Here’s what Vietnam’s visa crackdown tells us about the country

One of the world's poorest countries three decades ago – Vietnam has made a quick push to middle-income status. While the expertise of outsiders was necessary to this growing prosperity, a new clampdown on foreign workers showcases the country's evolution

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July 2, 2021
Here’s what Vietnam’s visa crackdown tells us about the country
The D1 area of Ho Chi Minh City. Photo: Govi Snell

It was a stressful month for Australian-national Hannah and her partner. After moving from the central Vietnamese city of Danang with their pet dog in tow and signing a lease in Ho Chi Minh City, the dream of a life together in the metropolis came to an abrupt end. 

Her partner’s Vietnamese visa was coming close to its expiration and if he did not leave voluntarily, he was likely to be deported. His visa was sponsored by a company set up solely for that purpose, a well-established practice which the Vietnamese government is now cracking down upon.

Hannah’s partner had moved to Danang to work as an assistant manager at a luxury hotel, although they did not provide him with a work permit. When his contract ended in December of last year, a visa agent got him a business visa from a shell company. Not being well-versed in Vietnam’s legal system, the couple did not realise it was illegal until a recent decree tightening visa enforcement for foreign workers was introduced and the government began to clamp down. 

Although being offered differing exorbitant fees by visa agents to get him the fake documents needed for a new visa, the fear of being forbidden any future reentry if caught led him to leaving Vietnam earlier this June. It’s a trap that seemingly thousands of foreign workers, among them long-term expats, have fallen into in recent months in the country. 

“We were completely devastated when we realised he could not stay,” Hannah said. “It was somewhat comforting yet sad to know that so many people were in his situation.”

Approved on February 15, Decree 152 from the Ministry of Labour has toughened up the qualifications for foreigners seeking work in the country. As the Minister of Labour calls on local authorities to deport illegal foreign workers, visa discrepancies are no longer being swept under the rug as was long the case in the fast-developing country.

“Vietnam’s government has tightened the rules and enforcement of expats working in Vietnam, forcing foreign workers to leave Vietnam as a part of not having work permits or their incapability to provide sufficient application documents,” said Marco Foerster, manager of the international business advisory unit of Dezan Shira & Associates in Ho Chi Minh City.

The passage of Decree 152 indicates the country’s stance on foreigners is shifting. With Vietnam’s rising status in the world, foreigners, once an essential source of labour in the country as it opened up to the world, have come to be viewed increasingly as a burden, with many working without proper documentation in low-skilled professions. 

Dang Ngoc Tram, a research fellow at the Ministry of Investment and Planning in Hanoi who studied immigration policy in Vietnam, says that in recent years the government has felt that foreign workers have delivered diminishing returns to Vietnamese society as its continued to develop.

“The greatest expectation for what foreign workers would bring into the country, I think, is the technology transfer or spillover effects to local workers,” she said. 

“However, after 30 years of economic reform and opening, it’s worth noting that Vietnamese domestic firms, especially in manufacturing sectors, were not impacted in the way that they could upgrade their technological level through linkages with foreign sectors.” 

Photo: Govi Snell

Before the mid-1980s, Vietnam was closed off to the world. In self-isolationist mode, the county’s economy operated in the old communist manner of central planning similar to that of China and the former Soviet Union wherein economic decisions were made directly by the state. 

Impoverished after decades of conflict, Vietnam was dealt another blow when the Soviet Union began to shrink from its historic role as a national benefactor. In the 1980s, there was a dramatic reduction in Soviet economic assistance forcing the country to move in a new direction. 1986 was a step towards prosperity for the nation when a series of economic reforms, referred to as Doi Moi, opened up the country to the global marketplace. 

As the country shifted from agriculture to manufacturing, the economy needed skilled labour to spur industrialisation. Lacking a seasoned workforce in technical fields, the government turned to the aptitude of outsiders and introduced its first law for the management of foreign workers in 1987.

“After Doi Moi we realised that we needed to open to the flow of capital, technology, and trade with the world – but suddenly we realised that we had a critical shortage of skilled labour,” Tram said. “We can say that foreign workers contributed to the process of improving the productivity and competitiveness of Vietnamese workers.”

Since the country opened up 35 years ago, it has gone from one of the poorest countries in the world to a middle-income country. In Ho Chi Minh City, the economic hub, that shift out of poverty is palpable as street vendors sell merchandise below skyscrapers alongside luxury brand outlets planted in the city centre.  

“Vietnam was very undeveloped 30 years ago,” said Adam McCarty of Mekong Economics. An economist, he first came to the Southeast Asian nation in 1990. “Now it is a serious middle-income exporting open economy – socially and economically one of the most rapidly transforming countries in the world.”

With the opening up of its labour market, the country has seen a steady inflow of foreigners. In 2004, there were 12,600 foreign workers in the country, and by July of 2019 this figure had increased to 91,200. But, the passage of Decree 152 suggests that the government no longer sees foreigners as playing as necessary of a role in its continued development. 

As Tram pointed out, the gaps in Vietnam’s workforce lay in technical work – with just 12% of Vietnam’s labour force of 57.5 million considered highly skilled – but among non-native workers, there were just 25% of foreigners plugging those gaps, working in the technology, education, and management industries

“We have a rising trend of foreign workers in Vietnam. But at the same time, in recent years the problem is that we are willing to welcome more foreign workers into Vietnam to improve our technology level, but statistics show that the percentage of technological experts is on the decline,” said Tram.

