Variance found in enforcement of quarterly reporting requirement

23 Jan 17

VIET NAM

IMPACT – MEDIUM

What is the change? Companies that were previously thought to be required to file new quarterly foreign labor reports may not need to do so after all—at least for the time being.

What does the change mean? Application of the quarterly reporting requirement varies from city to city. For now, authorities in Hanoi have confirmed that they will only require quarterly foreign labor reports from contractors who use foreign labor. Authorities in Ho Chi Minh City, however, have said they will apply the requirement to all companies employing foreign nationals, both local hires and assignees.

  • Implementation time frame: Ongoing.
  • Who is affected: Companies employing or assigning foreign nationals in Vietnam.
  • Business impact: The variance in enforcement may mean that some companies will not be required to file quarterly reports that, until now, were thought to be mandatory.
  • Next steps: Additional changes or clarifications to quarterly reporting requirements are possible. BAL will continue to follow the matter and alert clients to any significant developments.

Background: Authorities issued Circular 40 in December, providing guidance on how to implement Decree 11, which introduced new rules for foreign employees. The decree and circular stated that contractors employing foreign nationals would be required to submit a quarterly report using a new form. However, as noted above, there appears to be variance in how authorities in different parts of the country are enforcing the new requirement.

BAL Analysis: Companies with questions about whether they are subject to quarterly reporting requirements for foreign workers should contact BAL. While Hanoi’s current position that the reports are only required for contractors could ease paperwork requirements for some, companies should err on the side of caution. Authorities have said they will impose penalties of between 1 and 2 million dong (about US$45 to $90) for those who are required to file quarterly reports but fail to do so.

This alert has been provided by the BAL Global Practice group and our network provider located in Vietnam. For additional information, please contact your BAL attorney.

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