Comprehensive labor compliance solutions for FDI Enterprises in Vietnam

Date: 2026.01.05

Comprehensive labor compliance solutions for FDI enterprises in Vietnam

Vietnam is an attractive destination for FDI enterprises thanks to its stable environment, abundant workforce, and reasonable labor costs. However, according to reports from the Inspectorate of the Ministry of Labour – Invalids and Social Affairs (MOLISA), more than 60% of FDI enterprises face difficulties in labor compliance during their first two years of operation.
Common causes include: lack of personnel knowledgeable about Vietnamese law, differences in management culture, and multi-layered legal requirements (labor – wages – social insurance – occupational safety and health).

To help foreign enterprises, especially Japanese companies, operate stably and minimize risks, this article summarizes comprehensive labor compliance solutions based on guidance from official authorities.

1. Establish a complete labor documentation system – the foundation of all inspections

Under Decree 145/2020/ND-CP and the Labor Code 2019, enterprises are required to prepare:
– Complete personnel files in accordance with MOLISA templates
– Job descriptions for each position
– Employee handbook (Vietnamese version is mandatory)
– Recruitment – evaluation – leave policies

Complete documentation helps FDI enterprises reduce up to 70% of inspection-related penalty risks.

2. Build – disclose – retain salary scales and salary tables

This is a mandatory obligation for all enterprises.
Legally compliant steps include:
– Structuring salaries: basic salary – allowances – additional payments
– Linking salary levels to grades and job titles
– Internal disclosure
– Retaining records at the enterprise for inspection purposes

Japanese enterprises often face difficulties due to seniority-based salary models that differ from Vietnamese requirements.

3. Issue and register Internal Labor Regulations

According to MOLISA regulations:
– Enterprises with 10 or more employees must register Internal Labor Regulations
– Contents must comply with the Labor Code 2019
– Regulations must be submitted to the Department of Home Affairs where the head office is located

Internal Labor Regulations serve as a “legal shield” enabling enterprises to impose discipline lawfully and prevent disputes.

4. Sign employment contracts in compliance with Vietnamese law

FDI enterprises commonly make the following mistakes:
– Contracts without a Vietnamese version
– Using templates from the parent company
– Failing to update contracts when positions change
– Overly generic job descriptions

Under Article 14 of the Labor Code:
– Contracts must include a Vietnamese version
– Bilingual contracts are allowed, but the Vietnamese version is the legal reference
– Contracts must clearly specify rights, obligations, benefits, working hours, and overtime

5. Register and contribute Social Insurance (SI), Health Insurance (HI), and Unemployment Insurance (UI) in accordance with regulations

According to Vietnam Social Security, FDI enterprises are most often inspected due to:
– Late or outstanding contributions
– Incorrect declaration of salary bases for contributions
– Failure to enroll employees with contracts of one month or longer

Comprehensive solutions help enterprises:
– Accurately calculate contributable salaries
– Timely report increases and decreases in labor
– Minimize risks of penalties for late payments

6. Establish an Occupational Safety and Health (OSH) system

According to the Department of Work Safety:
– Enterprises must conduct risk assessments
– Organize OSH training for groups 1–6
– Maintain workplace accident records
– Submit periodic OSH reports

OSH violations are a common reason why manufacturing enterprises (including Japanese investors) are penalized.

7. Register foreign employees in accordance with Decree 152/2020/ND-CP

FDI enterprises are required to:
– Explain and register the demand for foreign workers
– Apply for work permits or work permit exemption certificates
– Submit periodic reports

Many Japanese enterprises assign managers to Vietnam but lack complete documentation → increasing the risk of penalties.

8. Establish a periodic reporting system for regulatory authorities

Mandatory reports include:
– Semi-annual labor utilization reports
– Annual labor reports
– OSH reports
– Workplace accident reports
– Foreign employee reports

Comprehensive services help enterprises avoid missed deadlines and administrative penalties.

9. Control working hours and overtime (OT) in compliance with the law

According to MOLISA, overtime violations account for more than 40% of FDI enterprises’ compliance issues.

Comprehensive services support enterprises in:
– Establishing timekeeping systems
– Monitoring working hours and overtime
– Calculating overtime pay correctly
– Ensuring overtime does not exceed legal limits

This is particularly important for Japanese enterprises with a high-overtime work culture.

10. Consulting and periodic reviews to maintain long-term compliance

FDI enterprises should:
– Conduct compliance reviews every 6–12 months
– Update changes in labor regulations
– Perform internal checks based on labor inspection checklists

Comprehensive compliance services ensure enterprises remain fully compliant without maintaining large in-house teams.

Why should FDI enterprises use comprehensive outsourced back-office solutions?

✔ Reduce inspection and penalty risks by 70–90%
✔ Save HR – Legal personnel costs
✔ Optimize processes aligned with Japanese and Vietnamese standards
✔ Enable immediate operation from day one without time-consuming system setup
✔ Easily scale as the enterprise grows

This solution is ideal for enterprises newly entering Vietnam or those unfamiliar with local regulations.