Vietnam’s dynamic economy and growing pool of tech talent make it a top destination for global companies looking to expand. But navigating a new country’s hiring laws can be a huge headache. This is where an Employer of Record, or EOR, comes in. It’s a powerful solution that lets you tap into Vietnam’s workforce quickly and compliantly, without the months of red tape involved in setting up your own company.

This guide breaks down everything you need to know about using an eor vietnam service to build your team.

What Exactly is an Employer of Record in Vietnam?

An Employer of Record (EOR) in Vietnam is a third party organization that legally hires employees on your behalf. Think of them as your local HR and legal department. The EOR handles all the administrative heavy lifting, like payroll, taxes, benefits, and compliance with Vietnamese labor law, while you manage your employee’s day to day tasks and responsibilities. This setup allows you to hire top talent in Vietnam without establishing a local legal entity, saving you incredible amounts of time and money.

Reasons to Use an EOR in Vietnam

Expanding with an eor vietnam provider offers serious strategic advantages over the traditional route of setting up a foreign owned company.

• Speed to Market: An EOR can get your new hire onboarded and working in just a couple of weeks. In contrast, establishing a local company in Vietnam can take three to four months or even longer, delaying your projects and growth.
• Lower Upfront Costs: You get to skip the substantial costs of incorporation, which can start at $3,500, plus ongoing expenses like hiring a local director and renting office space. An EOR charges a simple, predictable monthly fee per employee, making it a much more budget friendly model.
• Guaranteed Compliance: Vietnam’s labor laws are complex and constantly changing. An EOR provides local expertise to ensure your employment contracts, payroll, and statutory contributions are always 100% compliant, mitigating the risk of fines and legal trouble.
• Hassle Free Talent Access: With a workforce of over 52 million people, Vietnam is rich with talent. An EOR lets you hire the best candidates from anywhere in the country without needing a physical office, giving you a competitive edge.

EOR Vietnam vs. Setting Up a Legal Entity

Choosing between an EOR and setting up your own company is a major decision. Here’s a quick comparison to help you decide.

For most companies, especially those hiring their first few employees or testing the market, an eor vietnam service is the faster, safer, and more cost effective choice. You can always transition to your own entity later once you reach a larger scale.

How to Hire in Vietnam with an EOR

The process is designed to be simple and efficient.

1. Choose Your EOR Provider: Select a trusted EOR with a strong presence in Vietnam (see our EOR service providers guide).
2. Find Your Candidate: You recruit the perfect person for the role.
3. Define the Terms: You agree on salary, role, and start date with your candidate.
4. EOR Handles the Rest: The EOR drafts a compliant employment contract, onboards the employee, and handles all HR, payroll, and tax registrations.
5. Your Employee Starts Work: Your new team member begins working for you, fully integrated into your company, while the EOR manages the administrative side in the background.

With a streamlined partner, this entire process can take as little as two weeks. Platforms like Bolto can even help you source and vet top engineering talent before seamlessly moving them onto a compliant EOR and payroll system.

The Critical Choice: Direct EOR Entity Ownership

When choosing an eor vietnam provider, it’s crucial to ask if they have their own legal entity in the country. Some providers subcontract the work to local third parties, which can add risk and reduce service quality. An EOR that directly employs your team through its own registered Vietnamese company, like the Bolto Global HR platform does, ensures greater accountability, reliability, and compliance. Direct ownership means they have full control over the process and a real stake in getting it right.

Transparent EOR Pricing and Quotes in Vietnam

EOR pricing in Vietnam is typically a flat monthly fee per employee, generally ranging from $300 to $700. A transparent provider will give you a clear, all inclusive fee that covers payroll, taxes, compliance, and administration.

Watch out for hidden costs like currency exchange markups or large security deposits. Our global payroll payments guide explains FX fees, payment rails, and how to budget them. For instance, some providers have been known to charge an 8% fee on currency conversions. Bolto offers a clear, flat rate of around $599 per employee (see Bolto pricing) so you know exactly what to budget without any surprises.

Navigating Employment Law and Compliance in Vietnam

An EOR’s primary value is ensuring you stay compliant with Vietnam’s detailed labor laws. Here are some of the key areas your EOR partner will manage.

