Vietnam Individual Tax Guide

Vietnam

Ho Chi Minh City GMT +7

EY

Bitexco Financial Tower, 20th Floor

2 Hai Trieu Street District 1

Ho Chi Minh City Vietnam

Executive and immigration contacts

Robert M. King +84 (28) 3629-7744

Fax: +84 (8) 3824-5250 Email: robert.m.king@vn.ey.com

Anh Kim Ngo +84 (28) 3629-7780 Fax: +84 (8) 3824-5250 Email: anh.kim.ngo@vn.ey.com

Hanoi GMT +7

EY

8th Floor, CornerStone Building

16 Phan Chu Trinh Street

Hoan Kiem District

Hanoi Vietnam

Executive and immigration contacts

Huong Vu +84 (24) 3211-6662

Fax: +84 (4) 3831-5090 Email: huong.vu@vn.ey.com

Huyen Nguyen +84 (24) 3211-6166 Fax: +84 (4) 3831-5090 Email: huyen.thi.nguyen@vn.ey.com

A. Income tax

Who is liable. Under the Personal Income Tax (PIT) Law, taxpay ers are resident and nonresident individuals who have income that is subject to tax.

The following individuals are considered to be residents for tax purposes:

• Persons residing in Vietnam for an aggregate of 183 days or more in a calendar year or in a continuous 12-month period, beginning on the first date of arrival. In calculating the number of days, the arrival and departure dates are counted as one day in total.

• Persons having a permanent residence in Vietnam, including a registered residence that is recorded on the Permanent or Temporary Resident Cards of foreigners or a house lease that has a total term of 183 days or more. The total term of a lease equals the sum of the lease terms for different leased locations in a tax year, including hotels, motels, working places and offices.

If an individual has a permanent residence as mentioned above, but stays in Vietnam for less than 183 days in a tax year and can

prove that he or she is a tax resident of another country, he or she is treated as a Vietnam tax nonresident in that tax year. The document required to prove tax residency of a foreign country is the original tax residency certificate issued by the foreign tax author ity. If a foreign country that signed a double tax treaty with Vietnam does not issue the tax residency certificate for its tax resident, the expatriate employee may use the passport with the day in and day out of Vietnam to prove the resident days in Vietnam.

An individual who does not meet the conditions to be a tax resi dent of Vietnam is considered a Vietnam tax nonresident.

Tax year. The Vietnamese tax year is the calendar year. However, if an individual stays in Vietnam for less than 183 days in the calendar year of arrival but more than 182 days in the first 12 consecutive months, the first tax year is the 12-month period from the date of arrival. Subsequently, the tax year is calendar year.

For tax resident individuals who are citizens of countries having double tax treaties with Vietnam, their tax obligation is calculated from the month in which they arrive in Vietnam. An expatriate employee is only required to file the tax return to report the taxable income in Vietnam until the terminated date of assignment. This is determined based on the letter of confirmation from the employer for the last working day in Vietnam.

Income subject to tax. Residents are taxed on their worldwide income, while nonresidents are taxed on their Vietnam-source income.

Under the PIT Law, the following 10 types of income are subject to tax:

• Income from business

• Income from employment

• Income from capital investment

• Income from capital transfers

• Income from transfers of real property

• Income from royalties

• Income from franchising

• Income from winnings or prizes

• Income from the receipt of inheritances

• Income from the receipt of gifts

The taxation of various types of income is described below.

Income from employment. Employment income includes all cash remuneration and benefits in kind (for example, salaries, wages, bonuses, allowances, premiums, directors’ fees and remunera tion, housing benefits [with a tax concession; see next para graph], income tax and benefits paid by the employer, and other payments for employment services rendered). Progressive tax rates ranging from 5% to 35% apply to both Vietnamese and expatriate residents (see Tax rates), while a flat rate of 20% applies to nonresidents. Income received in foreign currency is converted to Vietnamese dong when calculating taxable income. If the income is remitted to an individual’s bank account in Vietnam, the actual buying exchange rates of the bank where the individual’s income is received must be used. If the individual’s

bank account is maintained outside Vietnam, the buying exchange rate of the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) on the payment date must be used.

