Gross salary isn’t the real cost — social insurance and mandatory contributions pile on top. China and Vietnam structure them differently. This article compares the framework — specific rates change over time, so check current texts.
1. Mandatory items in Vietnam
- SI: social insurance — pensions, survivorship;
- HI: health insurance — medical care;
- UI: unemployment insurance;
- Union: union dues;
- Split: employees and employers — both contribute.
2. Mandatory items in China
- Overview: five insurance types — pension, medical, unemployment, injury, maternity;
- Fund: the housing fund — separate;
- Split: employees and employers — both contribute;
- Details: rates vary by city — ask advisers;
- Compare: similar structure — different details.
3. Contribution rates: check current
- Rule: don’t use old rates — they change;
- Vietnam: check the current SI law — latest rates;
- China: check per city — rates differ;
- Total: adding the employer portion — as % of salary;
- Model: modelling costs — for your headcount.
4. Contribution caps per country
- Concept: caps — high salaries contribute only to the cap;
- Vietnam: caps tied to base salary — check current;
- China: caps tied to average wages — per locality;
- Meaning: high salaries — SI costs don’t scale linearly;
- Model: applying caps — when modelling.
5. Do foreigners pay social insurance?
- Vietnam: foreign workers with permits — may have to contribute;
- Transfers: intra-group transferees — possible exemption, check current;
- China: its separate rules — consult advisers;
- Double: avoiding double contributions — agreements;
- Advice: specific cases — ask specialists.
6. Total employment cost
- Formula: gross salary plus employer SI plus allowances;
- Compare: computing for the same role — both countries;
- Hidden: hidden costs — hiring, training, attrition;
- Productivity: dividing by productivity — unit cost;
- Conclusion: low wages aren’t necessarily cheap — totals decide.
7. Minimum wages and impact
- Vietnam: regional minimum wages — periodically adjusted;
- China: minimum wages — per locality;
- Impact: SI contribution bases — follow wages;
- Monitor: updating — annually;
- Forecast: rising trends — long term.
8. SI arrears: consequences
- Fines: administrative fines — for late payment;
- Interest: late-payment interest — compounding;
- Criminal: evasion — potentially criminal;
- Reputation: published debtor lists;
- Prevention: paying on time — automatically.
9. SI registration in Vietnam
- Register: registering the entity — first time;
- Report: reporting increases/decreases — promptly;
- Pay: paying monthly — on time;
- Reconcile: reconciling — periodically;
- Digital: electronic transactions — mandatory.
10. Quick comparison: the cost table
- Items: listing — per country;
- Rates: checking current — not old;
- Caps: applying — high salaries;
- Total: adding — as % of salary;
- Conclusion: modelling — for your scale.
11. SI for seasonal workers
- Rule: contracts above a duration — must contribute;
- Short-term: separate rules — check current;
- Reality: many businesses miss — penalised;
- China: ask advisers — separate rules;
- Comply: don’t dodge — seasonal.
12. SI policy changes
- Trend: rising gradually — both countries;
- Monitor: updating — annually;
- Forecast: factoring into long-term plans;
- Advice: specialists — on big changes;
- Proactive: don’t be passive.
13. Voluntary benefits beyond mandatory
- Insurance: voluntary health insurance — attracting;
- Pension: supplementary pensions — retention;
- Compare: benefit packages — hiring competition;
- Cost: counting into totals — labour costs;
- Strategy: benefits — a hiring weapon.
14. SI inspections: preparing
- Files: complete — registrations, payrolls;
- Match: matching — SI vs PIT;
- Explain: a designated explainer;
- Remedy: paying up — if short;
- Regular: self-checking — periodically.
15. Two-country SI checklist
- Mandatory items — listed?
- Current rates — checked?
- Caps — applied?
- Foreigners — handled?
- Total employment cost — computed?
- Registration and payment — on time?
16. Payroll outsourcing: pros and cons
- Pro: expertise — on tap;
- Pro: compliance — handled;
- Con: cost — monthly fees;
- Con: dependence — on the vendor.
