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The EU-Vietnam trade deal does not cover hiring in Vietnam

Published · 6 min read

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Photo: litoon dev / Unsplash

The EU-Vietnam free trade agreement regulates trade in goods and services, investment and public procurement. It does not regulate the hiring of local staff: Vietnamese labour law does. If you are setting up a technical team there, the agreement changes little. This article sets out what it does cover and why it may still matter to you.

What the agreement is and since when it applies

There are two separate agreements. The trade agreement (EVFTA) entered into force on 1 August 2020, according to the European Commission. The investment protection agreement (EVIPA) was signed in Ha Noi on 30 June 2019 and is not yet in force.

They run on different timetables. The trade agreement needed approval from the EU institutions and from Vietnam. The investment agreement also needs ratification by all 27 member states. Ratifying means approving a treaty in a national parliament and notifying it officially.

What the trade agreement covers

A tariff is a tax paid when a product is imported. The agreement removes 99% of tariffs between the two sides, according to the Commission. The rest of the text is organised in blocks:

  • Goods: tariffs, technical standards, customs and health rules. Chapter 2 includes national treatment, which requires an imported product to be treated like a local one once it has entered the country.
  • Services and investment: opening sectors to foreign companies, including IT, financial, transport and telecommunications services.
  • Public procurement: European companies can bid for contracts from ministries, large state-owned enterprises, and the cities of Ha Noi and Ho Chi Minh.
  • Intellectual property: protection above the WTO minimum, and 169 European geographical indications protected.
  • Sustainability: labour and environmental commitments (chapter 13).
  • E-commerce: neither side charges customs duties on electronic transmissions.

What it does not cover

The agreement does not regulate the hiring of local workers. It does not cover work visas or the Vietnamese labour regime either: contracts, working hours, social contributions, dismissal and unions. All of that depends on Vietnam's Labour Code and on Vietnamese authorities.

None of the Commission fact sheets we opened describes a chapter on hiring, and the table of contents of the text has none. PENDIENTE: cite the article of chapter 8 that sets its scope with respect to access to the labour market, because we could not open the full text on EUR-Lex.

Timeline: entry into force and tariff phase-out

Vietnam removed 65% of its tariffs on European products on the day the agreement entered into force and removes the rest over 10 years. The EU removed 71% of its tariffs on Vietnamese products that same day and removes the rest over 7 years. Both figures come from the Commission and the Council of the EU. The end dates (August 2027 and August 2030) are our own calculation from those periods.

Timeline with two lanes, from 2019 to 2030. EVFTA trade agreement: 30 June 2019 signed in Ha Noi; 30 March 2020 the Council of the EU adopts the decision concluding it; 1 August 2020 entry into force, with Vietnam removing 65% of tariffs on EU goods and the EU 71% on Vietnamese goods (highlighted); expected: August 2027 end of the EU tariff phase-out and August 2030 end of Vietnam's. EVIPA investment agreement: 30 June 2019 signed; 18 June 2020 Vietnam notifies its ratification; 20 January 2022 Spain notifies its ratification; 1 October 2026, 20 of 27 member states have notified ratification and the agreement is not in force.

Chapters that may matter to a European tech company

Chapter What it allows What still needs local authorisation
2. National treatment and market access for goods Importing European hardware into Vietnam at lower or zero tariffs, following the schedule Customs clearance and compliance with Vietnamese technical rules
8. Investment, services and e-commerce Supplying services and setting up in the sectors Vietnam opened, IT among them. No duties on electronic transmissions Registering the company and the investment with Vietnamese authorities, and the sector limits in Vietnam's schedule of commitments
9. Public procurement Bidding for contracts from ministries, state-owned enterprises, Ha Noi and Ho Chi Minh Following the Vietnamese tendering procedure. Vietnam has a 15-year transition period to lower its thresholds
12. Intellectual property Protection above the WTO minimum; compensation for patent life lost in long approval procedures Registering patents and trademarks with the Vietnamese office
13. Trade and sustainable development Commitments from both sides on labour standards and the environment Complying with Vietnam's Labour Code. The chapter does not replace that code

PENDIENTE: Vietnam's specific commitments for IT services (annex to chapter 8) have not been opened.

The investment protection agreement, separately

Investment protection is a set of safeguards for money a company puts into another country, for example against expropriation without compensation or discriminatory treatment. The EVIPA has one chapter on protection and another on dispute settlement. According to the Council, it will replace 21 bilateral investment treaties between member states and Vietnam.

As of 1 October 2026 it is not in force. It enters into force once all 27 member states have ratified it. The Council of the EU's page, consulted that day, records 20 notifications, including Spain's (20 January 2022). Belgium, Ireland, France, Cyprus, the Netherlands, Austria and Slovenia are missing.

A Vietnamese outlet reported on 2 August 2026 that the French government sent its ratification bill to Parliament on 27 July. PENDIENTE: confirm the status of that process in an official French source.

Until then, the bilateral treaties already in force remain the protection that exists. PENDIENTE: check whether Spain has a bilateral investment treaty in force with Vietnam.

Labour and sustainability commitments

What the parties promise and how it is monitored

Vietnam committed to apply the ILO conventions it has ratified and to ratify the remaining fundamental ones. It ratified convention 98 (collective bargaining) in 2019 and convention 105 (forced labour) in 2020, according to the ILO and the Council. Both sides also committed to the Paris Agreement and other environmental treaties.

Monitoring is done by domestic advisory groups with employer, union and civil society representatives. Vietnam set up its own by government decision on 17 August 2021. The Commission also describes a dedicated dispute settlement system for this chapter.

Their limits

The commitments bind states, not individual companies. A Vietnamese or European company remains subject to the Vietnamese Labour Code, not to chapter 13. The advisory groups are consultative bodies.

Two points remain open. PENDIENTE: status on 1 October 2026 of ILO convention 87 (freedom of association) in Vietnam; the sources we opened date from 2024 and described ratification as planned, not done. PENDIENTE: confirm in the text of chapter 13 whether a breach can end in trade sanctions.

What this means for a 20-person startup

Very little. Hiring a developer in Vietnam is governed by Vietnamese labour law, or by the contract of a local provider that employs them, and the agreement changes neither. It may show up in intellectual property, in the absence of duties on electronic transmissions and, if you ever invest there through your own subsidiary, in the investment agreement once it enters into force.

The trade data give the scale: in 2025 the EU imported 63,873 million euros of goods from Vietnam and exported 12,173 million, according to the Commission fact sheet based on Eurostat data. That is goods, mostly machinery. A software team does not go through customs.

FAQ

Can I hire a developer in Vietnam thanks to the agreement?

The agreement does not regulate hiring. You hire under Vietnam's labour rules, either directly or through a local company that acts as the employer.

Does the agreement save me tariffs if I export or import software?

Not for software delivered as a service, because tariffs apply to physical goods. There is a commitment not to charge duties on electronic transmissions. If you buy servers or laptops for the team, the tariff schedule may affect that hardware.

Is the investment protection agreement in force?

No. As of 1 October 2026, 20 of the 27 member states have ratified it, according to the Council of the EU, and all of them must do so.

Does the agreement protect Vietnamese workers' rights?

It contains Vietnamese commitments on ILO labour standards, monitored by advisory groups. The specific rights of each worker are set by Vietnamese labour law, and the agreement does not replace it.

What to do next

If you want to know what obligations an employer has when setting up a technical team in Vietnam, write to us with your case. We explain which labour regime applies and what steps to take before the first hire, with no commitment for you.

Sources

All sources consulted: 1 October 2026.