An enterprise manager refers to the manager of a private enterprise and the manager of a company, comprising the key, essential titles within an organization established for business purposes. At present, a considerable number of individuals holding such titles do not receive any form of remuneration from the company, either because the company’s charter does not provide for remuneration in respect of that title, or because the individual voluntarily declines to receive a salary. As of July 1, 2025, an enterprise manager not receiving salary is required to participate in compulsory social insurance, with a view to expanding social security coverage to a category of persons who, under the former regime, fell outside the scope of participation on account of having no income in the form of salary. This raises the question of how this regulation applies in practice, and whether it applies uniformly to every unsalaried manager, irrespective of other circumstances.

1. Is an enterprise manager not receiving salary required to participate in Social insurance?

Under the former Law on Social insurance no. 58/2014/QH13, the obligation to participate in compulsory social insurance was contingent upon the receipt of salary or remuneration under a labor contract. As a consequence, individuals who, in substance, performed managerial and executive functions but received no salary were entirely excluded from the social insurance system – and thus were not entitled to retirement or survivorship benefits, notwithstanding years of substantive contribution to the enterprise.

To remedy this gap between the “substantive managerial role” actually performed and the corresponding “status of participation” under the social insurance framework, the Law on Social Insurance No. 41/2024/QH15 introduced a material amendment. Pursuant to Point n, Clause 1, Article 2, an enterprise manager not receiving salary is now included among the categories of persons subject to compulsory social insurance.

2. All business managers not receiving salary are required to participate in social insurance?

In practice, a considerable number of enterprises and individuals remain uncertain, and continue to raise the question of whether an unsalaried manager is in fact obligated to participate in social insurance – a question that arises with particular frequency among foreign-invested enterprises, where managerial titles are commonly held by foreign nationals. This uncertainty stems principally from an incomplete understanding of the scope of application of the 2024 Law on Social Insurance as it relates to distinct categories of persons.

Under Clause 1, Article 2 of the Law on Social insurance 2024, the provision governing unsalaried enterprise managers who fall within the scope of compulsory participation is framed by reference to employees who are Vietnamese citizens. In other words, this provision does not, by its terms, extend automatically to managers of foreign nationality.

With respect to a manager who is a foreign national, the obligation to participate in compulsory social insurance is instead governed by a separate provision, set out in Clause 2, Article 2:

“A foreign employee working in Vietnam is subject to compulsory social insurance where such employee works under a definite-term labor contract with a term of twelve (12) months or more with an employer in Vietnam…”

Accordingly, the threshold condition for a foreign national to fall within the scope of compulsory social insurance is the existence of a definite-term labor contract of twelve (12) months or more. Where a foreign national holds only a managerial title, or acts solely as the legal representative, without having entered into a labor contract, that condition is not satisfied – and such person therefore does not fall within the category of persons subject to compulsory social insurance.

It should be noted that this condition is determined solely by reference to the existence and duration of a labor contract, and is independent of the foreign employee’s residency status or the number of days such employee is physically present in Vietnam. This stands in contrast to the personal income tax regime, under which residency status – rather than the existence of a labor contract – is the determinative factor for tax liability. Enterprises should take care to distinguish between these two separate legal concepts, so as to avoid applying the incorrect legal basis to either.

In summary, although both categories may be described as “unsalaried managers,” the obligation to participate in social insurance differs materially according to the nationality of the manager concerned: a Vietnamese national is subject to compulsory participation as of July 1, 2025 notwithstanding the absence of salary, whereas a foreign national is subject to compulsory participation only where a qualifying labor contract is in place.

>> COMPENSATION LIABILITY OF EMPLOYER FOR FAILURE IN CONTRIBUTION TO UNEMPLOYMENT INSURANCE https://linconlaw.vn/compensation-liability-of-employer-for-failure-in-contribution-to-unemployment-insurance/

>> 2026 MINIMUM WAGE: WHAT SHOULD BUSINESSES TAKE NOTE OF? https://linconlaw.vn/2026-minimum-wage-what-should-businesses-take-note-of/