Foreign investors and Taiwanese manufacturers operating factories in Vietnam in 2026 must master 12 core provisions of the Vietnam Labour Code (Law No. 45/2019/QH14) and the latest government decrees. These regulations cover working hours, overtime, probation periods, employment contracts, termination, leave entitlements, social insurance, trade unions, strikes, internal labor regulations, minimum wage, and foreign work permits. Under Decree No. 293/2025/ND-CP, published on the Vietnamese government's policy portal (xaydungchinhsach.chinhphu.vn), the Region I monthly minimum wage increased to 5,310,000 VND effective January 1, 2026, representing an average increase of 7.2% across all regions.
Key takeaways
- Effective January 1, 2026, monthly minimum wages across Regions I to IV increased to between 3,700,000 and 5,310,000 VND (Decree No. 293/2025/ND-CP).
- Article 107 of the Vietnam labor law, in effect since January 1, 2021, caps monthly overtime at 40 hours, with an annual limit of 200 hours for general sectors and 300 hours for specific manufacturing industries.
- Article 127 strictly prohibits employers from using fines or wage deductions as disciplinary measures, while enterprises employing 10 or more workers must register their internal labor regulations with provincial labor authorities (Article 118).
- Work permits for foreign executives are governed by Decree No. 219/2025/ND-CP (effective August 7, 2025), carrying a maximum validity of 2 years with a single renewal option and a 10-working-day processing time.
- In Q2 2026, asking monthly rents for Ready-Built Factories (RBF) in southern and northern Vietnam ranged from USD 4.9 to 5.3 per square meter (Cushman & Wakefield, JLL, CBRE).
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Suppose you are preparing to lease a ready-built factory in Dong Nai or Bac Ninh and draft an expatriate contract for Taiwanese managers that includes a clause imposing "fines and salary deductions for violating dormitory curfews." In Vietnam, such a clause violates Article 127 of the Vietnam labor law. In the event of a labor dispute, the factory will face administrative penalties and must refund all deducted wages in full. Below is a breakdown of the 12 essential regulatory areas for factory setup and plant management (this article provides a summary of regulatory and market information and does not constitute formal legal advice).
How Much Did Vietnam's Minimum Wage Increase in 2026? What Are the Regional Rates and Social Insurance Caps?
The Vietnamese government reviews regional wage benchmarks annually based on economic conditions (Article 91 of the Vietnam Labour Code). This benchmark not only determines base salaries for entry-level production line workers but also directly governs the factory's maximum contribution cap for unemployment insurance. According to data published on the government policy portal (xaydungchinhsach.chinhphu.vn), Decree No. 293/2025/ND-CP—effective January 1, 2026—raised minimum wages across Vietnam's four regions by an average of 7.2% (note: vietanlaw.com previously cited an earlier draft listing the Region III hourly wage at 19,900 VND; the officially enacted version prevails).
Furthermore, according to 2026 regulations published on the Ha Tinh provincial government portal (hatinh.gov.vn), effective January 1, 2026, the unemployment benefit payout rate is 60%, and the maximum monthly salary base for unemployment insurance contributions in 2026 is capped at "20 times the regional minimum wage" (for historical context, the same source indicates that the maternity allowance payout rate for female workers in 2024 was 100%). Specific figures for Key Points 11 and 7 are detailed below:
| Key Area / Applicable Region | Monthly Wage Standard (From Jan 1, 2026) | Hourly Wage Standard (From Jan 1, 2026) | Legal Basis & Linked Management Compliance |
|---|---|---|---|
| Point 11: Region I Core industrial zones in Ho Chi Minh, Ha Noi, Hai Phong | 5,310,000 VND/month | 25,500 VND/hour | Decree No. 293/2025/ND-CP; the monthly salary cap for unemployment insurance contributions is 20 times the regional minimum wage. |
| Point 11: Region II Select industrial zones in Bac Ninh, etc. | 4,730,000 VND/month | 22,700 VND/hour | Decree No. 293/2025/ND-CP; full-attendance base pay for untrained workers must not fall below this threshold. |
| Point 11: Region III | 4,140,000 VND/month | 20,000 VND/hour | Decree No. 293/2025/ND-CP (an earlier draft proposed 19,900 VND/hour). |
| Point 11: Region IV | 3,700,000 VND/month | 17,800 VND/hour | Decree No. 293/2025/ND-CP; applies primarily to remote agricultural districts. |
| Point 7: Social, Health & Unemployment Insurance | Calculated based on the salary base stated in the labor contract | Not applicable | Article 168 of the Vietnam Labour Code; employers and employees must make mandatory monthly contributions to social, health, and unemployment insurance (foreign employees holding work permits are also subject to mandatory social and health insurance, but are exempt from unemployment insurance). |
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How Is Overtime Vietnam Calculated? What Are the Legal Red Lines for Working Hours, Leave, and Termination?