Further, many are believed to be working in Vietnam unlawfully, although the number of non-native labourers working in the country without proper documentation is unknown.

“A lot of foreigners come into Vietnam in the form of our tourist visa, but stay longer illegally and take work illegally,” Tram said. 

The biggest change to come from Decree 152 is in the qualifications needed in order to get a work permit as an “expert”, one of the broadest categories of Vietnam’s work visas. 

According to the new regulation, one now needs five years of experience related to their job position in Vietnam along with a practice certificate, or alternatively three years of experience and a university degree related to their employment. In the past, having a degree directly related to your position in Vietnam was not a necessity and a certificate from overseas was acceptable to prove expertise

Besides this, those who are currently in the country on a work permit are no longer allowed to extend their current visa, but must start the process over from scratch.

“All people who have the work permit from before February 15, 2021 need to apply for a new work permit without the extension,” a visa agent at a company called Vietnam-visa, who goes by Jessica, told the Globe. “They [the government] want to restrict people from entering Vietnam.”

Recent months have seen social media sites like Facebook flooded by desperate expats trying to figure out how to get the necessary documentation to continue their lives in Vietnam. Some have pleaded with their country’s embassies to find a solution, while others turn to local news to air their grievances.

“People are crying, people are expressing desperation in one way or another that they are having to leave the country, unvaccinated, unexpectedly, having to terminate their lettings and say farewell to friends,” said an 80-year-old Irish citizen who has been living in Vietnam for six months out of the year for the last decade. 

The retiree, who does want his name used as he is currently on a business visa tied to a “paper company”, as he referred to it, told the Globe he suspects he will have to leave the country this August. 

“I think the travel agents tend to steer people towards these visas,” he said of his shoddy business visa that he acquired nearly two years ago. “But, I accept responsibility for where I am.”

Now with our living standards increasing more and more Vietnamese students can go abroad to take a degree and then come back into the country with skills that are not less than foreign workers

This visa tightening is a trend that accompanies economic development in Southeast Asia, with Thailand going through a similar clampdown on foreigners in 2014

According to Tram, as Vietnam’s has rapidly developed since economic reforms began in the 1980s, the expertise that outsiders can provide to the Vietnamese workforce is fading. 

Since Doi Moi, the country’s economic growth has continued on an upward trend and has sustained an average annual economic growth-rate of over 6%, one of the highest rates among developing countries. With this rapidly growing economy, the Vietnamese government has invested in higher education and on top of that Vietnamese have been able to afford to study abroad. 

Now, Vietnamese-nationals increasingly have many of the same skills as those which were once sought from outside the country. 

“Now with our living standards increasing more and more Vietnamese students can go abroad to take a degree and then come back into the country with skills that are not less than foreign workers,” Tram said.  

The skyscrapers of modern-day Ho Chi Minh. Photo: Govi Snell

While for some, like Tram, the passage of Decree 152 is a necessary evolution in Vietnam’s labour policy, the new regulation is not free of critique. 

Those impacted see the rollout of the decree as erratic, leaving many in the lurch during Vietnam’s worst wave of the coronavirus pandemic and with visa agents offering differing information and fees to get visas. 

Not only is there massive confusion about the visa changes that affect those with business visas, work permits, and tourist visas, but what information that is available varies from region to region, and visa agent to visa agent,” Victoria Jordan, a 69-year-old US citizen, wrote in a letter to the US Embassy that she shared with the Globe

“Some U.S. citizens have been told that they have been blacklisted, have paid large sums to visa agents to have their names removed, and have then learned through an immigration office that they were not, in fact, on a blacklist.” 

Jordan’s daughter is married to a Vietnamese citizen and is trying to get her mother a temporary residency card as a family member. But, because the US embassy in Ho Chi Minh City closed with the rapid increase of Covid-19 cases in the city, her daughter has been unable to get her documents certified.

“It isn’t possible to move forward,” Jordan said. “The US Embassy is closed and my daughter needs to get her birth certificate notarised there and only there in order to apply for a TRC for me.”

McCarty is also adamant that limiting the number of foreigners in Vietnam will be harmful for the continued development of the country. For the Hanoi-based economist, technology transfer – the movement of data, software, inventions, and technical know-how – is reliant on people. 

“For technology transfer you have to let people interact,” he said. “That foreigners that come here should be highly educated persons, I don’t agree with that … Having a lot of foreigners living and working in your country is a really good thing for development and becoming a more sophisticated economy.”

McCarty looked to Singapore, the wealthiest country in Asia, where it is possible to apply for permanent residency after working in the country for six months, and as of 2019 there were 2.16 million immigrants in the population of 5.7 million. As he explained, a large part of the island-nation’s success is down to bringing lots of foreigners into the country. 

“If you walk down Orchard Road in Singapore, half the people you walk past are not Singaporeans. They’re foreigners and they are not tourists, they are foreigners living and working in and doing professional jobs in Singapore,” he said. “Having a lot of foreigners living and working in your country is a really good thing for development and becoming a more sophisticated economy.”

“Vietnam needs to move more and more in that way too.”

Regardless of McCarty’s outlook on the necessity of foreigners for Vietnam to graduate from middle-income status, immigration policy in Vietnam is taking a different direction. 

“The problem is that the impact from foreign workers did not meet what was expected … We expected more but actually, foreign workers cannot bring it into Vietnam’s economy,” Tram said.

“We need to protect the domestic labour market.” 

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