Employment Contract Requirements

In Vietnam, written employment contracts are legally required for most professional roles. The contract must be in writing, provided to the employee before they start, and include key details like job duties, salary in Vietnamese Dong (VND), working hours, contract duration, and leave entitlements. It’s common to have a bilingual contract (Vietnamese and English), with the Vietnamese version legally taking precedence.

Right to Work and Work Permit Verification

For Vietnamese citizens, verifying their right to work is simple, requiring a valid government ID. For foreign nationals, the process is much more involved. They need a work permit sponsored by a legal Vietnamese entity. Your EOR acts as this sponsor, managing the entire application process with the Department of Labor, Invalids and Social Affairs (DoLISA). Work permits are typically granted to experts and managers for up to two years and are a prerequisite for obtaining a long term work visa or temporary residence card.

Onboarding Process in Vietnam via an EOR

A proper onboarding process ensures compliance from day one. Your EOR will handle:

• Contract Signing: Issuing and collecting the signed, compliant employment agreement.
• Document Collection: Gathering ID, bank details, and tax information.
• Social Insurance Enrollment: Registering the employee for mandatory social, health, and unemployment insurance.
• Tax Registration: Securing a Personal Income Tax (PIT) code for the employee.
• Welcome Orientation: Explaining local policies and being a point of contact for HR questions.

Ongoing Employment Compliance

Compliance doesn’t stop after onboarding. Throughout the employment relationship, your eor vietnam partner manages:

• Monthly Payroll and Tax Filings: Calculating salaries, withholding the correct taxes and social contributions, and filing reports with government agencies.
• Regulatory Updates: Staying on top of changes to minimum wage, tax rates, and labor laws to keep you compliant.
• Leave Management: Tracking annual leave, sick leave, and other entitlements according to Vietnamese law.
• Work Permit Renewals: Managing the renewal process for foreign employees to ensure they remain legally employed.

Employer Statutory Costs and Social Insurance

In Vietnam, employers must contribute to several social funds on top of an employee’s gross salary. This system is often called SHUI (Social, Health, and Unemployment Insurance). As an employer, you can expect to pay roughly 21.5% of the gross salary towards these funds, plus an additional 2% for a trade union fee. These mandatory contributions cover pensions, healthcare, and unemployment benefits for your employee.

Payroll and PAYE Compliance

Vietnam uses a Pay As You Earn (PAYE) system. This means employers are legally required to withhold Personal Income Tax (PIT) from employee salaries each month and remit it to the tax authorities. Payroll is typically run monthly and must be paid in Vietnamese Dong. Your EOR ensures these calculations are accurate and payments are made on time, providing detailed payslips to your employees. For a deeper operational walkthrough, read our global payroll processing guide.

A Closer Look at Personal Income Tax (PIT) and Filings

Vietnam’s PIT is progressive, with rates ranging from 5% to 35%. Tax residents (anyone in the country for 183 days or more) are taxed on their worldwide income. The system allows for personal deductions and deductions for dependents, which can lower an employee’s taxable income. An EOR manages the monthly withholdings and also handles the annual tax finalization process for your employees.

Working Hours and Overtime Rules

The standard work week in Vietnam is 48 hours, typically spread over six days, though many office jobs follow a 40 hour, five day week. Any work performed beyond the standard hours is considered overtime and must be paid at a premium rate. The overtime rate is 150% of the normal hourly wage for regular weekdays, 200% for weekends, and 300% for public holidays.

Minimum Wage in Vietnam

Vietnam has a regional minimum wage system, with different rates for four distinct regions based on economic development. As of July 1, 2024, the monthly minimum wage in Region I (including cities like Hanoi and Ho Chi Minh City) is VND 4,960,000. An eor vietnam service ensures that all salary payments meet or exceed the legal minimum for the employee’s location.

Vacation and Public Holidays

Full time employees in Vietnam are entitled to a minimum of 12 days of paid annual leave after completing one year of service. The country also observes around 11 public holidays each year. Employees who work on these holidays are entitled to triple their normal pay.

Mandatory Employee Benefits

Beyond salary, Vietnamese law mandates several benefits funded through the SHUI system. These include:

• Sick Leave: Paid through the social insurance fund.
• Health Insurance: Providing access to subsidized public healthcare.
• Social Insurance: Covering pensions, disability, and survivor benefits.
• Unemployment Insurance: Providing support between jobs for Vietnamese citizens.

