New work permit application classification for intragroup transfers

15 September 2017

 

SUMMARY:  New work permit application classification now accepted by HCMC Labor Department eases key requirement for intragroup transfers. In English, the new classification is called “Manager, Executive Director, Expert and Technical Worker”. For this alert, we will shorten this classification to “MEDET”.

IMPACT:  High (for those companies wishing to send employees to work in Vietnam for another company within a group of companies)

EFFECTIVE:  Immediately (In Ho Chi Minh City Only) 

BACKGROUND:  Typically, in HCMC companies who want to send their employees to Vietnam under an Intracompany Transfer Work Permit Classification, are required to produce an assignment letter from the Investor Entity (the overseas investor entity that is listed on the Vietnamese business licenses).  Also required for the Intracompany Transfer is that the employee must have at least 12 months working experience for the Overseas Investor Entity. For many Multinational Companies sending foreign employees to Vietnam, they cannot meet this requirement as the employee normally is being transferred from some other entity or location within the business group. If the employee is not being transferred directly from the Overseas Investor Entity, the only way to apply for a work permit as a “local hire” - with local labor contract. , not Intracompany Transfer.

The new MEDET classification only requires that the employee has at least 12 months working experience within the group of companies related to the Investor Entity. This means the employee does not have to have a working experience with the Overseas Investor Entity. 

REQUIREMENTS FOR WORK PERMIT APPLICATIONS UNDER THE MEDET CLASSIFICATION:

·        The Assignment Letter still needs to come from the Overseas Investor Entity but needs only state the entity within the group of companies that the applicant will be sent from to Vietnam. The Assignment Letter also should mention the working experience duration the employee has spent at the company.

·        Like for an intracompany transfer, under the MEDET work permit classification, the employee may remain on foreign payroll - No local labor contract required. 

·        The Working Testimonial can come from an entity in the group related to the investor and must contain the same info as the Assignment Letter with regard to location from which the transferee will originate from and duration of working experience with the company.

·        A proof of the relationship of the companies may also be required especially if these entities do not have a common entity name

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