Production line shift scheduling and payroll settlement are the most frequently audited areas during labor inspections. According to historical baseline data from the Vietnam labor law (effective January 1, 2021) compiled by the 104 Job Bank Blog (blog.104.com.tw), the statutory minimum working age in Vietnam is 15 (Article 143), night work hours are defined as 22:00 to 06:00 the following morning (Article 106), shift workers must receive at least 12 hours of rest between two consecutive shifts and at least 24 consecutive hours of weekly rest (Articles 109 and 111), and monthly overtime is capped at 40 hours (Article 107).
When calculating overtime Vietnam rates and executing employment contracts, plant managers and HR teams must strictly comply with Key Points 1 through 6 of the Vietnam Labour Code:
| Plant Management Focus | Vietnam Labour Code Articles | Core Statutory Standards & Operational Practice |
|---|---|---|
| Point 1: Normal Working Hours & Overtime Caps | Articles 105, 107 | Normal working hours must not exceed 8 hours per day or 48 hours per week. Overtime requires employee consent: capped at 50% of normal daily working hours and 40 hours per month. The annual limit is 200 hours, extendable to 300 hours per year for specific industries—such as textiles, garments, footwear, and electronics processing—upon notification to the provincial Department of Labor. |
| Point 2: Overtime Pay & Night Shift Multipliers | Article 98 | Weekday overtime must be paid at a minimum of 150% of the actual hourly wage; weekly rest days at a minimum of 200%; public holidays and paid annual leave days at a minimum of 300% (excluding the regular daily base pay for that day). Work performed during night hours (22:00-06:00) requires an additional allowance of at least 30%; night overtime requires an extra 20% calculated on the daytime normal wage or daytime overtime rate, in addition to the multipliers above. |
| Point 3: Probation Period Duration & Salary | Articles 24 to 27 | Only 1 probation period is permitted per position, with probationary pay set at a minimum of 85% of the official wage. Maximum duration is 180 days for senior enterprise executives, 60 days for technical roles requiring a college degree or higher, 30 days for intermediate technicians and staff, and just 6 working days for unskilled production line workers. |
| Point 4: Employment Contract Categories | Article 20 | Divided strictly into two categories: (1) Indefinite-term contracts; and (2) Fixed-term contracts (up to 36 months). Upon expiration, a fixed-term contract may only be renewed once; if the employee continues working, the 3rd contract must convert to an indefinite-term contract (excluding contracts tied to foreign worker permits). |
| Point 5: Unilateral Contract Termination (Dismissal) | Articles 36, 125 | Employers may unilaterally terminate a contract only on statutory grounds—such as repeated failure to meet registered performance criteria or 5 consecutive working days of unexcused absence—and must provide written notice 30 days (fixed-term) or 45 days (indefinite-term) in advance. Unlawful dismissal requires paying double salary compensation plus reinstatement (Article 41). |
| Point 6: Lunar New Year (Tet) & Paid Annual Leave | Articles 112, 113 | Public holidays total 11 paid days per year (including 5 consecutive days for the Tet Lunar New Year, 2 days for National Day, etc.). General employees completing 12 months of service are entitled to 12 days of paid annual leave (14 to 16 days for heavy or hazardous occupations), increasing by 1 additional day for every 5 years of service (Article 114). |
How Can Factories Prevent Strikes and Fine Disputes? What Are the Rules on Trade Unions, Internal Regulations, and Expat Work Permits?
