Vietnamese labour code

The labour in Vietnam is primarily governed by the Vietnamese Labour Code, which came into effect on 1 January 1995. The Code provides a framework for labour relations in Vietnam and outlines the rights of employees. Specific provisions of the Labour Code are specifically addressed in subordinate legislation.


Employers have the right to recruit labour directly or through employment service agencies, and to increase or reduce the number of employees in accordance with business requirements and in compliance with the provisions of the law.

Employers must enter into labour contracts with employees. Labour contracts must comply with a prescribed form published by the Ministry of Labour, War Invalids and Social Affairs (MOLISA). In particular, labour contracts must contain the following provisions: nature of the work, working hours and rest breaks, wages rates, location of the job, duration of the contract, employment protection, conditions on occupational safety and hygiene, and conditions with respect of social insurance.

Under the Labour Code, labour contracts may be for an indefinite term, a definite term of one to three years, or for specific or seasonal jobs of less than one year.

Employers and employees may agree on a probationary period that must not exceed 60 days for work that requires special or highly technical skills and 30 days for other work. A probationary employee must not be paid less than 70% of the normal wage for that job.

An enterprise employing 10 or more employees must have internal labour rules governing matters such as work hours, safety conditions and disciplinary procedures. The internal regulations must be communicated to all employees and registered with the local Labour Department.

Employers may recruit foreigners for jobs requiring special expertise which Vietnamese workers cannot perform. Foreigners who work for Vietnamese enterprises, organisations, or individuals must obtain a work permit from the local Labour Department.

Work hours

Normal work hours in Vietnam are eight hours per day and six days a week. However, the standard working week for officials and public employees and employees in the administrative organisations is 40 hours (five days). Other organisations are encouraged to apply the standard working week of 40 hours. Employees who work eight hours consecutively are entitled to a 30-minute break, which should be included as time worked. Also, employees working night shifts are entitled to a 45-minute break and an additional allowance of at least 30% of their standard wage rate. The total number of overtime hours should not exceed four hours a day and 200 hours a year.

There are eight public holidays per year: New Year (1 January), Lunar New Year (4 days), Victory Day (30 April), International Labour Day (1 May), and National Day (2 September).

Employees who have been employed for 12 months are provided with minimum of 12 days of paid vacation per year.


The minimum wages for employees working in enterprises with foreign owned capital are:

Location Minimum wage
Urban districts of Hanoi and Ho Chi Minh city. VND626,000 per month
Suburban districts of Hanoi, Ho Chi Minh City and urban districts of Hai Phong, Bien Hoa and Vung Tau VND556,000 per month
Other regions VND 487,000 per month

Employees who work overtime are entitled to additional wages. The normal overtime rate must be at least 150% of the standard rate. On days off and public holidays the overtime rate must be at least 200% of the standard rate.

In enterprises employing ten or more employees, employers and employees are required to contribute to the State Social Insurance Fund. 15% of gross income is contributed by the employer and 5% is contributed by the employee. The Fund covers the employee benefits during sick leave, maternity leave, retirement, allowances for work-related accidents and occupational diseases, and survivors' benefits.

In addition, employers and employees are required to contribute to the State Health Insurance Fund to partially cover healthcare benefits. The contributions constitute 3% of gross income, with 2% being the responsibility of the employer and 1% the responsibility of the employee.

Expatriates are not required to contribute to the State social and health insurance funds.


An employer may unilaterally terminate a labour contract in certain circumstances specified in the Labour Code, but must give 45 days notice in respect of indefinite term contracts, 30 days notice in respect of definite term contracts and 3 days notice in respect of seasonal contracts. In some cases, the employer is required to discuss the termination and reach an agreement with the executive committee of the trade union.

An employee employed under a contract for an indefinite term may unilaterally terminate their contract at any time by giving 45 days notice to the employer. An employee may terminate a labour contract with a definite term or a seasonal contract in circumstances specified in the Labour Code, and must give 3 days or 30 days notice (depending on the given reason). Where an employee unilaterally terminates a labour contract, they may be required to pay compensation for the costs of training if this is specifically stated in the labour contract.

Where the labour contract of an employee employed for at least one year is terminated by either party, the employer must pay a retrenchment allowance equal to half a month's salary or one month salary plus allowances, depending on the reason for termination, for each year of employment. An employee who wrongfully terminates a labour contract will not be entitled to a retrenchment allowance.

Import/export activities

Import activities

When establishing a company

Businesses established under the Law on Foreign Investment can receive an exemption from import duties on the importation of equipment and machinery used to establish the capital of the investment. The Ministry of Trade must approve this exemption.

When operating

Normal import duty rates range from 0% to 150%. Goods imported from the 70 countries on Vietnam's list of Most Favoured Nations (MFN) can apply for preferential import duty rates, which are two-thirds of the normal import duty rates. In addition, Vietnam provides especially preferential duty rates on imports from other ASEAN countries under the Common Effective Preferential Tariff (CEPT) program.

Companies importing materials for producing goods for export can defer the payment of import duties on those materials for up to 275 days from receiving the tax assessment notice. If the finished products are exported within 275 days the import duties do not need to be paid. Otherwise the import duties must be paid and will be refunded when the goods are exported.

Export activities

Foreign invested enterprises may:

  • directly, or through agents, export products permitted under their investment licence
  • act as agents to export other enterprises' goods, providing they are permitted to produce the goods under their investment licence.
  • purchase goods for export or for further processing for export.
  • Export duty rates range from 0% to 45%.

    Contracting and purchasing

    Tendering procedures

    Regulations on tendering were issued in 1996 and amended in 1999 and 2000. The regulations are aimed toward achieving a unified management of tendering activities for the selection of consultants, procurement of materials and equipment, construction and installation, and selection of partners for implementing projects in Vietnam.

    Scope of application

    The following projects must comply with the tendering regulations:

  • Investment projects for the construction and procurement of assets.
  • Projects using State budget capital.
  • Joint venture projects, business co-operation contracts and shareholding companies where the State holds 30% or more of the legal capital, investment capital or equity.
  • Projects funded by aid from foreign organisations.
  • Investment projects requiring the selection of investment partners.
  • Other projects are also encouraged to apply the regulations.

    The tendering process must be organised and conducted in Vietnam.

    Conditions for international tendering

    International tendering may only be held if:

  • no domestic tenderers can satisfy the requirements of the tender
  • a foreign aid project specifically requires international tendering be held.
  • A foreign party participating in an international tender for construction and installation projects in Vietnam must enter into a partnership with a Vietnamese contractor or undertake to use Vietnamese sub-contractors. They must also clearly specify the scope of work, volume and relevant prices shared between the parties.

    Tenderers must procure materials and equipment from sources within Vietnam, if available.

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