The concepts of Work Permit (WP) Exemption and Non-Requirement are completely distinct yet frequently confused, leading businesses to skip the mandatory WP Exemption Reporting Procedure and incur heavy fines. Specifically, cases involving Investor WP Exemptions or Family-based WP Non-Requirements have separate procedures. This article provides a detailed analysis of the latest regulations under Decree 219/2025/ND-CP, helping businesses, especially FDI companies undergoing Foreign Investment Business Establishment, to fully grasp their legal obligations and ensure total compliance.
- What is the Difference between WP Exemption and Non-Requirement?
- Legal Framework Analysis under New Decree 219/2025/ND-CP
- WP Exemption (Exemption) – Mandatory Reporting Cases
- WP Non-Requirement (Non-Requirement) – No Reporting Needed
- Risks and Solutions: Ensuring Compliance
- Conclusion: Compliance is the Key to Stability
What is the Difference between WP Exemption and Non-Requirement?
In the management of foreign labor in Vietnam, the Work Permit (WP) is a basic requirement. However, the law allows for two categories of exceptions:
WP Exemption (Article 7, Decree 219):
The worker is fundamentally subject to WP requirements but is waived by law due to specific criteria (e.g., job title, short duration, nature of work). This group MUST perform the Reporting Procedure for the authorities to acknowledge and confirm the exemption status.
WP Non-Requirement (Article 154, Labor Code & Decree 219):
The worker is not considered a subject requiring a WP under the Labor Code, often due to a special connection to Vietnam (e.g., major Investor, Spouse of a Vietnamese Citizen). This group DOES NOT need to perform the Exemption Reporting Procedure.
The key difference lies in the reporting obligation. Failing to report for Group 1 is an administrative violation; reporting for Group 2 is redundant, wasting time and resources.
Legal Framework Analysis under New Decree 219/2025/ND-CP
1. Legal Basis and Scope
Decree 219/2025/ND-CP (effective August 7, 2025) has replaced Decree 152/2020/ND-CP and its amending documents. This new document clarifies many concepts and procedures but maintains the core distinction between “Exemption” and “Non-Requirement.”
- Scope: Decree 219 governs all activities related to the recruitment and management of foreign workers in Vietnam, including cases that are exempted or non-required.
- Goal of Decree 219: To reduce some administrative procedures while emphasizing the reporting responsibility, particularly for exempted cases.
2. Defining WP Exemption and Non-Requirement
3. Legal Consequences of Misclassification
Misclassification between these two groups is the main cause of legal risk:
- Mistaking Exemption for Non-Requirement: The business fails to submit the WP Exemption Report (Form 01/PLI) for Group 1. Result: Administrative fines from VND 50 million to 75 million for using foreign labor without a valid license/confirmation document.
- Mistaking Non-Requirement for Exemption: The business wastes time and costs performing unnecessary reporting procedures for Group 2 (e.g., Investors), causing delays in other procedures like applying for a Temporary Residence Card (TRC).
WP Exemption (Exemption) – Mandatory Reporting Cases
This is the group requiring the most stringent management from the business. If your foreign worker falls under any of the following cases, REPORTING IS MANDATORY.
1. Common WP Exemption Cases and Reporting Requirements
Decree 219/2025/ND-CP specifies about 15 cases for WP exemption (Article 7). The most common in FDI businesses include:
- Intra-Company Transferees: Workers holding management, executive, expert, or technical titles appointed internally (applies to 11 WTO service sectors).
- Workers in Vietnam for under 90 days/year: The new Decree 219/2025/ND-CP removes the limitation on the number of entries (previously 3 times/year), but the total working time must be under 90 days in one calendar year.
- Note: Although exempted, Decree 219 requires the business to still send a written notification to the competent authority at least 03 working days prior regarding this case (Article 9.4).
- Persons responsible for establishing a commercial presence: Foreigners entering Vietnam to establish a company or representative office for a period not exceeding 12 months.
- Performing service contracts: Foreigners entering to provide services in the 11 WTO sectors for under 03 months.
2. Procedure and Deadline for WP Exemption Reporting (Form 01/PLI)
- Deadline: At least 03 working days before the foreign worker is scheduled to start working. A one-day delay can result in administrative fines.
