Chinese investors cannot simply transplant a “Chinese-style HR machine” into Vietnam: the two countries’ labor laws differ on technical points, and each difference directly affects compliance costs. Here are 10 key differences between Vietnam’s Labor Code 45/2019/QH14 and China’s Labour Contract Law (LCL) — with cost implications for investors.
1. Types of labor contracts: 2 in Vietnam, 3 in China
Vietnam — Article 20, Labor Code 2019: only 02 types of labor contracts exist: definite-term (no more than 36 months) and indefinite-term. Note: when a definite-term contract expires and the employee keeps working for more than 30 days without a new contract, it converts to an indefinite-term contract.
China — Articles 12–15 LCL: 03 types: fixed-term, non-fixed-term (open-ended), and task-based contracts (for the completion of a certain task).
Implication: China’s contract structure is more flexible in form; in Vietnam, employers have only two “boxes” for staffing.
2. Employee-initiated termination: notice periods
Vietnam — Article 35.1, Labor Code 2019 (the employee’s right to unilaterally terminate; Article 36 covers the employer’s right — do not confuse them): employees must give at least 45 days’ notice (indefinite-term contracts), 30 days (definite-term contracts of 12 to 36 months), or 03 working days (definite-term contracts under 12 months). Article 35.2 also allows termination without notice in certain cases (e.g., unpaid wages, maltreatment, sexual harassment at work).
China — Article 37 LCL: employees must give 30 days’ written notice; during probation only 03 days. Article 38 permits immediate termination when the employer violates the law; Article 39 lists grounds for employer-initiated termination when the employee is at fault.
Implication: in Vietnam, employee notice periods are significantly longer for indefinite-term contracts (45 days vs. 30 in China).
3. Open-ended contracts: China is stricter
Vietnam: no “after two renewals” rule; conversion mainly operates through Article 20 (expiry + 30 days of continued work without a new contract).
China — Article 14 LCL: after two consecutive fixed-term contracts, the employer must conclude a non-fixed-term contract if the employee so requests; employees with 10 years of continuous service may demand one; where no written contract is concluded within one year of employment, a non-fixed-term contract is deemed concluded.
Implication: in China, employers cannot keep renewing fixed-term contracts indefinitely — after two rounds, the initiative shifts to the employee.
4. Maximum probation periods
Vietnam — Article 25, Labor Code 2019: up to 180 days (enterprise managers); 60 days (college degree or higher); 30 days (intermediate level, technical workers); 06 working days (ordinary labor). Only one probation period per job.
China — Article 19 LCL: contracts of 3 months to under 1 year → probation of up to 01 month; 1 year to under 3 years → up to 02 months; 3 years or more, or non-fixed-term → up to 06 months. Only one probation period with the same employer; Article 20 sets probation wages at no less than 80% of the contractual wage.
Implication: Chinese probation is tied to contract length; Vietnamese probation is tied to qualifications — and 180 days for managers is a major difference.
5. Severance pay: China is double Vietnam
Vietnam — Article 46, Labor Code 2019: severance of 1/2 month’s salary per year of service, counted only for periods not covered by unemployment insurance (detailed in Article 8 of Decree 145/2020/ND-CP).
China — Articles 46–47 LCL: severance of one month’s salary per year of service (6–12 months counts as one year; under 6 months counts as half a month). Cap: if the salary exceeds 3 times the local average wage, it is calculated at 3 times the average, for a maximum of 12 years.
Implication: China’s base rate is double Vietnam’s — workforce reduction costs in China are significantly higher.
6. Overtime: caps and pay rates
Vietnam — Article 107, Labor Code 2019: maximum 40 hours/month, 200 hours/year (300 hours/year for special industries/cases); Article 98: rates of 150%/200%/300%.
China — Article 41, Labour Law 1994: overtime capped at 36 hours/month; overtime pay rates of 150%/200%/300% similar to Vietnam.
Implication: China’s monthly overtime cap (36 hours) is lower than Vietnam’s (40) — relentless overtime schedules are harder to sustain in China.
7. Maternity leave
Vietnam — Article 139, Labor Code 2019: female employees are entitled to 06 months of maternity leave.
China: basic maternity leave of 98 days under central rules (Special Provisions on Labour Protection of Female Employees 2012); provinces and cities add extra days — e.g., Beijing 158 days total, Guangdong 178 days, many provinces 180–190 days (secondary data, varies by locality).
Implication: maternity costs in Vietnam exceed China’s central baseline; check local top-ups when investing in Chinese provinces.
8. Retirement age: Vietnam’s stable roadmap, China’s ongoing reform
Vietnam — Article 169, Labor Code 2019: a roadmap raising the retirement age: men from 60 to 62 (by 2028), women from 55 to 60 (by 2035).
China — reform in progress since 01/01/2025: under the NPC Standing Committee decision (adopted 13/9/2024), China is raising the statutory retirement age over 15 years: men from 60 to 63; women in managerial/technical roles from 55 to 58; women workers from 50 to 55. Do not use the old figures (60/55/50) for long-term workforce planning.
Implication: China’s retirement age is a moving target — pension and long-term contract calculations must use the new roadmap, not the old numbers.