Parental Leave: Maternity and Paternity Rules

Vietnam offers generous parental leave. Female employees are entitled to six months of fully paid maternity leave, funded by the social insurance fund. Fathers are entitled to five to fourteen days of paid paternity leave, depending on the circumstances of the birth.

Termination and Severance Policies

Terminating an employee in Vietnam requires a legally valid reason and proper notice periods. The notice period is typically 30 days for fixed term contracts and 45 days for indefinite contracts. Employees who are lawfully terminated may be entitled to severance pay, which is generally calculated as half a month’s salary for each year of service. Your EOR will manage this process to ensure it is handled compliantly, minimizing legal risk.

Offboarding an Employee Compliantly

When an employee leaves, whether through resignation or termination, there is a formal offboarding process. This includes calculating final pay, issuing termination documents, and de registering the employee from social insurance and tax systems. An EOR ensures every step is followed correctly to provide a clean exit for both the employee and your company.

Key Legal Considerations for Your Business

Beyond basic employment law, an eor vietnam provider helps you manage other important business risks.

Contractor vs. Employee: Getting it Right

Misclassifying an employee as a contractor can lead to significant penalties, including back payment of taxes and social insurance. An EOR helps you make the right choice by hiring workers through a compliant employment contract, ensuring they receive all legal entitlements and protecting you from misclassification risk.

How an EOR Helps Administer Benefits

While the EOR handles mandatory benefits through the SHUI system, they can also help you offer competitive supplemental benefits. This could include private health insurance or additional paid time off. The EOR can source local providers and administer these plans on your behalf, helping you attract and retain top talent in the Vietnamese market. If you are looking to offer best in class benefits to your global team, talk to an expert at Bolto for guidance.

Protecting Your IP and Data

When you work with an EOR, the employment contract can and should include strong clauses on intellectual property (IP) protection. These clauses typically state that any work or invention created by the employee during their employment belongs to your company (the end client). An EOR ensures these agreements are drafted to be enforceable under Vietnamese law.

NDAs and Confidentiality Agreements

Confidentiality is critical. An EOR can incorporate non disclosure agreements (NDAs) directly into the employment contract or as a separate document. This makes confidentiality a formal condition of employment, providing a strong legal basis to protect your trade secrets and sensitive business information.

The Smart Path to Hiring in Vietnam

For any US company looking to hire in Vietnam, using an EOR is the fastest, safest, and most efficient path forward. It removes the immense legal and administrative burden, allowing you to focus on what you do best: building your business and managing your team. See how our customers scaled engineering teams quickly. An eor vietnam partner like Bolto provides the local expertise and infrastructure you need to succeed in this exciting market.

Ready to hire top talent in Vietnam without the complexity? Learn how Bolto combines AI powered recruiting with a seamless EOR platform to help you build your global team in days.

Frequently Asked Questions about EOR Vietnam

1. How much does an EOR cost in Vietnam?
An EOR in Vietnam typically costs between $300 and $700 USD per employee per month. Look for providers with transparent, flat fee pricing to avoid hidden charges.

2. Can an EOR hire foreigners in Vietnam?
Yes, a licensed eor vietnam service can act as the legal sponsor to obtain the necessary work permits and visas for foreign employees you want to hire.

3. Is using an EOR the same as outsourcing?
No. With an EOR, the employee works for your company as an integrated member of your team. You manage their daily work and performance. The EOR simply acts as the legal employer for payroll and compliance purposes.

4. How quickly can I hire someone with an EOR in Vietnam?
Once you have identified a candidate, you can have them legally onboarded and ready to work in as little as one to two weeks, a fraction of the time it would take to set up your own legal entity.

5. What happens if I want to terminate an employee?
Your EOR will manage the termination process in full compliance with Vietnamese labor law. This includes providing the correct notice, calculating any final payments or severance, and handling all offboarding paperwork to minimize your legal risk.

6. Do I need an office in Vietnam to use an EOR?
No, you do not need a physical presence. The EOR acts as the local employer, allowing you to hire remote talent from anywhere in Vietnam without needing to rent or establish an office.

7. Can I switch from an EOR to my own entity later?
Absolutely. Many companies start with an eor vietnam service to test the market and then transition their employees to their own local subsidiary once they reach a larger scale. The EOR can help facilitate a smooth transfer of employment.