Rental payments, including utilities and related services, made by an employer on behalf of an employee are taxable based on the lower of the amount actually paid and 15% of total taxable income (excluding taxable housing, utilities and service fees). A housing benefit is considered to be net income if the company pays the tax and accordingly a tax-on-tax calculation is required. The full amount of utilities paid separately with the rental are subject to tax.

Hypothetical tax and the housing norm are deductible before grossing up the net-of-tax income to the gross-of-tax income.

Life insurance is taxed at the time of payout. If the insurance is bought from an insurance company that is established and oper ated under Vietnamese law, the insurance company is responsible for withholding 10% on the relevant accumulated premium con tributed by the employers from 1 July 2013 at the maturity date of the contract. If the employer buys life insurance for its employ ees from an insurance company that is not established in Vietnam but allowed to sell in Vietnam, the employer must withhold tax of 10% of the premium before paying the net income to its employees.

The following are the principal categories of employment income that are exempt from tax:

• One-off allowance for relocation to Vietnam for an expatriate employee and from Vietnam to overseas for a Vietnamese national based on a labor contract or an assignment letter. The exemption also extends to a Vietnamese individual residing overseas on a long-term basis and returning to Vietnam to work.

• School fees paid by the employer from kindergarten to high school education for the children of expatriate employees working in Vietnam and Vietnamese nationals working overseas.

• Home leave round-trip air tickets for expatriate employees and Vietnamese nationals working overseas once a year.

• Payment for housing, electricity, water supply and associated services (if any) for housing built by the employer to provide for employees at industrial parks or for housing built by the employer in an economic zone, a disadvantaged area or an extremely disadvantaged area, to provide for its employees.

• Certain benefits in kind provided on a collective basis if the beneficiaries of such benefits cannot be determined (for exam ple, membership fees, entertainment and health care).

• Mid-shift meals arranged directly by the employer or paid in cash to employees up to the amount stipulated in the labor regulations.

• Stationery, per diem for business trips and telephone expenses per the company’s policies.

• Uniforms within the limits of the prevailing regulations.

• Cost of training for the improvement of the professional skills of employees as per the policy of the company.

• Rotation cost (for example, airfare, expenses related to use of helicopters to transport rotators from the mainland to a rig offshore and vice versa and hotel costs incurred during the days waiting for the flight to a rig offshore) for expatriate employees

working in Vietnam in a number of specific industries, such as petroleum and mining.

• Retrenchment, redundancy and unemployment allowances, in accordance with the guidelines stipulated in the Labor Code.

• Financial support from an employer’s after-tax fund for an employee and his or her family members with respect to cures or medical treatment for fatal diseases.

• Cost of transportation for employees from home to work and vice versa in accordance with the company policy.

• The voluntary and non-accumulated insurance premiums paid by the employer (for example, health insurance and accident insurance, including voluntary insurance bought from an insur ance company that is not established and operating under the Vietnamese law). The exemption does not apply to insurance schemes under which the participants are entitled to receive accumulated premiums at the maturity date of the insurance contract.

• Funeral and wedding support provided by employers to their employees and their employee’s family under the company policy. The exemption is limited to the amount prescribed in the corporate income tax regulations.

• Work permit-related expenses provided by employers for expa triate employees to allow them to legally work in Vietnam.

Income from business. Business income is income derived from production and business activities, including agriculture, forest ry, salt production, aquaculture and fishing, as well as income from independent practice in the fields that are licensed or certificated as prescribed.

Tax residents and nonresidents, including individuals and groups of individuals and households who engage in production and trading activities with respect to goods and services in all fields as stipulated by laws, are subject to tax on business income (including value-added tax [VAT] if applicable and PIT). An exception applies to individuals with total annual revenue equal to or less than VND100 million.