16. EVFTA origin rules: specific criteria
- Tariff shift: changing HS headings — sufficiently;
- Value content: regional value — meeting thresholds;
- Process: specific processing — as prescribed;
- Look up: the annex — per product;
- Apply: each shipment — checking.
17. Self-certification of origin (REX) — EU GSP
- Mechanism: exporters self-declare — replacing Form A;
- Register: a REX number — with authorities;
- Liable: responsible — for correctness;
- Keep files: retaining — for post-clearance checks;
- Risk: errors — back taxes.
18. Back-to-back C/O in ASEAN
- Concept: re-issuing a C/O — in the transit country;
- Condition: goods not further processed;
- Purpose: logistics — via distribution hubs;
- Procedure: the transit authority — issuing;
- Note: only when qualified.
19. Cumulation of origin
- Concept: materials from member states — counted together;
- EVFTA: cumulation — with the EU;
- ASEAN: cumulation — intra-bloc;
- Benefit: easier to meet criteria;
- Condition: meeting — treaty terms.
20. Vina Solar: detailed lessons
- Case: solar panels — duty circumvention;
- Finding: Chinese components — simple assembly;
- Result: duties applied — as Chinese goods;
- Lesson: simple processing — no origin change;
- Apply: every sector — similarly.
21. Restructuring the solar supply chain
- Issue: dependence — on Chinese components;
- Fix: localising — step by step;
- Invest: component plants — in Vietnam;
- Time: long — not overnight;
- Strategy: phased — with a roadmap.
22. Origin evidence files: what to keep?
- Invoices: input materials;
- Norms: production consumption rates;
- Process: descriptions — of steps;
- Declarations: customs — import/export;
- Duration: keeping — for years.
23. Origin fraud: sanctions
- Administrative: fines — for violations;
- Back taxes: duty — differences;
- Criminal: smuggling — fraud;
- Reputation: losing — markets;
- Prevention: compliance — from the start.
24. Textiles and garments: origin pitfalls
- Fabric: Chinese fabric — cut and sewn in Vietnam;
- Rule: double transformation — often required;
- Risk: failing — the origin test;
- Fix: sourcing — qualifying fabric;
- Check: per product — per treaty.
25. Electronics: the value-content challenge
- Components: imported — high-value parts;
- Assembly: low local value-added;
- Threshold: meeting — regional value content;
- Strategy: localising — key components;
- Model: calculating — before shipping.
26. US enforcement trends: what to watch
- Focus: Southeast Asia — transshipment scrutiny;
- Sectors: solar, wood, steel — watched;
- Tools: audits — and on-site verification;
- Prepare: evidence — ready files;
- Advise: trade counsel — engaged.
27. Building an origin-compliance programme
- Owner: assigning — responsibility;
- SOP: writing — origin procedures;
- Train: training — procurement and logistics;
- Audit: internal — audits;
- Review: annual — programme reviews.
28. Wood and furniture: Lacey Act and EUDR angles
- US: the Lacey Act — timber legality;
- EU: the EUDR — deforestation rules;
- Vietnam: processing — Chinese timber inputs;
- Risk: origin — of raw timber;
- Prepare: traceability — systems.
29. Steel and aluminium: trade-remedy hotspots
- Duties: anti-dumping — many cases;
- Vietnam: processing — Chinese steel;
- Test: substantial — transformation;
- Watch: US/EU — investigations;
- Advise: trade — counsel early.
30. AEO and trusted-trader benefits
- AEO: authorised economic operator — status;
- Benefit: faster — customs clearance;
- Fewer: reduced — inspections;
- Apply: meeting — compliance criteria;
- Maintain: ongoing — compliance.
31. Record-keeping for origin audits
- Years: multi-year — retention;
- Digital: scanned — backups;
- Access: quick — retrieval;
- Assign: a records owner;
- Test: mock — audits.
32. Working with customs brokers on origin
- Choose: experienced — brokers;
- Brief: full — product information;
- Review: declarations — before filing;
- Keep: copies — of everything filed;
- Change: updating — brokers on rule changes.
33. Origin and ESG: the convergence
- Traceability: supply-chain — mapping;
- Buyers: demanding — proof;
- Systems: digital — traceability tools;
- Benefit: both — compliance and marketing;
- Start: now — building systems.
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