Question:
Currently, the General Director and the Chief Financial Officer of our company (both of whom are foreigners) have been issued a confirmation that they are not subject to work permit requirements under the category of intra-company transferees, valid from May 15, 2025 to April 24, 2027. In this case, is our company permitted to sign labor contracts and pay salaries to these two individuals?
Answer:
According to Article 2 of Decree No. 152/2020/ND-CP, foreign employees working in Vietnam under (i) a labor contract and (ii) an intra-company transfer are two separate categories. In accordance with this regulation, for foreign employees entering Vietnam under the “intra-company transfer” category, the enterprise is not required to sign a labor contract.
Vietnamese law does not prohibit the signing of labor contracts and payment of salaries to such individuals. However, if your company signs a labor contract with these employees, it may lead to the following legal consequences:
+ The company would be required to contribute to social insurance for them.
+ The company would be required to obtain a work permit for them.
In practice, some companies adopt the following arrangement: the parent company pays the employee’s salary, while the subsidiary in Vietnam pays a management/support service fee to the parent company. This fee essentially serves as the financial source to cover the salaries of the employees who are seconded to support or manage the subsidiary.