Income from business activities is subject to a flat tax rate, which varies by sector and type of services (see Tax rates).

Various methods for tax calculation, declaration and remittance exist for individuals having business income including the payment of tax on a deemed basis, payment of tax on ad hoc transac tions and payment of tax for individuals having income from asset leasing, as well as for individuals deriving income as insur ance agents, lottery agents or multilevel sales agents.

The amount of tax payable is determined using the following calculations:

• VAT payable = VAT taxable income x VAT rate

• PIT payable = PIT taxable income x PIT rate

For purposes of the above calculations, the following rules apply:

• Taxable income equals the gross revenue from sales, commis sions and services rendered in the production and trading of goods and services in the relevant tax period.

• The tax year is the calendar year.

• Tax rates applied on revenue vary depending on the business sectors (see Tax rates).

nam

An individual engaged in business who hires 10 employees or more is required to set up a corporation in accordance with the Enterprise Law, prepare documentation and invoices in accor dance with the Vietnamese accounting regulations, and pay cor porate income tax.

Income from capital investment. Income from capital investment includes the following:

• Interest on loans granted to organizations, enterprises, business households in accordance with loan agreements, except for interest paid by banks and credit institutions

• Dividends

• Profits from other forms of capital contributions, including capital contributions in the form of commodities, reputation, land-use rights and inventions, except for income after payment of corporate income tax of private companies and singlemember limited liability companies under the ownership of individuals

• Interest on bonds, treasury bills and other valuable instruments, except for bonds issued by the Vietnamese government

Income from capital investment paid to tax resident and tax non resident individuals is taxed at a rate of 5%.

Income from capital transfers. Income from capital transfers includes the following:

• Gains derived by individuals from the transfer of capital contri butions in limited liability companies, partnerships and share holding companies. The assessable income from transferring contributed capital equals the transfer price minus the purchase price of the transferred capital and reasonable expenses related to the generation of the income from the transfer of capital. A 20% tax rate is applied to the gains of tax resident individuals and 0.1% tax is applied to the sales proceeds of tax nonresident individuals.

• Income from securities transfers, including income from trans ferring shares, stock options, bonds, treasury bills, fund certifi cates and other securities according to the regulations of the Law on Securities, and income from transferring shares of persons in joint stock companies according to the Law on Enterprises.

Income from the transfer of real property. Income from the transfer of real property includes the following:

• Income received from the transfer of land-use rights, residential houses and other assets attached to land

• Transfer of ownership or rights to the use of residential houses, lease rights to land or water surfaces and other rights to real property

Assessable income from real property transfers is the price agreed in the transfer contract at the time of transfer. A tax rate of 2% is applied to the transfer price.

Income from royalties. Income from royalties is income derived from the assignment or transfer of the right to use intellectual property rights or objects including literary, artistic and scientific works, copyrights, inventions, industrial designs, trademarks, technical know-how and similar items. Assessable income equals the amount of the royalties in excess of VND10 million,

according to the transfer contract, regardless of the number of payments the taxpayer receives.

Income from franchising. Income from franchising is income derived by an individual from a franchising contract under which the franchisor authorizes the franchisee to purchase and sell goods or provide services in accordance with conditions imposed by the franchisor. Assessable income equals the amount of the franchise fee in excess of VND10 million based on the contract, regardless of the number of payments the taxpayer receives.

Income from winnings or prizes. Income from winnings or prizes is income derived from winnings in cash or in kind in excess of VND10 million from lotteries, betting, promotional prizes and similar items. Assessable income equals the amount of the prize in excess of VND10 million, determined on a transaction basis.

Income from the receipt of inheritances or gifts. Income from the receipt of inheritances or gifts is income in excess of VND10 million derived by an individual under a testament or law from the receipt of inherited or gifted assets, including securities, contributed capital, real property and other assets that are required to be registered. The amount of assessable income is determined when the procedures are completed for the transfer of ownership or the transfer of the right to use the asset or when the taxpayer receives the gift.

