Vietnam Social Insurance Merger: Complete Guide to New Model and Compliance Processes

Key takeaways

• Vietnam’s social insurance system transitions to a 3-tier model from July 1, 2025, completing restructuring by October 1, 2025, with 34 provincial-level SI agencies and no more than 350 grassroots SI offices replacing the previous 63 regional units
• Businesses must proactively confirm new administrative contacts, unit codes, and bank account details to avoid transaction disruptions—transferring funds to incorrect accounts creates evidence of “late payment” despite actual payment
• Grassroots SI offices become direct transaction points organized by commune-level administrative areas, handling all administrative procedures from collection and booklet issuance to employee registration and benefit processing
• Reviewing data integrity during system migration is mandatory to detect missing contribution periods, incorrect information, and especially new mandatory SI participants from July 1, 2025
• Non-compliance results in administrative penalties, back payments with interest, and in severe cases, criminal prosecution for SI contribution evasion

From July 1, 2025, Vietnam’s social insurance system officially transitions to a new organizational model with a more streamlined structure. According to Decision No. 2286/QD-BTC issued by the Minister of Finance, Vietnam Social Insurance (VSI) operates across three levels: Central, Provincial, and Grassroots. This restructuring process follows a phased roadmap and will be completed no later than October 1, 2025, directly affecting compliance and operational processes for all businesses.

How does the new social insurance model work?

This new structure brings fundamental changes in organization, management hierarchy, and functional allocation that business leaders must understand to adjust their social insurance compliance strategies.

Organizational changes and new naming

The most visible change concerns nomenclature and organizational scale. The designation “Regional SI Agency” was officially changed to “Provincial-level SI Agency” from July 18, 2025, to align with the new administrative structure. The number of units has been significantly consolidated from 63 regional SI agencies to just 34 provincial-level SI agencies nationwide, organized according to provincial administrative units.

Provincial-level SI agency headquarters must be located at the political-administrative center of the province, with legal entity status, official seal, and separate bank accounts as prescribed by law. Regarding departmental structure, Hanoi SI and Ho Chi Minh City SI agencies are organized with 9 operational departments, while other provincial-level SI agencies have 8 operational departments, ensuring a streamlined yet effective structure.

Streamlined management structure

New model: 3 clear management tiers

• Before: Vietnam Social Insurance (Central) → Regional SI Agency → District SI Agency → Enterprise
• After: Vietnam Social Insurance (Central) → Provincial-level SI Agency (34 units) → Grassroots SI Office → Enterprise

The new SI organizational model is designed with a 3-tier structure: Vietnam Social Insurance at the Central level, Provincial-level SI Agencies at the intermediate level, and Grassroots SI Offices at the base level. Importantly, during the transition period from now until before September 30, 2025, district-level SI agencies and inter-district SI agencies are being renamed “Grassroots SI Offices” to standardize identification and facilitate data management.

Grassroots SI Offices under the new model are established at commune-level administrative areas (communes, wards, special zones) and serve as direct transaction points with businesses and citizens. The number of Grassroots SI Offices does not exceed 350 units nationwide, with legal entity status, official seal, and separate bank accounts, but without internal organizational apparatus. It’s important to note that in commune-level administrative areas where Provincial-level SI agency headquarters are located and some adjacent areas, functions will be directly performed by the Provincial-level SI agency.

Redistributed functions and responsibilities

The new functional hierarchy creates clearer responsibility divisions between levels, helping businesses identify the right contact points for different types of procedures.

• Provincial-level SI agencies are responsible for organizing and implementing SI, health insurance (HI), and unemployment insurance (UI) policies and regimes, as well as organizing the collection and payment of UI benefits throughout the provincial territory. Additionally, Provincial-level SI agencies manage and utilize extra-budgetary state financial funds, conduct specialized inspections in SI, UI, and HI fields, and direct and closely supervise all activities of subordinate Grassroots SI Offices.
• Grassroots SI Offices, with 18 assigned tasks and powers, directly receive and process collection documents, issue booklets, register employee additions/reductions, resolve SI, UI, and HI benefit claims, and handle all administrative procedures for businesses and citizens in assigned commune-level administrative areas. Grassroots SI Offices also coordinate with commune-level People’s Committees in disseminating, popularizing, and implementing policies, while organizing electronic transactions in SI, UI, and HI fields as prescribed.

What do businesses need to do to ensure compliance?

The compliance process during this transition period demands absolute precision and proper sequencing to avoid legal risks that could affect business operations. Social insurance filings for businesses in Vietnam are particularly critical during this period.

1. Confirm new administrative contacts

Changes in SI agency administration create dangerous information gaps. Immediately identify the officer directly responsible for your unit at the new Provincial-level SI agency or Grassroots SI Office, including direct phone numbers and email addresses. Lack of accurate contact points can cause important documents such as employee registration or benefit processing to be suspended indefinitely, resulting in financial losses and reputational damage.

2. Control enterprise identification codes

The SI unit code is the key to accessing the entire electronic transaction system. If the code changes without synchronized updates to declaration software, all transactions will be rejected with the message “Unit does not exist.” This not only disrupts SI contribution processes but also creates evidence of “late payment” in the system, leading to administrative penalties regardless of whether the business has transferred funds.

3. Ensure proper payment flow

State treasury account information of SI agencies changes according to new administrative jurisdictions. Transferring funds to incorrect accounts creates a paradoxical situation: the business has made payment but the system records it as “unpaid.” The explanation and correction process can extend for months, directly affecting employees’ ability to access SI benefits when needed.

4. Review data integrity

Data migration between systems typically has high error rates due to asynchronization between old and new codes. Review the SI contribution history for each employee to detect missing contribution periods or incorrect personal information. It is particularly critical to verify new subjects required to participate in mandatory SI from July 1, 2025, including business managers not receiving salaries—a group frequently overlooked that creates significant legal risks during inspections.

5. Synchronize internal systems

External changes require internal adjustments. Update unit codes, bank accounts, and standardized payroll processes in SI management software, while clearly communicating changes to Finance, Accounting, and Human Resources departments. Pay special attention to transitioning from SI codes to citizen identification numbers and properly discontinuing old declaration services before registering new services to avoid system conflicts.

6. Control transaction quality

Common errors such as incorrect procedure codes, improperly structured documents, or unregistered documents in the new system often arise from inadequate pre-submission verification. Establish information authentication processes before submission and maintain direct communication channels with responsible SI officers to quickly resolve issues. Each rejected document not only wastes time but also creates negative marks in the transaction history with administrative authorities.

Inadequate implementation of these steps can lead to administrative penalties, back payments with interest, and in severe cases, criminal prosecution for SI contribution evasion. In the context of increasingly stringent compliance regulations, proper implementation of this process becomes particularly critical to avoid legal risks.

To ensure the transition goes smoothly with full compliance, having a partner who deeply understands Vietnamese regulations is crucial. When selecting compliance service providers, businesses need to carefully evaluate capabilities and hands-on experience. Talentnet’s compliance consulting services can help your business navigate these complex changes, from document preparation to working with social insurance agencies, ensuring your business operations continue without interruption.