You may have already heard of some changes regarding compulsory insurances from 2018, among which being Social Insurance to be applicable to foreign employees. This is actually not stipulated in any new regulations but from Social Insurance Law 2014, which states that foreign employees can participate in Vietnam’s Social Insurance from 2018. However, it has been unclear on whether this is compulsory or voluntary. Only until the Official Letter No. 1734/BHXH-QLT issued by Ho Chi Minh Social Insurance Department dated 16 August 2017, it clearly states that foreign employees are required for Social Insurance contribution in Vietnam. We have been expecting an official Decree providing guidance/confirmation in this regard, following the most recent draft from mid-July 2017.
According to the draft Decree, the contribution rates are 8% and 17.5% for employee and employer respectively (on the salary as capped); the foreign employees will be entitled the same benefits as a Vietnamese such as sickness allowance, maternity allowance, labour accident and occupational disease allowance, survivorship allowance, pension (if satisfying the requirements). If leaving Vietnam, foreign employees can apply one-time claim for pension.
It should be implied that the employer shall also be required for trade union fee contribution for foreign employees from 2018 (equaling 2% of Social Insurance salary funds).
More information can be found on Mazars Vietnam website.