Tax exemptions. Certain types of income are exempt from tax, including the following:

• Income from the transfer of real property by inheritance or gifts between husband and wife, parents and children including adoptive parents and adopted children, parents-in-law and children-in-law and grandparents and grandchildren, and between siblings

• Income from the transfer of a residential house or right to use residential land and assets attached to land by an individual who has one sole residential house and/or land-use right in Vietnam, subject to certain conditions

• Interest on money deposited at banks or credit institutions, interest from life insurance policies and interest from govern ment bonds

• Income in foreign currency received from Vietnamese residing overseas

• Overtime premium amount over the normal wage or salary that is paid in accordance with the Labor Code

• Pensions paid by the Social Insurance Fund under the Law on Social Insurance, and monthly pensions from voluntary pen sion funds

• Scholarships

• Compensation payments from life and non-life insurance contracts, compensation for labor accidents and other state com pensation payments

• Income received from charitable funds or from foreign-aid sources for charitable or humanitarian purposes

• Income from winning prizes in casinos

Tax reduction. Foreign experts working for official development assistance projects or with respect to programs or plans of nongovernmental organizations in Vietnam are exempt from tax if

they meet certain conditions. They must submit an application for exemption as required by law.

Taxation of employer-provided shares. Shares provided to employ ees are taxable as employment income and taxed at the time of transfer or sale. The taxable income equals the value of the shares recorded in the employer’s accounting books. Income from the transfer of the awarded shares is also subject to capital gains tax (see Income from capital transfers).

Tax deductions. The deductions described below are available to tax residents who have employment income.

Personal and dependent relief. Personal relief of VND11 million per month is automatically granted to resident individuals who derive employment income. Dependent relief of VND4,400,000 is granted for each eligible dependent. No limit is imposed on the number of dependents. However, an eligible dependent must meet certain conditions with respect to income, age and his or her relationship with the taxpayer. A registration dossier for qualified dependents is also required to be submitted to the tax authorities.

Mandatory contributions. Mandatory social, health and unem ployment insurance contributions, including mandatory contribu tions by expatriates to overseas schemes in the home country, with the same nature as the compulsory insurance schemes in Vietnam, are deductible from employment income for PIT purposes.

Contributions to charity. Certain contributions to registered charitable, humanitarian or study promotion funds are deduct ible.

Contributions to voluntary retirement funds. Contributions to voluntary pension funds, which are established in accordance with the Ministry of Finance’s guidance, are deductible from tax able income. However, the deduction is capped at VND1 million per month for both employer and employee contributions.

Contribution to the disaster prevention fund. The contribution to the disaster prevention fund established in accordance with Decree 94/2014/ND-CP is deductible. This is a compulsory employee contribution to the government’s disaster prevention fund. The contribution equals one day of salary per year (based on the regional minimum salary).

Foreign tax credit. Tax paid on foreign-sourced income in other countries may be claimed as a credit against the tax liability in Vietnam. However, the amount of the credit may not exceed the amount payable in accordance with the Vietnamese tax scale that is assessed and allocated to the part of the income arising over seas. To claim the foreign tax credit, an application and required supporting documents must be filed with the tax authorities together with the year-end finalization dossier.

Tax rates

Employment income. The table below presents the progressive tax rates on employment income of resident individuals. To cal culate the tax due by using the table, multiply the taxable income by the tax rate and then subtract the bracket adjustment. The fol lowing is the table.

Residents’ average monthly assessable income Bracket Exceeding Not exceeding adjustment VND VND Tax rate VND

250

750 18,000

1,650 32,000

3,250

5,850 80,000

9,850

Business income. The following table presents the PIT rates on business income for various activities, which apply to tax residents.

Deemed PIT Deemed VAT Business activities rate (%) rate (%)

Leasing and rental 5 5 Insurance and multilevel sales and lottery agent

5 Distribution and supply of goods 0.5 1 Services and construction without materials (no supply of materials)

5 Production, transportation, services associated with goods and construction with materials

3 Other business activities

2

The following table presents the PIT rates on business income for various activities, which apply to tax nonresidents.

