Official Letter No. 10861/BNV-CLV – Guidelines on Salary Payment to Foreign Employees working under “intra-company transfer”
On November 19, 2025, the Ministry of Home Affairs issued Official Letter No. 10861/BNV-CVL in response to the Advisory Council for Administrative Procedure Reform under the Prime Minister and the Japan Chamber of Commerce and Industry in Vietnam (JCCI) regarding issues related to domestic salary payment for foreign employees (“FE”) working under “intra-company transfer” (“ICT”). The main contents are as follows:
1. Opinion of the Ministry of Home Affairs
According to the Official Letter, the Ministry affirms that “foreign employees paid salaries in Vietnam” and “intra-company transfer” are two distinct cases under the Labor Code No. 45/2019/QH14 and its implementing regulations. Specificaly:
(i) Case where foreign employees are paid salaries in Vietnam:
- Enterprises must apply for a work permit under the form “working under labor contract”;
- Enter into a labor contract in accordance with Vietnamese law;
- Participate in compulsory social insurance as prescribed;
(ii) Case where foreign employees work under the form of “intra-company transfer”
- Enterprises must apply for a Certificate of exemption from work permit issuance under Article 8 of Decree No. 219/2025/NĐ-CP.
From the above guidance, it can be understood:
- If foreign employees receive salaries in Vietnam, the relationship between the enterprise and the employee is determined as a labor relationship, and the enterprise must fully comply with obligations regarding work permits, labor contracts, and insurance.
- If foreign employees work under the ICT scheme, the enterprise must apply for a certificate of exemption from work permit issuance or a work permit under the ICT category, and must not pay salaries from the enterprise in Vietnam.
2. Recommendations: Based on the guidance of the Ministry of Home Affairs, VBK recommends clients to:
- Review and select the correct form of employment for foreign employees before applying for a work permit
- If choosing the ICT form, enterprises should not sign labor contracts and should not pay salaries to foreign employees in Vietnam;.
- Conversely, if salary payment arises, enterprises must:
-
- Sign a labor contract;
- Apply for a work permit under ” working according to the labor contract” form;
- Participate in compulsory insurance schemes as required.
Corporate Income Tax (CIT) Consideration:
From a CIT standpoint, if the Company pays remuneration to foreign employees working under the intra-company transfer (ICT) arrangement, such payments may be deemed non-compliant with labor regulations. Consequently, there is a risk that these expenses — including salaries, bonuses, and other salary-related payments may not be treated as deductible expenses for CIT purposes.
VBK will continue to monitor updates from state authorities and promptly inform clients when further guidance is issued.
For detailed information, please refer to the link.
