What options are available for business owners?

Business owners do not possess the characteristics of ordinary workers, so a reasonable mechanism is needed to allow them to choose between mandatory and voluntary social insurance.

The Social Insurance Law No. 41/2024/QH15 was passed by the 15th National Assembly at its 7th session on June 29, 2024, and came into effect on July 1, 2025. However, the process of implementing the law and drafting the Decree detailing and guiding the implementation of some articles of the Social Insurance Law has generated much debate, especially regarding the proposal for mandatory social insurance participation for business owners.

2 options

According to the Minister of Labour, Invalids and Social Affairs, Dao Ngoc Dung, the 2024 Social Insurance Law was developed to ensure social security as stipulated in the Constitution and to institutionalize the views, orientations, and reform contents in the documents and resolutions of the Party and the State. Along with that, it aims to develop the social insurance system towards a diverse, flexible, multi-tiered, modern, and internationally integrated system, moving towards social insurance coverage for the entire workforce.

The law is structured into 11 chapters and 141 articles, of which 56 articles and clauses delegate the authority to the Government to provide detailed regulations. Regarding policies and regulations on compulsory social insurance, 26 articles and clauses delegate the authority to the Government to provide detailed regulations.

Compared to the current Social Insurance Law, the 2024 Social Insurance Law has expanded the scope of mandatory social insurance participation to include: business owners of registered businesses; part-time workers at the commune, village, and neighborhood levels; part-time employees; and managers of enterprises and cooperatives who do not receive salaries.

In the recently drafted Decree detailing and guiding the implementation of several articles of the Law on Social Insurance regarding compulsory social insurance, the Ministry of Labor, Invalids and Social Affairs has proposed adding the case of employees specified in points a, b, c, i, k, l of Clause 1 and Clause 2, Article 2 of the 2024 Law on Social Insurance who are sent to study, intern, or work domestically or abroad while still receiving their salaries in Vietnam, to be subject to compulsory social insurance participation.

In addition, the draft also proposes two options for determining whether business owners must participate in compulsory social insurance. Option 1 proposes that business owners subject to compulsory social insurance include: business owners with registered businesses who pay taxes using the declaration method; and business owners with registered businesses but who do not fall under the above categories and request to participate in compulsory social insurance. Option 2 proposes that business owners with registered businesses and who request to participate in compulsory social insurance be included.

Small traders doing business at Ba Hoa Market (Tan Binh District, Ho Chi Minh City) Photo: HOANG TRIEU

There are still many concerns.

Regarding the two proposed options for mandatory social insurance contributions for business owners, Mr. Tran Van Trieu, Chairman of the Lawyers Association of District 12 (Ho Chi Minh City), believes that the regulations as drafted are unreasonable.

According to Mr. Trieu, the 2024 Social Insurance Law stipulates that business owners are subject to mandatory social insurance, so it is appropriate for business owners who register their businesses and pay taxes using the declaration method (in Option 1) to pay social insurance. However, although the Social Insurance Law stipulates that this group is subject to mandatory social insurance as prescribed by the Government, if the regulation states that business owners can only participate in mandatory social insurance upon request (Options 1 and 2), it would inadvertently turn them into voluntary social insurance participants – meaning their participation depends on their own will. If they do not participate, the law cannot apply sanctions.

"Both of the above options do not clearly define whether participation in social insurance for business owners is mandatory or voluntary, and seem to be creating a new form of social insurance called 'voluntary mandatory social insurance,' which could easily cause difficulties for both participants and authorities in the process of law enforcement. Therefore, it should only be stipulated that business owners with registered businesses and tax payments must participate in mandatory social insurance," Mr. Trieu proposed.

Lawyer Tran Huu Tin, Head of Tin & Associates Law Office, observes that business owners often do not have labor contracts and, in some cases, are both employers and employees, paying themselves wages. Therefore, business owners do not possess the characteristics of a purely employee – a group subject to mandatory social insurance contributions. Meanwhile, according to Article 31 of the 2024 Social Insurance Law, business owners can choose their salary as the basis for mandatory social insurance contributions, which somewhat reflects the nature of voluntary social insurance. Therefore, according to Mr. Tin, an open mechanism should be created to allow this group to choose between mandatory and voluntary social insurance.

Ms. Nguyen Thi Thao Dung, a human resources officer at a business in Hoc Mon district, Ho Chi Minh City, also believes that only business owners who are registered and pay taxes should be required to participate in mandatory social insurance, while other cases can participate in voluntary social insurance if needed.

Proposal to record the period of mandatory social insurance contributions.

The Ministry of Labour, Invalids and Social Affairs is drafting a Resolution of the National Assembly Standing Committee on recognizing the period of compulsory social insurance contributions of business owners who participated before the effective date of the 2024 Social Insurance Law.

Minister of Labour, Invalids and Social Affairs Dao Ngoc Dung stated that before the Social Insurance Law of 2024 came into effect, the legal regulations, as well as the Social Insurance Laws of 2006 and 2014, did not stipulate that business owners were subject to mandatory social insurance participation. However, from 2003 to the present, local social insurance agencies have been collecting mandatory social insurance contributions from business owners and paying social insurance benefits. As of May 31, 2023, there were 3,567 business owners participating in mandatory social insurance; the amount contributed to the Social Insurance Fund was approximately 113 billion VND...

Therefore, in the draft resolution, the Ministry of Labour, Invalids and Social Affairs proposes to record the period of mandatory social insurance contributions made by business owners before July 1, 2025, as a basis for resolving social insurance benefits according to the provisions of the Social Insurance Law.

Source: https://nld.com.vn/dong-bhxh-bat-buoc-phuong-an-nao-cho-chu-ho-kinh-doanh-19624120720565225.htm