Deemed PIT Business activities rate (%)

Distribution and supply of goods 1 Supply of services 5 Production, construction, transportation and other activities 2

Other non-employment income. The following fixed tax rates are imposed on income derived by resident individuals other than employment and business income.

Type of income Tax rate (%)

Income from capital investment 5 Income from royalties and franchising (exceeding VND10 million) 5 Income from winnings or prizes (exceeding VND10 million) 10 Income from inheritances (exceeding VND10 million) 10 Income from capital transfers 20 Income from security transfers 0.1 Income from property transfers 2

The following tax rates apply to nonresident individuals.

of income

Income from employment

Income from capital investment

Income from royalties and franchising (exceeding VND10 million)

Income from winnings or prizes (exceeding VND10 million)

Income from capital transfers

from transfers of real property

B. Social security

The following are the statutory contribution rates for employers and employees with respect to social security, health insurance and unemployment insurance from 1 June 2017.

Social Health Unemployment insurance insurance insurance

Companies operating in industries with a high risk of occupa tional diseases and accidents are entitled to a lower contribution rate of 0.3% to the social insurance fund for occupational dis eases and accidents instead of the normal rate of 0.5% if certain conditions are met.

The social and health insurance contribution is calculated based on the salary or wage, allowance and additional payments stated in the labor contract. However, it does not exceed 20 times the common minimum salary provided by the government. Effective from 1 July 2019, the capped salary for the social and health insurance contribution is VND29,800,000 (VND1,490,000 x 20). The common minimum salary may change from year to year according to the government’s decision.

The unemployment insurance contribution is only required for Vietnamese employees and calculated based on the salary or wage, allowance and additional payments stated in the labor con tract. However, it does not exceed 20 times the regional minimum salary, which currently ranges from VND3,070,000 to VND4,420,000 and varies for each city and province. These ranges apply from 1 January 2020.

Social insurance and health insurance apply to both Vietnamese and expatriate employees working in Vietnam. From 1 December 2018, social insurance applies for foreigners who sign labor con tracts with Vietnamese entities with a term of 12 months or more and having a work permit or practice license or certificate. From 1 December 2018 until 1 January 2022, short-term schemes (sickness, maternity, occupational diseases and accident) will take effect first. From 1 January 2022 onward, the above shortterm schemes and long-term schemes (retirement and death) will take effect in full.

Companies also have an obligation to contribute to the trade union fund at 2% of the base salary subject to the social insurance

contribution for employees who are required to make social insurance contributions.

C. Tax filing and payment procedures

Organizations and individuals must withhold income tax from income paid to resident and nonresident individuals with respect to income from employment, capital investments, capital trans fers (including transfers of securities), royalties, franchising, and winnings and prizes.

Declaration and payment of tax on employment income by income payers must be made on a monthly basis by the 20th day of the following month. If the income payer is eligible to declare VAT on a quarterly basis or the operating form of the income payer has no revenue from goods or services, declaration and payment of tax on employment income can be made on a quarterly basis. The amounts paid throughout the year are reconciled with the total tax liability at the year-end. An annual tax return of the income payers must be submitted and any additional tax must be paid by the last day of the third month following of the end of the calen dar year.

Individuals receiving a salary from overseas are required to file tax returns on a quarterly basis by the last day of the first month of the following quarter. An individual year-end finalization of income tax is also required, and any amounts due must be paid by the last day of the fourth month following the end of the calendar year.

Finalization is required if any of the following circumstances exist:

• The tax payable exceeds by more than VND50,000 the tax withheld or paid.

• The individual is eligible for a tax refund.

• The individual is a resident foreigner who terminates a Vietnam assignment.

An individual deriving income from the transfer of real property must declare tax and file a tax return together with the documents relating to transfer of ownership or right to use the real property. The tax must be paid in accordance with the tax notice.

