Vietnam’s 2025 Social Insurance Law brings major changes: compulsory social insurance for one-member LLC Directors and Business Household Owners is now mandatory. This comprehensive guide covers new regulations, contribution rates, enrollment procedures, and penalties for non-compliance to help businesses navigate the transition.
Overview of the 2025 Social Insurance Law Changes
The 2025 Law on Social Insurance (amended), effective July 1, 2025, represents one of the most significant regulatory changes for business owners in years. These new requirements are no longer draft proposals—they are mandatory legal obligations. This guide provides a complete update on compulsory social insurance for one-member LLC Directors and Business Household Owners, clarifying critical questions such as “Are business household owners required to pay?” and how “non-salaried directors” are handled. Understanding these regulations is essential to avoid retroactive collection and heavy penalties.
Part 1: Compulsory Social Insurance for One-Member LLC Directors
This represents a major concern for small and medium-sized business owners, as it directly impacts company costs and management obligations.
1. Which One-Member LLC Directors Must Participate?
The new regulation clearly identifies the required subject: The enterprise manager of a one-member limited liability company owned by an individual.
If you are the owner and hold a Director or General Director title, you must participate in compulsory social insurance. This applies whether or not you receive a salary, which is the most complex and disputed aspect.
2. Regulations on Non-Salaried Directors Paying Social Insurance
A common practice is for owner-Directors of one-member LLCs to forgo monthly salary to optimize personal income tax and social insurance costs, instead receiving after-tax profits year-end.
The 2025 Law conclusively resolves this issue. Regardless of whether the Director receives a salary, simply holding a management title (Director, General Director) creates a compulsory social insurance obligation. Receiving no salary is no longer grounds for exemption from the contribution requirement.
Part 2: Compulsory Social Insurance for Business Household Owners
This second major change brings Business Household Owners into the compulsory system for the first time. Below is detailed analysis and contribution comparison with one-member LLC Directors.
1. Implementation Roadmap and Applicable Subjects
Business Household Owner participation is phased:
- Phase 1 (From July 1, 2025): Compulsory for business household owners following accounting standards and declaring taxes—larger-scale households with transparent bookkeeping.
- Phase 2 (From July 1, 2029): Compulsory for all remaining business household owners, including those paying fixed taxes.
As of November 2025, business household owners using the declaration method have been subject to these requirements for four months.
2. Contribution Rates and Basis
A. For Business Household Owners
Business Household Owners pay social insurance at a “reference level” (approximately VND 2,340,000). Owners may choose their contribution income basis within a regulated range:
- Contribution rate: Total of 29.5% on registered income:
- 3% for Sickness and Maternity;
- 22% for Pension and Survivorship;
- 4.5% for Health Insurance.
- Minimum contribution: VND 2,340,000 x 29.5% = VND 690,300/month
- Maximum contribution: (VND 2,340,000 x 20) x 29.5% = VND 13,806,000/month
B. For One-Member LLC Directors
Contribution calculation for one-member LLC Directors depends on salary status:
- Case 1: Director receives a salary
- Social insurance contribution is based on actual salary per labor contract and payroll.
- Contribution mirrors normal employees (32% total: company 21.5%, Director 10.5%).
- Salary basis for contribution cannot exceed 20 times the reference level.
- Case 2: Director receives no salary
- This is where the new law applies mandatory participation.
- The salary basis for social insurance contribution must not be lower than the reference level (approximately VND 2,340,000).
- The company must contribute monthly social insurance for the Director based on this minimum level (VND 2,340,000 x 21.5% company portion; Director pays 10.5%).
3. Flexible Payment Methods for Business Household Owners
Business Household Owners have more flexible payment options than one-member LLC Directors (who must pay monthly through company):
- Monthly;
- Quarterly (every three months);
- Semi-annually (every six months).
Important note: After continuously participating for at least 12 months at the chosen level, business household owners may register to adjust their income basis for social insurance contribution (increase or decrease) to match their financial situation, provided it stays within the regulated range.
4. Exemptions from Social Insurance Participation
A Business Household Owner is NOT subject to compulsory social insurance if they:
- Are currently receiving a monthly pension;
- Are currently receiving a monthly social insurance allowance (such as for reduced work capacity);
- Have reached statutory retirement age per the Labor Code (in 2025: men 61 years 3 months, women 56 years 8 months). (These exemptions may also apply to one-member LLC Directors if they receive pensions or monthly allowances.)
Rights and Registration Procedures
1. Benefits Available
Full participation in compulsory social insurance grants access to all standard employee benefits:
- Sickness benefits: Allowances during medically certified sick leave;
- Maternity benefits: Critical support for female owners or spouses of male owners;
- Pension (retirement) benefits: The most significant benefit—a stable pension upon reaching retirement age;
- Survivorship benefits: Funeral grants and allowances for beneficiaries if the participant passes away.
2. Registration and Submission (Within 30 Days)
Deadline: Subjects must submit the social insurance registration dossier within 30 days from the date they become subject to participation (e.g., 30 days from July 1, 2025).
Dossier requirements:
- For Business Household Owners: Submit directly to district-level social insurance agency—registration form for employees;
- For One-Member LLC Directors: Company registers the Director as an employee—registration form for employers and updated employee list.
3. Penalties for Non-Compliance
As this is a mandatory requirement, non-participation or late participation triggers strict penalties. As of November 5, 2025, non-compliant entities face:
- Retroactive collection of all contributions: The social insurance agency will collect the full amount owed from July 1, 2025, to present;
- Late payment penalties: High interest charges will be applied to the retroactive amount;
- Administrative fines: Penalties for social insurance violations;
- Benefit ineligibility: If risks (sickness, maternity) occur during non-payment periods, no benefits will be provided by the social insurance fund.
Including one-member LLC Directors and Business Household Owners in the compulsory social insurance system represents a major step toward fairness and social security. Although initial costs increase, long-term benefits and legal protection for business owners are substantial.
The July 1, 2025, deadline has passed. Businesses and business households subject to this law must urgently complete registration to avoid retroactive collection and severe penalties. This is the time to consult professional accounting and insurance advisors for compliant and safe implementation.
For any inquiries, contact Wacontre Accounting Services via Hotline: (028) 3820 1213 or email [email protected] for prompt assistance. With a team of experienced professionals, Wacontre is committed to providing dedicated and efficient service.