Many Taiwanese investors ask: "Is it legal to require employees to live in the factory from Monday to Saturday, require approval to leave the premises, and include contract clauses that deduct wages as fines for rule violations?" The answer is no—it is illegal. Employers cannot restrict employees' personal freedom outside of working hours, and Article 127 of the Vietnam labor law explicitly prohibits imposing "monetary fines (phat tien)" or "wage cuts (cat luong)" as labor disciplinary measures. Furthermore, if a factory fails to codify its management rules into legally registered Internal Labor Regulations, any demerit or dismissal sanction will be ruled invalid in court.
At the same time, regarding questions about whether Taiwanese nationals can legally work in Vietnam and how to handle work permits and Temporary Residence Cards (TRC) when changing jobs, Vietnam enacted Decree No. 219/2025/ND-CP on August 7, 2025, significantly streamlining the work permit process for Taiwanese managers and foreign executives.
Additionally, according to a September 25, 2026 report by Vietnam's World & Vietnam Report (baoquocte.vn), Decree No. 371/2026/ND-CP—which governs the recruitment and management of Vietnamese employees working for foreign organizations and missions in Vietnam—takes effect on November 15, 2026; standard foreign-invested manufacturing plants remain governed by the Vietnam Labour Code and Decree No. 219. Below are Key Points 8 through 10 and Point 12:
| Compliance & Expatriate Focus | Legal Basis | Plant Operations & Risk Control Priorities |
|---|---|---|
| Point 8: Grassroots Trade Unions | Articles 170 to 178 of the Vietnam Labour Code | Employees have the right to establish or join a grassroots trade union affiliated with a higher-level union, or an internal enterprise employee representative organization. Employers must not interfere with or discriminate against union officers, and are legally required to consult the executive committee of the grassroots trade union in writing when establishing pay scales, internal labor regulations, or dismissing employees. |
| Point 9: Lawful Strikes vs. Wildcat Strikes | Articles 198 to 208 of the Vietnam Labour Code | A lawful strike may only be called over "collective interest disputes" after mediation has failed, requiring a majority vote by the internal employee representative organization and 5 working days' prior written notice. In practice, pre-Tet work stoppages encountered by foreign factories are mostly unprocedural "spontaneous strikes (wildcat strikes)." The key to prevention is maintaining pay grade differentials for senior workers whenever minimum wages are adjusted. |
| Point 10: Internal Labor Regulations (Factory Rules) | Articles 118 to 127 of the Vietnam Labour Code | Enterprises employing 10 or more workers must issue written Internal Labor Regulations (Noi quy lao dong) specifying working hours, occupational health and safety, property protection, and grounds for disciplinary action. These must be registered with the provincial Department of Labor (or Industrial Zone Management Authority) within 10 days of issuance to carry legal effect. Fines and wage deductions are strictly prohibited (Article 127). |
| Point 12: Foreign Executive & Taiwanese Expat Work Permits | Articles 151 to 157 of the Vietnam Labour Code; Decree No. 219/2025/ND-CP (effective Aug 7, 2025) | Work permits are valid for up to 2 years and may only be extended once upon expiration (for up to 2 additional years). The new regulation integrates the "foreign labor demand approval" directly into the work permit application for simultaneous review, enables online submission, and sets a statutory processing time of 10 working days. Note: Work permits and business Temporary Residence Cards (TRC) are bound to a single employer and province and are non-transferable across companies; upon resignation, the original employer must revoke and cancel them. Expatriates married to Vietnamese citizens may apply for a work permit exemption and a dependent TRC. |
Factory Setup and Expatriate Housing: How to Plan Industrial Park Rents and Residential Property Rights in North and South Vietnam?
