FDI enterprises regularly hire foreign experts, managers, and technical workers. Many HR departments apply the exact same labor contract process used for Vietnamese employees — and that is the source of most violations. Here are seven points FDI enterprises should note when concluding labor contracts with foreigners.
1. Prerequisite: the worker must be eligible to work in Vietnam
Article 151 of the Labor Code 2019 (45/2019/QH14) requires foreign workers to simultaneously: be at least 18 years old with full civil capacity; possess professional/technical qualifications, skills, and work experience; meet health requirements; not be serving a sentence, have an unexpunged criminal record, or be under criminal prosecution; and hold a work permit issued by a competent Vietnamese authority — except exempt cases.
Employers should verify these conditions before signing, especially the work permit status.
2. Contract term must not exceed the work permit term
Clause 2, Article 151 is explicit: the term of a labor contract with a foreign worker must not exceed the term of the work permit. In practice, work permits are typically valid for up to 2 years, so the contract is locked to that term. When the permit is extended, the parties sign an appendix or a new contract accordingly.
3. Multiple definite-term contracts allowed — no “third contract” rule
A major difference from Vietnamese employees: for foreign workers, the parties may agree to conclude multiple definite-term labor contracts. The rule that “the third consecutive definite-term contract must convert to an indefinite-term contract” does not apply to foreigners, provided each contract respects the work permit term.
4. Work permit exemption for investors contributing VND 3 billion or more — but notification required
Under Article 7 of Decree 219/2025/ND-CP (dated 7 August 2025, on foreign workers in Vietnam):
- Foreigners who are owners or capital-contributing members with contributions of VND 3 billion or more in a limited liability company are not subject to work permits (clause 2);
- Chairpersons or members of the Board of Directors contributing VND 3 billion or more in a joint-stock company are not subject to work permits (clause 3).
Important: these cases do not require a work permit exemption certificate, but must notify the competent authority at least 03 working days before the expected start date (clause 4, Article 9). The notice includes: full name, date of birth, nationality, passport number, employer name, workplace, and working period.
5. No work while awaiting a permit — including probation
Probation is also a form of working in Vietnam. A foreigner still applying for a work permit does not meet the conditions to work, even on probation. Complete the work permit before the start date.
6. Contract contents and language
Contents follow the mandatory items of an ordinary labor contract (job, workplace, term, salary, working hours, social insurance). The job position must match the work permit. On language: use a bilingual Vietnamese-English (or Vietnamese-Chinese) version; in Vietnamese disputes, the Vietnamese text is generally used for interpretation.
7. Linked mandatory social insurance obligation
Foreign workers employed under definite-term contracts of 12 months or more must participate in compulsory social insurance (Article 2, Law on Social Insurance 2024, 41/2024/QH15) — even when exempt from work permits. Register SI participation as soon as the contract takes effect.
HR checklist
- Verify Article 151 Labor Code conditions before signing;
- Confirm a valid work permit and contract term within the permit term;
- Check exemption eligibility (investors of VND 3bn+) and file the 3-day notice;
- No probation or work before the permit is issued;
- Bilingual contract with the job position matching the permit;
- Register compulsory SI for contracts of 12 months or more.
Prepared by the FLAW AI Legal Council. This content is pending QA Council review before submission for approval.
