-safety standards;
- Emergency: a medical emergency plan — which hospital, who to call;
- Mental: psychological support — long separation causes stress.
14. “Reverse drain”: top people refusing to return
- Reality: transferees get used to Vietnam — refusing to go home;
- Handling: agree the term upfront — a clear return path;
- Return incentive: a promotion on return — a better position;
- Staying: if staying — switch to local contracts, adjusting compensation;
- Plan: always have a successor — never depend on one person.
15. Schooling options for children
- International schools: options in Hanoi, HCMC and Haiphong — with Chinese curricula in some;
- Costs: tuition is a major expat cost — budget realistically;
- Language: Mandarin programmes — maintaining the mother tongue;
- Admissions: apply early — popular schools fill up;
- Alternative: homeschooling support — for remote locations.
16. Repatriation: planning the return
- Timeline: start planning 6 months before the assignment ends;
- Role: a defined role back home — not a vague promise;
- Reverse shock: prepare for re-entry — families also readjust;
- Knowledge: capture what the transferee learned — debriefing reports;
- Retention: returning staff often leave — have a retention plan.
17. Business travel between China and Vietnam
- Frequency: budget for regular home trips — part of the package;
- Visas: multiple-entry arrangements — for transferees and families;
- Tax: track days in each country — residence thresholds;
- Policy: a written travel policy — classes, hotels, per diems;
- Wellbeing: don’t normalise endless travel — burnout is real.
18. Dual payroll: practical mechanics
- Split: define the China/Vietnam salary split — documented;
- Currency: choose payment currencies — managing FX;
- Shadow payroll: consider shadow payroll — for tax compliance;
- Reporting: consolidate — total cost per transferee;
- Review: annual review — splits change over time.
19. Terminating a failed transfer
- Signs: recognise failure early — performance, adaptation;
- Process: a dignified exit — not a punishment;
- Costs: budget repatriation — flights, shipping, settling;
- Replacement: have a backup — don’t leave a gap;
- Lessons: debrief — why did it fail.
20. Emergency repatriation planning
- Plan: an emergency plan — medical, security, natural disaster;
- Contacts: embassy contacts — Chinese embassy in Vietnam;
- Insurance: evacuation coverage — in the health policy;
- Communication: a crisis chain — who calls whom;
- Drill: brief transferees — before departure.
21. Language training for transferees
- Vietnamese basics: survival Vietnamese — before departure;
- English: business English — the factory lingua franca;
- Translators: hire interpreters — for the transition period;
- Signage: bilingual signage — safety first;
- Respect: learning the language shows respect.
22. Performance reviews across borders
- Who reviews: both the Vietnamese plant and Chinese HQ — input;
- Criteria: clear KPIs — set before departure;
- Cadence: quarterly reviews — not annual surprises;
- 360: feedback from Vietnamese colleagues — valued;
- Link: link reviews to the assignment’s purpose.
23. Cost benchmarking: transfer vs local hire
- Compare: total transferee cost — vs a local hire;
- Hidden: count hidden costs — housing, schooling, travel;
- Break-even: know when localisation pays off;
- Mix: the optimal mix — shifts over time.
Contact us
FLAT Law Firm advises Chinese investors throughout the Vietnam investment cycle — from deal structuring and licensing to operations and compliance. Contact us for advice tailored to your project.
This article has been quality-reviewed by the FLAW AI Legal Council