9. Social insurance for foreign workers: mandatory in both directions
Chinese nationals working in Vietnam: subject to compulsory social insurance when the labor contract has a term of at least 12 months — under Article 2.2 of the Social Insurance Law 41/2024/QH15 (effective 1/7/2025, replacing the 2014 Law) and Decree 158/2025/ND-CP (effective 1/7/2025, replacing Decrees 115/2015 and 143/2018). Note: Decree 143/2018 is no longer in force. Exclusions: intra-corporate transferees; those past retirement age; cases covered by international treaties.
Vietnamese nationals working in China: mandatory participation in 5 social insurance schemes under the Interim Measures for Participation in Social Insurance by Foreigners Working in China (MOHRSS, 6/9/2011, effective 15/10/2011). Vietnam and China have no bilateral social insurance agreement → no exemption available.
Implication: social insurance costs arise in both directions, with no bilateral exemption mechanism.
10. Work permits for foreign workers
Vietnam — Decree 219/2025/ND-CP (effective 7/8/2025, replacing Decree 152/2020 — do not cite 152/2020): the demand-explanation and work-permit application procedures are merged into one step, 10 working days; the expert standard is reduced to 02 years of experience (01 year for priority fields); executive-director positions add a 03-year experience requirement.
China: a work-permit plus residence-permit system applies to foreigners — check the current rules when deploying, as policies on foreign employment in China may be adjusted.
Implication: Vietnam’s work-permit procedure has been significantly simplified since August 2025 — an advantage when bringing Chinese experts over.
Bonus 1: The union’s role in termination
Vietnam — Articles 42–44, Labor Code 2019: mass layoffs for economic reasons require consultation with the employee representative organization and prior notice to the state labor authority.
China — Article 43 LCL: an employer unilaterally terminating a contract must notify the trade union in advance. China-specific note: the ACFTU is the country’s sole trade union organization.
Bonus 2: Minimum wages
Vietnam: minimum wages by Regions I–IV, set by the Government and adjusted periodically.
China: minimum wages set by provincial/municipal governments, with wide regional gaps (Shanghai, Beijing and Guangdong among the highest) — do not quote absolute figures without a current 2026 source.
Recommendations for Chinese investors
- Do not copy-paste HR policies: each of the 10 differences above can break a cost budget if applied mechanically;
- Update to the new instruments: Decree 219/2025 (work permits) and Decree 158/2025 (social insurance) both took effect in mid-2025 — any internal document citing Decree 152/2020 or Decree 143/2018 is outdated;
- Calculate severance correctly: when planning restructuring in China, remember the one-month-per-year rate (double Vietnam’s) and the 3-times-local-average cap;
- Track China’s retirement-age reform: the 15-year roadmap from 01/01/2025 directly affects long-term contracts and pension funds;
- Do not infer which side “protects workers more”: each point is a technical difference with its own cost/compliance implications — assess case by case.
Frequently asked questions
Do Chinese nationals working in Vietnam have to pay social insurance?
Yes, if the labor contract has a term of at least 12 months — under Social Insurance Law 41/2024 and Decree 158/2025/ND-CP (except exclusions such as intra-corporate transferees).
Is Decree 143/2018 on social insurance for foreigners still in force?
No. Decree 143/2018 is no longer in force, replaced by Decree 158/2025/ND-CP (effective 1/7/2025).
How long does a Vietnamese work permit take under the new rules?
Under Decree 219/2025/ND-CP, the procedure is merged into one step with a 10-working-day timeline.
In China, can fixed-term contracts be renewed indefinitely?
Hardly. Under Article 14 LCL, after two consecutive fixed-term contracts, the employer must conclude a non-fixed-term contract if the employee so requests.
Sources
- Labor Code 45/2019/QH14 (effective 1/1/2021): Articles 20, 35.1–35.2, 25, 46, 98, 107, 139, 169, 42–44;
- Decree 219/2025/ND-CP (effective 7/8/2025, replacing Decree 152/2020) — foreign workers in Vietnam;
- Social Insurance Law 41/2024/QH15 (effective 1/7/2025): Article 2.2;
- Decree 158/2025/ND-CP (effective 1/7/2025, replacing Decrees 115/2015 and 143/2018) — guiding the Social Insurance Law;
- Decree 145/2020/ND-CP: Article 8 (severance pay);
- Labour Contract Law (effective 1/1/2008, amended 2012): Articles 12–15, 19, 20, 37–39, 43, 46–47;
- Labour Law 1994 (China): Article 41 (overtime capped at 36 hours/month);
- Social Insurance Law (effective 1/7/2011) + Interim Measures for Participation in Social Insurance by Foreigners Working in China (6/9/2011);
- Special Provisions on Labour Protection of Female Employees (2012) — 98 days maternity leave;
- NPC Standing Committee decision on progressively raising the statutory retirement age (13/9/2024, effective 1/1/2025).
For reference only; not legal advice. This content was drafted by AI and will be quality-checked by the AI Legal Council of FLAT Law Firm before publication review; it is not legal advice from a human lawyer. Regulations may change; please check the current legal texts before relying on this information.
Related articles
Does your Chinese company need a labor-compliance review in Vietnam? Contact FLAT Law Firm for advice.
