Working in Vietnam as an Expat: A Quick Guide

In 2024, Vietnam ranked 8th among the top 53 destinations for global expatriates, according to the InterNations Expat Insider report. The country’s booming economy continues to drive a high demand for skilled talent, resulting in wages for foreign workers that exceed local market levels.

According to the Expat Insider 2024 report, Vietnam has ranked first in the Personal Finance category for three consecutive years. It also secured impressive positions in the Ease of Settling In (13th) and Working Abroad (14th) categories. These rankings highlight the abundant potential of Vietnam’s developing economy, enriched by its vibrant culture, lush landscapes, and diverse culinary offerings. Additionally, Vietnam’s low cost of living makes it an attractive destination for expatriates.

Despite these advantages, foreigners should be mindful of several technical and bureaucratic challenges when considering a move to this emerging Southeast Asian nation.

Working in Vietnam

Working in Vietnam requires a work visa. There are a number of visas with which an expat will be able to work. Among them, an expat’s most common form of visa is a standard work permit. This is known as an LD visa officially. It generally lasts for two years and is tied to the expat’s employer. This means that when an expat leaves their job, they will lose their work permit.

For more information see: Applying for a Vietnam Work Permit: Guidelines for Foreigners and Employers

Vietnamese labor contracts

Wages

According to the Expat Insider 2024 report, 86 percent of expatriates in Vietnam rate the general cost of living positively, more than double the global average of 40 percent. Remarkably, half of all respondents in Vietnam gave this factor the highest possible rating, the largest proportion among expatriates worldwide.

While the 2024 report does not include income data, the 2022 edition revealed that expatriates in Vietnam reported earning competitive salaries. The income distribution was as follows:

• 24 percent earned between US$25,000 and US$50,000 annually;
• 19 percent earned between US$50,000 and US$75,000 annually;
• 14 percent earned between US$75,000 and US$100,000 annually; and
• 8 percent earned more than US$250,000 annually.

Leave

Employees in Vietnam are entitled to 12 days of annual leave per year, in addition to the stipulated public holidays.

Foreign workers are granted an extra public holiday for their own national day and one additional traditional public holiday from their home country.

Social security

In Vietnam, compulsory social security can be broken down into three categories: social insurance, medical insurance, and unemployment insurance.

All employers in Vietnam must pay social security for employees on labor contracts, either definite or indefinite. Likewise, employees are also compelled to make contributions to their own social security funds.

For foreign employees, they are required to participate in health insurance if the duration of the employment contract is from 3 months to under 12 months. If the duration of the employment contract is 12 months or more, social insurance is included along with health insurance.

The rate of three types of mandatory social insurance for employees and employers is respectively 8 percent and 17.5 percent for social insurance, 1.5 percent and 3 percent for health insurance, and 1 percent for both parties for unemployment insurance.

For more information see: HR and Payroll in Vietnam

Investing in Vietnam

Setting up a business in Vietnam

Many expats find Vietnam a great place to live and work. However, there are a plethora of opportunities for investors. Opening hospitality venues like bars, restaurants, and cafes in Vietnam is very popular with expats. It can be relatively cheap to do and can be a great side project.

There are, however, a number of steps that need to be followed. This includes tax registration, seal carving, opening a bank account, labor registration, business license tax payment, charter capital contribution, and the public announcement of the establishment of the company

For more information see: Setting Up a Business in Vietnam

Starting an non-governmental organization (NGO)

There are myriad opportunities to make money in Vietnam for foreign investors. However, Vietnam is a developing country, and the needs of its people go beyond simply investment.

Many expats have set up NGOs in Vietnam already, but there is still more work to be done.

Establishing an NGO in Vietnam can be a fulfilling and worthwhile experience, but there are rules and regulations specific to this sector. Expats that intend to establish an NGO should understand the requirements thoroughly and abide by the criteria put forth by the government of Vietnam.

For more information see: How to Set Up an NGO in Vietnam

Paying tax in Vietnam

Personal Income Tax

Determining how much PIT should be paid involves understanding a number of regulations and rules embedded in Vietnam’s tax code. Foreign workers in Vietnam should be careful to calculate their liability accurately and fully.

For more information see: Personal Income Tax in Vietnam

Foreign Contractor Tax

Foreign companies dealing with Vietnamese companies may need to pay foreign contractor withholding tax. This tax is somewhat complex with a number of exemptions and different ways to calculate exact liability.

For more information see: Foreign Contractor Tax in Vietnam

Working in Vietnam: Challenging but rewarding

Overall, working in Vietnam as an expat can be a very rewarding experience. The low-cost of living and high wages for foreign workers can make saving money easy. Vietnam can also serve as a gateway to Asia with expats given the opportunity to travel throughout the region cheaply and easily.

That said, getting set up in Vietnam as an expat can be tricky. Acquiring work permits and investment visas can be overly bureaucratic and the same goes for starting a business or an NGO. With the right support and advice, however, the process can also be incredibly smooth.

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