Mandatory social insurance for expat workers creates burden on enterprises

Mandatory social insurance for expat workers creates burden on enterprises By Thuy Dung Foreign workers are seen at a construction site in Vietnam – PHOTO: TL HANOI – Compulsory social insurance for foreigners working in Vietnam is creating a heavy burden on local enterprises, according to a report by the Investment and Trade Working Group of the Vietnam Business Forum. The group regards the payment of social insurance for expat workers in Vietnam as a kind of tax, noting that Vietnam thereby has the highest taxes in the region in terms of quantity, rates and large-scale application. The report also shows that the draft government decree on compulsory social insurance does not adjust the rule of an accumulating period of social insurance payment. For example, if a foreign worker has paid social insurance for five years in Thailand, and another five years in Singapore before coming to work in Vietnam, such periods are still not accumulated for the expat into Vietnam’s social insurance system under the new decree. According to the report, this rule is only applicable to nationals from countries with which Vietnam has signed bilateral agreements on social insurance. So far, the country has inked such deals with Germany and South Korea and targets Japan in the future. The 2014 Law on Social Insurance stipulates that expats with work permits and practice certificates in Vietnam must fully comply with social insurance payment requirements, which became effective from January 1. According to the draft decree providing guidelines for implementing… [Read full story]