Labor costs and factory rents are two sides of the same coin in site selection. In 2026, Vietnam's residential and industrial real estate markets are undergoing a phase of rational consolidation and price adjustment, allowing business owners to benchmark costs across provinces based on minimum wage zones and land occupancy rates. According to Q1 and Q2 2026 market reports published by Cushman & Wakefield (C&W), JLL, and CBRE, asking rates for industrial land (lump-sum payment for the remaining lease term) and Ready-Built Factories (RBF, monthly asking rent) in major northern and southern industrial zones are as follows:
| Region / Post-Merger Provincial Scope | Industrial Land Asking Rent (USD/sqm/remaining lease term) | Ready-Built Factory (RBF) Monthly Asking Rent (USD/sqm/month) | Ready-Built Warehouse (RBW) Monthly Asking Rent (USD/sqm/month) | Industrial Park Occupancy Rate & 2026 Market Notes |
|---|---|---|---|---|
| Southern Vietnam Key Industrial Parks (Average) | 183 – 186.4 USD (Typical: 186, Q2 2026) | 4.9 – 5.2 USD (Typical: 5.0, Q2 2026) | 4.6 – 5.07 USD (Q2 2026) | Compiled from C&W (Q2 2026), JLL (H1 2026), and CBRE (Q1 2026) data. Only JLL specifies land rates as net; others do not state whether management fees and VAT are included. |
| Ho Chi Minh (Includes former Binh Duong post-administrative merger) | 187.5 USD (Q2 2026) (184.2 USD in Q1 2026) | 5.1 USD (Q2 2026) | 4.5 USD (Q2 2026) | C&W Q2 2026 data. Additionally, according to the official HEPZA portal (accessed September 30, 2026), the lease term for My Phuoc 3 Industrial Park in former Binh Duong runs until August 31, 2056. |
| Dong Nai (Includes former Binh Phuoc post-merger) | 189.6 USD (Q2 2026) | 4.9 USD (Q2 2026) | 4.7 USD (Q2 2026) | C&W Q2 2026 occupancy rate stands at 73.1%. Per DNIEZA statistics as of year-end 2025, occupancy across all 43 operating industrial parks is 74.78% (89% across 31 parks in former Dong Nai; 49% across 12 parks in former Binh Phuoc). |
| Tay Ninh (Includes former Long An post-merger) | 179.6 USD (Q2 2026) | 4.6 USD (Q2 2026) | 4.8 USD (Q2 2026) | C&W Q2 2026 land occupancy is 60.9%, making it the satellite market with the most abundant vacant land supply in Southern Vietnam; land rates declined 4.8% QoQ. |
| Northern Vietnam Key Industrial Parks (Average) | 137.7 – 143 USD (Typical: 142, Q2 2026) | 5.0 – 5.3 USD (Typical: 5.1, Q2 2026) | 4.5 – 4.9 USD (Typical: 4.9, Q2 2026) | Compiled from C&W (Q2 2026) as well as CBRE and JLL (H1 2026) data. |
| Bac Ninh & Hai Phong | Hai Phong benchmark parks: 120 – 160 USD (Savills portal, June 4, 2026) | Subject to Northern Vietnam range | Subject to Northern Vietnam range | C&W Q2 2026 figures indicate occupancy exceeds 70% in Bac Ninh (including former Bac Giang) and exceeds 60% in Hai Phong (including former Hai Duong). |
When accommodating expatriate executives, a growing number of Taiwanese enterprises are replacing traditional gated factory dormitories with housing allowances, helping expatriate managers with families rent or purchase property near international schools in Ho Chi Minh or Ha Noi. Business owners or individual Taiwanese executives evaluating residential condominium purchases in Vietnam must verify the complete ownership pathway under the Law on Housing 2023 (Law No. 27/2023/QH15, official text: Vietnam Government Portal) and Decree No. 95/2024/ND-CP (implementing regulations):
- Foreign buyers may only purchase primary units directly from the developer (or completed units still held in the developer's inventory), or acquire a secondary unit from another foreign owner; Article 17.2 does not permit foreign nationals to purchase residential property from Vietnamese individuals (the sole exception under Article 20.2.c applies to foreign spouses married to Vietnamese citizens residing in Vietnam, who enjoy the same residential ownership rights as Vietnamese citizens).
- Purchases from a developer require signing a formal Sales and Purchase Agreement (SPA), whereas acquisitions from another foreign owner require executing a transfer agreement and assuming the remaining ownership term.
