Dong or Dollars? The Law and Labour Contracts

Dear Hadrien,

I have been offered a contract to work as a project manager in Ho Chi Minh City and I will earn a little over USD2,000 per month. However, I heard that in Vietnam all amounts in contracts should be stated in Vietnamese dong. Is that correct? And is my future employer allowed to pay my salary in cash?

To start with your first question, you are right that the Vietnamese government has recently made an effort to restrict the use of foreign currency within Vietnam. On December 26, 2013, the State Bank of Vietnam issued further guidance on this matter in Circular No. 32/2013/TT- NHNN (or simply Circular 32).

Circular 32, which applies to both resident and non-resident organizations and individuals, makes it clear that within the territory of Vietnam all transactions, payments, listings, advertisements, quotations, price fixings, and price recordings in contracts and agreements may not be conducted in a foreign currency. The circular provides, however, for several exceptions to this general rule. Residents, for example, are permitted to contribute capital in a foreign currency in order to implement a foreign investment project in Vietnam, whereas non-residents are permitted to record prices in contracts and to pay for the export of goods and services to residents in a foreign currency.

Another exception that is especially relevant to your situation is that employing organizations (whether they are resident or non-resident), and foreign employees (whether they are residents or non-resident) are permitted to reach an agreement in labor contracts on the payment of salaries, bonuses and allowances in a foreign currency. Therefore, your salary may be stated and paid in US dollars.

Circular 32 is also applicable to your second question, as it explicitly allows employees and employers to agree on paying and receiving salary, as well as bonuses and/or allowances, in cash. The foregoing complies with the Labor Code of Vietnam, which states that wages may be paid either in cash or through the personal bank account of an employee.

The newly issued Decree No. 222/2013/ ND-CP on payments made by cash, which is effective from March 1, 2014, does not change anything for your specific situation. It does, however, further regulate and restrict payments in cash for a number of other transactions within the territory of Vietnam, such as securities transactions and transactions for the contribution of capital to an enterprise.

To conclude on a practical note, opening a bank account in Vietnam is usually not very complicated and there is a wide range of banks to choose from, both Vietnamese and foreign. It may be worth inquiring in advance about the documents that your preferred bank requires for opening an account with them. We wish you all the best with your new job!

If you have any legal questions you want answered, send them to legal@oivietnam.com.

A member of the Paris Bar, Hadrien Wolff has been practicing law in Vietnam for more than seven years, currently as a partner of Audier & Partners based at its HCMC office. Having gained extensive legal experience in the Netherlands and Cambodia, Marijn Sprokkereef is an associate at the Hanoi office of the same firm. Audier & Partners is an international law firm with presence in Vietnam, Myanmar and Mongolia, providing advice to foreign investors on a broad range of legal issues.

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