Vietnam – Expatriates May Participate Social Insurance | KPMG | GLOBAL

Vietnam – Expatriates May Participate in Social Insurance System

Vietnam – Expatriates May Participate Social Insurance

This report covers the planned application of Vietnam’s social insurance scheme to expatriates working in the country starting 1 January 2018.



Related content

Flash Alert 2017-188

Starting 1 January 2018, expatriate employees working in Vietnam under work permits, practicing licences, or certificates issued by Vietnamese competent authorities, are allowed to participate in Vietnam’s social insurance (“SI”) scheme.


Vietnam is not a signatory to any international social security agreement.  If participation in the SI scheme becomes compulsory, an employee who continues to participate in his or her home country’s social insurance scheme will be subject to social insurance contributions in two countries.

In some cases, depending on domestic law and whether the employee is coming from a “high cost” social insurance scheme, the social insurance costs borne by the employee in Vietnam may be lower.  As a result, this could ease employers’ social insurance-related international assignment costs.

If the employee discontinues participating in his or her home country scheme, if permitted, and begins participating in Vietnam’s, adjustments to payroll / withholding will be required.


Under current regulations, Vietnamese employees are subject to compulsory social insurance (SI), health insurance (HI), and unemployment insurance (UI).  Expatriate employees, on the other hand, are generally subject only to HI. 

On 20 November 2014, the National Assembly issued Law 58/2014/QH13, broadening the applicable “objects” of compulsory SI.  The Vietnamese SI scheme provides coverage for illness, maternity, occupational diseases and accidents, retirement, and death.  The aforementioned “objects” include expatriate employees working in Vietnam under work permits, practicing licences, or certificates issued by Vietnamese competent authorities.  The law mentioned that these expatriates are allowed to participate in the compulsory SI scheme effective 1 January 2018. 

Allowed or Required?

Given the wording “allowed”, it is unclear whether expatriates will in fact be required to participate in the SI scheme or will be subject only to voluntary participation.  Further, the said law did not differentiate expatriates who have a local labour contract from those who are under assignment/secondment letters to Vietnam. 

There have been some recent notable developments:

  • The national and some local social insurance authorities issued Decision No. 595/QĐ-BHXH on 14 April 2017 and Official letter No. 1734/BHXH-QLT on 16 August 2017, which provide the authorities’ views on SI participation for expatriates. 
  • A draft decree providing guidance on the compulsory nature of the insurance scheme for expatriates has recently come to light.  The draft decree appears to narrow the subject of application.  Specifically, expatriates who have a local labour contract and are working under a work permit or practicing license or certificate issued by competent authorities in Vietnam are subject to the compulsory SI contribution scheme. The draft decree is still under discussion and yet to be approved.
  • The SI contribution scheme for expatriates will be officially applied from January 2018.  It is important to note, as a common practice in Vietnam, where the guiding decree is released later, the rules may still apply retroactively.   

Rates and Base

Currently, the SI contribution rates are 17.5 percent for employers and 8 percent for employees.  The SI contribution base includes base salary, allowances, and other “regular” payments.  Similar to the SI scheme applied for Vietnamese employees, the monthly employment income subject to SI for expatriate employees will be capped at 20 times the base salary set by the Vietnamese government.  At present, this cap is VND 26 million per month (which will increase to VND 27.8 million from July 2018), thereby making a maximum combined employer and employee contribution of VND 6.63 million or approximately USD 290 per month. [VND 1 = GBP 0.0000328 | VND 1 = USD 0.000044 | VND 1 = EUR 0.000037 | VND 1 = AUD 0.000057]

Next Steps

Employers with expatriate employees in Vietnam and those planning to come to live and work in Vietnam should be vigilant regarding this development, given the brief timeframe expected for its application.  

The Global Mobility Services team with the KPMG International member firm in Vietnam will endeavor to keep you updated on this matter.  We will aim to issue another GMS Flash Alert when the official Decree is issued by the Vietnamese government.

The information contained in this newsletter was submitted by the KPMG International member firm in Vietnam.

© 2018 KPMG Limited, a Vietnamese limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Connect with us


Request for proposal