- Foreign buyers are subject to the foreign ownership quota of 30% per condominium building (and 250 landed houses per ward-level administrative unit) under Article 19, holding an ownership term of up to 50 years from the issuance date of the Pink Book (ownership certificate), which is renewable; if resold to a Vietnamese buyer, the title converts to long-term (freehold) ownership (Article 20), and the property may be freely leased or resold during the ownership term.
Title and Deposit Risk Advisory: When expatriate executives lease or purchase factories or residential properties in Vietnam, the most common financial loss stems from inadvertently signing a secondary residential contract where the foreign quota is exhausted or the seller is a Vietnamese individual, preventing title transfer and resulting in the total loss of the down payment and deposit.
The only documentation that prevents this loss is requesting verification of the project's "remaining foreign quota certificate" and the "registered owner status on the original Pink Book (ownership certificate)" held by the seller prior to paying any deposit; for industrial factories, investors must first verify the industrial park's Investment Registration Certificate (IRC) issuance criteria and land rent payment structure (one-off payment or annual payment). Before you remit any funds, our Mandarin-speaking advisory team can assist in verifying the seller's legal status, the building's remaining foreign quota, and the Pink Book documentation item by item.
Vietnam Labor Law and Factory Setup FAQ for Taiwanese Investors
Q1: Can a Taiwanese executive change companies before receiving their work permit, or continue using an unexpired Temporary Residence Card (TRC) from a previous employer after resigning?
No. A Vietnamese work permit and business Temporary Residence Card (TRC) are strictly tied to the sponsoring employer and the province of issuance, and cannot be transferred directly to a new company. Upon termination of the employment contract, the former employer is legally required to surrender and cancel both the work permit and TRC with the Department of Labor and the Immigration Department; the foreign national must exit the country or convert their visa, after which the new employer must submit a fresh work permit application under Decree No. 219/2025/ND-CP. Furthermore, International Driving Permits issued in Taiwan are not recognized in Vietnam; expatriates must hold a valid TRC and their original Taiwan driver's license to apply locally for conversion to a Vietnamese driver's license.
Q2: How are Personal Income Tax (PIT) and social insurance calculated for Taiwanese executives seconded to Vietnam?
Individuals residing in Vietnam for 183 days or more within a calendar year or across 12 consecutive months are classified as tax residents and are subject to Vietnamese Personal Income Tax at progressive rates on their worldwide income (Taiwan and Vietnam have signed a Double Taxation Avoidance Agreement, allowing for tax credit claims in accordance with regulations). Concurrently, for Taiwanese executives holding a Vietnamese work permit and an employment contract of 12 months or longer, both the employer and employee are legally required to make monthly contributions to Vietnam's mandatory social insurance and health insurance schemes.
Q3: What 3 written confirmations must be obtained before leasing a Ready-Built Factory (RBF) or purchasing residential property for expatriate executives?
Before paying any factory security deposit or residential booking deposit, be sure to request written confirmation from the industrial park or seller on the following 3 questions:
- Industrial Park Environmental and Power Quotas: What is the permitted wastewater treatment grade and three-phase power capacity (kVA) of the Ready-Built Factory, and does it comply with the industry classification required to apply for a foreign-invested Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC)?
- Industrial Land Lease Term and Payment Structure: Up to which year does the remaining land lease term of the industrial park where the factory is located run, and is the park's land rent structured as a "One-off payment" or "Annual payment"?
- Expatriate Residential Quota and Seller Eligibility: When purchasing executive housing, how many units remain available under the building's 30% foreign ownership quota (Article 19 of the Law on Housing 2023)? Is the seller the developer, a foreign homeowner, or a Vietnamese homeowner from whom foreign nationals are legally prohibited from acquiring title?
If you are evaluating Ready-Built Factory leases in Northern or Southern Vietnam, or planning residential acquisitions near international schools for seconded Taiwanese executives, please contact our Chinese and Taiwanese Client Desk via Zalo or WeChat on this page to request the latest North-South Vietnam industrial park rent schedules, building foreign quota verification sheets, and lease/purchase due diligence checklists.
Legal Basis
- Law on Housing 2023 (Law No. 27/2023/QH15)
- Law on Land 2024 (Law No. 31/2024/QH15)
- Decree No. 95/2024/ND-CP
- Indochine Real Estate JSC — vietnampropertymarket.com
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