Question 178. How is the maximum term of a LC for a foreign Employee? After entering into two definite-term LCs with the same Employer in Vietnam, if both parties still wish to continue the employment relationship and agree to sign the third LC, shall the third LC be an indefinite-term LC as the regulations apply to a Vietnamese Employee?


The Vietnamese laws do not refer to the foreign Employees’ rights as similar as the Vietnamese one. Accordingly, if any foreign Employee wishes to work legally in Vietnam, he or she must be granted a work permit by a competent labour management authority, except for some statutory exceptions. Additionally, the maximum term of a work permit is 02 years, therefore, while the Vietnamese Employee is allowed to sign a LC with a definite-term up to 36 months or indefinite-term, the foreign Employee is only allowed to sign a LC with a maximum term of 02 years, and it is only renewed once for a period of up to 02 years[1]. This regulation is intended to comply with the maximum term of work permit as mentioned above. However, the foreign Employee and the Employer have their full right to enter into a definite-term LC for unlimited time within the work permit term in case both parties wish to continue the employment relationship and comply with the recruitment regulations on foreign Employees.

However, there is still an unclear provision as to whether any foreign Employee who is exempt from work permit according to the law, such as those who are married to Vietnamese and live in the Vietnamese territory or those who are owners or capital contribution members of limited liability companies, members or chairman of the board of directors of joint-stock companies, are able to enter into the third LC which have an indefinite-term with the Employer in Vietnam?

[1] Article 19 of Decree 152/2020/ND-CP of the Government dated 30/12/2020