An individual deriving income from the transfer of capital must declare tax when he or she performs procedures for the transfer of the capital. The tax must be paid in accordance with the tax notice issued by the tax authorities.

An individual deriving income from inheritances or gifts must declare tax each time the income arises. The tax declaration must be submitted when the procedures for the transfer of ownership or rights to the use of the inherited or donated assets are con ducted.

For resident individuals deriving income arising from overseas, employment income is declared on a quarterly basis and an annual basis. Other types of income (capital investment, capital transfer, transfer of real property, royalties, franchising, win nings, inheritances and gifts) must be declared within 10 days after the date the income arises or is received.

A Vietnamese company that signs a contract with the foreign contractor who assigns its expatriate employees to work in Vietnam to perform the service is required to notify the Vietnamese tax authorities of the list of these expatriates (includ ing name, nationality, working period, job title and estimated income) within seven days before they arrive to work in Vietnam.

D. Tax treaties

Vietnam has entered into double tax treaties with the jurisdictions listed below. Exemption under double tax treaties is not automatic in Vietnam and an application must be filed before relying on the exemption.

Algeria* Ireland Poland Australia Israel Portugal Austria Italy Qatar* Azerbaijan Japan Romania Bangladesh Kazakhstan* Russian Belarus Korea (North) Federation Belgium Korea (South) San Marino*

Brunei Kuwait Saudi Arabia

Darussalam Laos Serbia* Bulgaria Latvia* Seychelles Cambodia Luxembourg Singapore Cameroon* Macau Slovak Republic Canada Malaysia Spain China Mainland Malta Sri Lanka Cuba Mongolia Sweden Czech Republic Morocco* Switzerland Denmark Mozambique* Taiwan Egypt* Myanmar Thailand Estonia Netherlands Tunisia* Finland New Zealand Turkey France North Macedonia* Ukraine Germany Norway United Arab Emirates Hong Kong Oman United Kingdom Hungary Pakistan United States* India Palestinian Authority* Uruguay Indonesia Panama Uzbekistan Iran Philippines Venezuela

* This treaty is not yet in force.

E. Entry visas

The sections below provide only the general standard business immigration requirements for a foreigner to work in Vietnam. Various requirements and practices are not described in this book. Professional advice should be obtained on a case-by-case basis.

All foreigners must have a passport or passport substitute papers that are valid for at least six months and a visa granted by the competent Vietnamese agencies, except for citizens of countries that have visa exemptions included in bilateral consular agree ments with Vietnam (Association of Southeast Asian Nations [ASEAN] member countries and Kyrgyzstan) or unilateral agreements with Vietnam (Denmark, Finland, France, Germany, Japan,

Korea [South], Italy, Norway, the Russian Federation, Sweden and the United Kingdom).

To legally enter Vietnam, foreigners must apply for a visa corre sponding to the entry purpose and provide supporting documents. After the visa is granted, the foreigner is responsible for acting in accordance with the registered purpose of entry, and this purpose should not be changed during the stay in Vietnam.

Foreigners entering Vietnam to work must submit the work permits or work permit exemption certificates in the visa application dossiers. Consequently, work permits or work permit exemption certificates must be obtained before the labor visa application dossiers are filed.

The validity of each visa type differs and corresponds to the sup porting documents in the visa application. For example, the maximum duration of a labor visa is 24 months, the maximum duration of an investor visa is 5 years, and the maximum duration of a business visa is 12 months.

The current processing time is five working days from the date of filing.

F. Work permits

A work permit is required for a foreign national to legally work in Vietnam, except for cases of work permit exemptions. This docu ment is granted only to a foreign national who is sponsored by an entity in Vietnam.

A foreigner who enters Vietnam to work for intervals of up to 30 days and no more than 3 times per calendar year as a manager, executive director, specialist or technician is not required to obtain a work permit.

