Vietnam details compulsory insurance for foreign employees

HANOI - Vietnam's long-awaited Decree providing detailed guidance on compulsory social insurance applicable to foreign employees working in Vietnam will take effect from December 1. Contributions and entitlements related to each benefit regime will come into effect on different dates.

In a Client Alert, lawyers Baker McKenzie say the contribution rates imposed on both employers and foreign employees will ultimately be the same as those applicable to Vietnamese employees - 8% from employees and 17.5% from employers, based on the salary used to contribute compulsory social insurance, which is capped at 20 times the applicable general minimum salary as provided by the Government.

From December 1, 2018 to December 31, 2021, the Employer contribution will be 3.5%, made up of 3% for the fund of illness and maternity and 0.5% for the fund of labour accidents and occupational diseases.

During this period there will be no contribution from the employee.

From January 1, 2022 onwards, the Employer contribution will be 17.5%, including 3% for the fund of illness and maternity, 0.5% for the fund of labour accidents and occupational diseases and 14% for the fund of retirement and survivorship.

 The Employee contribution will be 8% for the fund of retirement and survivorship.  www.bakermckenzie.com (ATI).