To succeed in business in Vietnam, it is vital for both employers and employees to have a strong understanding of the business culture.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about Vietnamese work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Thailand to start your expansion well-informed.
International companies expanding into Vietnam will be taking part in one of the most remarkable economic stories of the last 30 years. Vietnam has left behind the world’s poorest nations and been transformed from a closed economy into an open one and a lower to middle income nation.
Since 2002 Gross Domestic Product (GDP) per capita has increased by almost three times, approaching US$ 3,000. Vietnam bucked the global trend in 2020 to increase GDP by 2.9% and it is predicted to grow by 6.6% in 2021.
This transformation has made Vietnam a driving force among the Association of Southeast Asian Nations (ASEAN) and an attractive target for Foreign Direct Investment (FDI) and multinationals including IBM, Microsoft, PepsiCo, Samsung, and Honda.
However, adjustments must be made. Dealing with financial institutions and tax authorities can be challenging, especially as there have been changes to tax filing, employment, and social security regulations since 2020. Western incomers also must deal with a vastly different workplace culture.
It’s time to ‘get down to business’! Our guide to work culture, business etiquette and employment requirements will help you take those important first steps.
The national minimum wage rates are region-based.
Regions 1 and 2 (covering Ho Chi Minh City and Hanoi urban and rural areas) have a monthly minimum of (Vietnamese Dong) VND 4.42million (US$183). Regions 3 and 4 (provincial cities) VND 3.43million (US$150).
Remainder of country – VND 3.07million (US$133). The rates apply across all sectors of commerce and industry.
Probationary or trial periods are agreed on a case-by-case basis, depending on the type of job and the qualifications or experience of the new employee.
The Labor Code allows for probation periods of six, 30, 60 or 180 days as agreed by the contract.
The Labor Code of 2020 stipulates working hours should not exceed eight per day and no more than 48 per week. Overtime, by mutual agreement, is restricted to four hours per day, 40 a month or 200 in 12 months.
Industries subject to seasonal variations, such as textiles and clothing, have an annual overtime maximum of 300 hours. Normal working hours are generally from 7.30am till 4.30pm, with a minimum of one free day per week. Workers should have at least one 30-minute break or a 45-minute break for night work.
Shift work is defined as where two people or two groups of workers share the same position in rotation for a period of 24 consecutive hours with a transition of up to 45 minutes between shifts
Any time worked over the agreed hours is overtime and should not exceed 50% of normal working hours to a total of 12 hours per day or 40 per month and 200 in the year.
Remuneration is paid at 150% above the hourly rate during a working day and 200% during days off, 300% for working during a public holiday or the following day off. Consent for overtime must be given by the employee.