Question 1. Is the director of the company subject to compulsory insurance according to Vietnamese law? Under what circumstances will the director of the company not have to pay compulsory insurance according to the regulations of Vietnamese law?
Managerial positions of the enterprise are not mentioned in labour law, so, in order to consider the regulations on the position of the company's director, it is necessaryto rely on the regulations of the law on enterprises. Specifically, according to Article 4.24 of the Law on Enterprise 2020, the director is one of the subjects in the group of company executives. In which, the director title can still be both an employer and an employee.Therefore, if there is an employment contract that the company pays the salary, the business executive still has to pay the compulsory insurance according to the law, specifically:
For Social insurance: Pursuant to the provisions of the Law on Social Insurance 2014 and Article30.4 of Circular No. 59/2015/TT-BLDTBXH, participation in social insurance is compulsory for business executives who receive salaries from enterprises, except for full-time management officers in one-member limited liability companies owned by the State.
For Health insurance: Pursuant to Article 12.1(a) of the Law on Health Insurance, applicable to employees working under indefinite-term or at least full three-month employment contracts; business managers receiving salaries; officials and civil servants.
For Unemployment insurance: Pursuant to the provisions of Article 43.1(b) of the Law on Employment, the insurance applies to those who have entered into an employment contract or a working contract.Thus, according to the provisions of the labour law mentioned above, the director of the company in particular and the executives of the enterprises, in general, are subject to the compulsory insurance payments under the provisions of Vietnamese law if they have signed employment contracts that pay salaries1.
Only in cases where the directors of the company or the executives of the enterprise are not bound by the employment contracts with the enterprise, there will be no obligation to pay compulsory insurance accordingto the provisions of Vietnamese law.
According to Phuoc & Partners