- Receiving Authority: Provincial Department of Labor, War Invalids and Social Affairs (DoLISA) or Management Boards of Zones (Industrial Zones, Export Processing Zones) where the worker is employed.
- Confirmation Document: After receiving a valid application file, the managing authority will issue a written confirmation of the worker’s WP exemption. This is the most crucial legal evidence replacing the WP.
3. Documents Required to Prove Eligibility
The application file must prove the worker’s exemption eligibility and compliance with other regulations:
- Notification/Report Document: According to Form 01/PLI (Decree 219/2025/ND-CP).
- Identity Papers: Passport (certified copy).
- Exemption Proof Documents: Appointment/Transfer Decision, Service Contract, documents proving professional qualifications/experience… (must be consular legalized, translated, and notarized).
WP Non-Requirement (Non-Requirement) – No Reporting Needed
These are the “lucky stars” who require neither a WP nor a WP Exemption Report. Understanding this group significantly saves time and costs for Work Permit Services.
1. Deep Dive: Investors with Capital Contribution of VND 3 Billion or More
According to Decree 219/2025/ND-CP, a foreigner who is the owner or capital contributing member of a limited liability company (LLC)/Joint Stock Company (JSC) will NOT be subject to WP requirements if the capital condition is met:
- Capital Threshold: Capital contribution of VND 3 billion or more.
- Procedure: NO NEED to perform the WP Exemption Report (Form 01/PLI).
- Required Documents: The business only needs to present the Enterprise Registration Certificate or Investment Registration Certificate showing the investor’s capital contribution for other procedures (Visa, TRC).
- Note: If the investor contributes under VND 3 billion or holds a Director title without being a contributing member/Board member, they are still subject to WP requirements or another WP exemption, which necessitates reporting.
2. Deep Dive: Relatives (Spouses) who are Vietnamese Citizens
This is a case of exemption based on relationship/marriage rather than employment.
- Condition: Legally married to a Vietnamese citizen and residing in Vietnam.
- Procedure: NO NEED to perform the WP Exemption Report.
- Required Documents: Marriage Certificate (certified copy) is the primary legal basis for the worker to apply for a family-based TRC (TT) and work in Vietnam.
3. Other Non-Requirement Cases
Other non-required WP cases include: foreign lawyers with a practicing license in Vietnam, persons entering Vietnam for under 03 months to resolve complex technical issues, students/interns undergoing practice/research… These cases also do not need to perform the WP Exemption Reporting Procedure (Form 01/PLI).
Risks and Solutions: Ensuring Compliance
1. Administrative Fines for Failing to Report Exemption
According to Decree 12/2022/ND-CP, the act of failing to perform the WP Exemption Reporting procedure for the “Exemption” group is heavily penalized:
- Fines: From VND 50,000,000 to 75,000,000 for the violating business.
- Additional Consequence: Forced deportation of the foreign worker, causing business interruption.
2. Impact of Compliance on Visa, TRC, and Work Permit Services
Compliance with the reporting procedure is a prerequisite for immigration procedures:
- Temporary Residence Card (TRC): The WP Exemption Confirmation Document (or the Investor/Marriage Certificate) is a mandatory document for the foreign worker to be granted a TRC.
- Visa Extension: Ensuring the legality of employment is a condition precedent for the immigration authorities to consider.
- Work Permit Service: Correct classification helps your Work Permit Service provider give accurate advice, avoiding unnecessary costs.
3. Benefits of Using Accounting/Legal Consulting Services
In the context of the changing Decree 219/2025/ND-CP, using a professional consulting unit helps:
- Accurate Classification: Ensures your personnel are correctly classified as “Exempt” (needs reporting) or “Non-Required” (no reporting needed).
- Deadline Guarantee: Performs the WP Exemption Report correctly at least 03 working days prior, avoiding fines for delay.
- Standardized Application file: Ensures foreign documents are fully translated, notarized, and consular legalized, avoiding application file rejection.
Conclusion: Compliance is the Key to Stability
The distinction between WP Exemption and Non-Requirement is not just a theoretical issue but a practical requirement that determines your business’s legal compliance in Vietnam. With the new regulations under Decree 219/2025/ND-CP, businesses must proactively review their foreign personnel to ensure that all cases falling under the “Exemption” category have been fully reported.
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