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Paying severance allowance for foreign employees: Key considerations for employers

As businesses in Vietnam increasingly employ foreign workers, issues relating to employee entitlements upon termination of employment have become a matter of growing concern. One frequently raised question is whether foreign employees are entitled to severance allowance, particularly given that they are not subject to Vietnam’s unemployment insurance regime. This article analyzes the current legal framework governing severance allowance entitlements and the method for determining the employment period used to calculate severance allowance for foreign employees.   1. Conditions for foreign employees to receive severance allowance   According to Article 46 of the Labor Code 2019 and Clause 1 Article 8 of Decree No. 145/2020/ND-CP, an employer is required to pay severance allowance to an employee upon termination of the labor contract if all of the following conditions are satisfied:   The labor contract is terminated under Clauses 1, 2, 3, 4, 6, 7, 9, or 10 of Article 34 of the Labor...
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Golden opportunities at the Viet Nam international financial center: Extraordinary privileges and advantages for investors

With the promulgation of  Resolution No. 222/2025/QH15  on the International Financial Center in Vietnam (“ Resolution 222 ”) and its detailed guiding Decrees, the Vietnam International Financial Center (VIFC) in Ho Chi Minh City and Da Nang City has officially become a “special financial zone” backed by a breakthrough regulatory framework. Below is a summary of the 5 core advantages available to VIFC Members:   1. Ultra-incentive tax policies   One of the most attractive features of the VIFC is the unprecedented tax incentives within the current legal system, optimizing profit margins for investors:   Corporate Income Tax (CIT):  Projects operating in investment sectors prioritized for development are entitled to a preferential tax rate of 10% for 30 years, a tax exemption for a maximum of 4 years, and a 50% reduction for the subsequent 9 years. For projects outside the priority list, the tax rate is 15% for 15 years, with a tax exemption for a maximum of 2 years, and a...
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Outward investment with capital under 7 billion VND to establish a company operating in non-conditional business lines

According to the provisions of the Law on Investment 2020 , an Investor transferring investment capital from Vietnam abroad to conduct business investment activities must apply for an Outward Investment Registration Certificate (“ OIRC ”), regardless of the investment capital amount or whether the business lines abroad are conditional or not.   However, the Law on Investment 2025 (effective from March 1, 2026) and Decree No. 103/2026/ND-CP (effective from April 3, 2026) have minimized administrative procedures related to outward investment activities. According to Clause 1 Article 18 of Decree No. 103/2026/ND-CP , for outward investment projects with a capital level  under 7 billion VND  that do  not  fall under conditional outward investment business lines or business lines prohibited from outward investment, the Investor is not required to perform procedures for the issuance of an OIRC.   Conditional outward investment business lines include : Banking; Insurance; Securities; Pre...
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Defusing the “ticking time bomb” of contingent liabilities in M&A transactions: A practical legal guide for 2026

Against the backdrop of Vietnam’s mergers and acquisitions (M&A) market in 2026, which is shifting toward substantive development and rigorous screening, the due diligence of a target company has evolved far beyond superficial financial analysis. A target company may boast impressive revenue metrics, a loyal customer base, or market leadership, yet all of this value can be instantly wiped out by invisible financial “black holes”. These are contingent liabilities—financial or legal obligations that have not officially crystallized at the time of transfer but remain latent, poised to be triggered by future uncertain events.   For the Buyer, failing to identify and establish effective legal safeguards in the Share Purchase Agreement (SPA) or Capital Transfer Agreement means inadvertently inheriting these “ticking time bombs”. Consequently, identifying, assessing, and structuring mechanisms to address contingent liabilities is recognized as one of the most critical aspects of legal du...
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Vietnam’s investment policy in 2026: Tightening controls or opening further?

Vietnam’s investment policy entered a significant new phase in 2026 with the official entry into force of the Law on Investment 2025 (Law No. 143/2025/QH15) on 1 March 2026. Replacing the previous legal framework, the new law is expected to unlock economic resources, enhance the investment environment, and strengthen Vietnam’s competitiveness in attracting both domestic and foreign investment.   Against the backdrop of increasing global economic uncertainty, foreign investors and local businesses alike are seeking a clear answer to an important question:  Is Vietnam’s investment policy moving toward tighter regulatory control to mitigate risks, or toward greater openness to capture growth opportunities?  The answer is not merely of academic interest. It has direct implications for market entry strategies, investment structuring, business expansion plans, and long-term compliance obligations.   This article examines the key changes introduced under the new investment framework and ana...
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