In Which Cases Are Foreign Employees Exempt From Mandatory Social Insurance In Vietnam?

When employing foreign workers in Vietnam, many companies wonder whether all foreign employees are required to participate in compulsory social insurance (SI). In fact, current regulations provide several cases where foreign employees are exempt.

This article helps employers and employees understand clearly the cases where participation in mandatory social insurance is not required.

1. Legal Basis

Regulations on compulsory social insurance participation for foreign employees are based on:

• Law on Social Insurance 2014
  
• Decree No. 143/2018/ND-CP
  

Accordingly, not all foreign employees working in Vietnam are subject to compulsory social insurance.

2. Cases Exempt from Mandatory Social Insurance

2.1. Intra-company transferees
Foreign employees who are managers, executives, experts, or technical workers transferred within an enterprise from a foreign company to its commercial presence in Vietnam are not subject to compulsory SI.

This is common among multinational corporations.

2.2. Employees who have reached retirement age
If a foreign employee has reached the retirement age under Vietnamese labor law at the time of signing the labor contract, they are not required to participate in compulsory SI.

Therefore, employers should verify the employee’s age at the time of contract signing.

2.3. Cases under international agreements
If Vietnam and the employee’s home country have signed an international agreement on social insurance with different provisions, such agreement shall prevail.

In some cases, employees may be exempt in Vietnam if they are already covered by their home country’s social insurance system under bilateral agreements.

3. Conditions for Mandatory Participation

Foreign employees are required to participate in compulsory SI only when:

• They have a valid work permit, practicing certificate, or practicing license in Vietnam;
  
  
• They sign an indefinite-term contract or a definite-term contract of at least 1 year;
  
  
• They do not fall under the exemption cases mentioned above.
  

If any of these conditions are not met, the employee may not be subject to compulsory SI.

4. Important Notes for Employers

• Carefully determine the type of work permit and contract duration before declaring SI contributions.
  
  
• Incorrect contributions may result in back payments or complicated refund procedures.
  
  
• For exemption cases, supporting documents must be retained (e.g., transfer decision, proof of age, documents related to international agreements).
  

✅ Conclusion

Foreign employees are exempt from compulsory social insurance if they are intra-company transferees, have reached retirement age at the time of contract signing, or fall under applicable international agreements.

Employers should carefully review legal documents to ensure compliance and avoid unnecessary risks and costs.

Ngân Hồ