Procedure and standard timeline. The sponsoring entity in Vietnam must submit the demand for using foreign nationals working in Vietnam to the relevant government’s body at least 30 days before recruiting or transferring the foreign nationals to work in Vietnam. Within 15 days after receiving the demand, the local DOLISA responds to the sponsoring entity in writing regarding the accep tance or refusal of the demand. This letter is considered to be a pre-approval for using foreign employees in Vietnam. This preapproval letter is one of the compulsory documents for application dossiers for work permit issuances, work permit reissuances and work permit exemptions.

A work permit application must be filed with the local DOLISA at least 15 business days before the expected commencement date for the employee. The current processing time at the local author ity is five business days.

Required documents in work permit application dossiers that are issued in foreign countries must be legalized in the country of issuance to be recognized in Vietnam. Depending on the diplo matic relations between Vietnam and the country of issuance, the steps required to legalize the documents may vary. Consequently, the total processing time for work permit applications may take one to three months or more.

A work permit can be granted with a maximum validity period of two years and can be extended one time for an additional two-year period. Foreign nationals who wish to remain in Vietnam for more than four years must apply for a new work permit after completing four years in Vietnam.

Qualification requirements. A foreign national who wants to work in Vietnam must meet the required qualifications for a preapproval position. The following are the three main categories of positions that foreign nationals may apply for a work permit in Vietnam and the related qualification requirements:

• Management experience is required for managers, executives or higher positions according to the definition in the Law on Enterprise.

• At least three years of relevant professional experience and a bachelor, engineering or equivalent or higher degree are required for specialists. Alternatively, the specialist must have five years of overseas working experience and have a practitio ner certificate related to the position applied for in Vietnam.

• A minimum one-year training certificate and three years of relevant experience is required for technicians. Alternatively, the technician is required to have at least five years of experi ence corresponding to the job position to which he or she will be appointed in Vietnam.

In addition to the above qualifications, foreign nationals will generally fall into one of two major categories: intra-company transfer and local hires. An intra-company transfer must have worked for his or her home employer for at least 12 consecutive months prior to the work permit application. The local hire must sign a local employment contract with the sponsoring entity in Vietnam. Both intra-company transfers and local hires must sub mit documentation proving that they meet the necessary criteria.

Work permit exemptions. Under the current Labor Code and the decree on work permits, 20 cases of work permit exemptions exist. The following are typical examples of individuals who are exempt from the requirement to obtain a work permit in Vietnam:

• A foreigner who enters Vietnam to work for up to 30 days and no more than 3 times per calendar year

• A foreigner who is a contributing member or owner of a limited liability company whose individual capital contribution is at least VND3 million

• A foreigner who is a member of the board of directors of a joint stock company whose individual capital contribution is at least VND3 million

• A foreigner who is married to a Vietnamese citizen and residing in Vietnam

• A foreigner who is an intracompany transferee of corporations operating within 11 service industries listed under Vietnam’s World Trade Organization commitments

In general, to satisfy the work permit exemption, at least 10 busi ness days before the date the foreign national is supposed to begin work, the sponsoring entity must submit the work permit exemp tion application to the respective local authority for the place where the foreign national will work regularly.

The local DOLISA issues a written certificate to the employer within five working days after the date on which a sufficient

application is received. A written response and explanation are provided if the work permit exemption application is rejected.

G. Temporary residence card

The temporary residence card serves as a multiple-entry visa with a minimum term of one year. The maximum term of the tempo rary residence card is subject to the term of the work permit, the work permit exemption certificate, the validity of the business license and the applicant’s passport.

A temporary residence card is granted to a foreigner who has a valid work permit or work permit exemption certificate with duration of over one year and his or her legal spouse and children under 18 years old. Documents proving the relationships between the principal applicant and the dependents must be legalized and translated into Vietnamese for the temporary residence card appli cation.

This card can only be granted after the applicant has entered Vietnam using the correct visa. The current processing time at the local authority is five business days from the date of the filing of the application.