Employer of Record in Vietnam

Introduction

Vietnam is one of the fastest-growing economies in Southeast Asia, with competitive labor costs, a young workforce, and strong government support for foreign investment. 

The 2019 Labor Code requires a registered local entity to sign labor contracts, file social insurance, and run payroll in VND. Setting up that entity typically takes 2 to 3 months.

An employer of record in Vietnam lets you skip that process entirely. The EOR acts as the legal employer through its own licensed Vietnamese entity, handling contracts, payroll, statutory contributions, and compliance while you retain day-to-day control over your team.

This guide covers labor laws, social insurance rates, leave entitlements, work permits, payroll taxes, termination rules, and how an EOR compares to setting up your own entity in Vietnam.

Vietnam at a Glance

• Estimated Population: 101 million 
• Currency: Vietnamese Dong (VND)
• Capital: Hanoi
• Number of officially recognized languages spoken: 110 officially recognized dialects
• Languages frequently used: Vietnamese
• GDP:  USD 476.39 billion 
  

Employment In Vietnam

Vietnamese labor laws are known for being employee-friendly. The country's potential as a market for international corporations cannot be doubted even though traditionally Vietnam has been an agricultural country. There have been several changes to the Labor regulations so that the new rules are at par and coherent with international standards. Vietnam's current labor force constitutes about 58 million people, of which about 1 million are youths. Lack of skilled labor is an issue here, with only 12% of the population belonging to the skilled or trained workforce.

According to Vietnam Labor laws, there is no distinction between foreigners and the local workforce. The Vietnam employment laws also give special protection to groups of society like the elderly, women, etc.

Even with the lack of a skilled local workforce, the laws in Vietnam are well-developed. Here is a short guide on various facets of employment in Vietnam.

Vietnam Labor Laws

Different terms of the Vietnamese Labor Code and their explanations are listed here.

Leaves

Health and Safety Obligations of Employers

• Occupational safety and hygiene are the responsibilities of the employer
• Employers need to comply with the national and local technical regulations for every equipment or machine and workplace.
• Health insurance is mandatory by law and needs to be provided by employers.
• Regular health checkups yearly for employees are mandatory for employers.

Many other inclusions make the HR domain difficult to traverse all on your own, especially if you are entering the Vietnamese market for the first time. It is best to seek expert assistance by working with an EOR of repute. Skuad offers all-inclusive HR functionalities. To learn about how we can help you, write to us today!

Contractors vs. Full-time Employees

Like most other nations, there is a difference between hiring full-time employees based on employment contracts in Vietnam and independent contractors.

Independent contractors are hired on a case-to-case basis depending upon the requirements of a project. Contractors bring in their materials to complete the project and operate independently. Contractors are paid a fee per the mutual agreement in writing, while employees are paid per employment agreement in Vietnam or labor contracts.

The difference between contractors and employees in Vietnam is that employers need to pay for health insurance, social security, and unemployment taxes in the latter. In the case of contractors, the hiring company is under no such liability. Besides, employees are entitled to leaves, minimum wages, overtime pay, probation, and termination notice per terms mentioned in Vietnam’s employment contract law. Whether you're hiring full-time employees under the 2019 Labor Code or engaging independent contractors for project work, each model carries different obligations around social insurance, contract structure, and misclassification risk in Vietnam.

Skuad supports both hiring models from a single platform:

EOR for full-time employees

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Supports employment contract generation aligned with local labor laws across supported markets
• Facilitates statutory contribution workflows covering applicable social insurance and pension obligations
• Supports payroll processing in 70+ currencies with automated tax withholding and year-end reconciliation

Contractor management

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Supports invoice generation, approval workflows, and payment processing in local currency
• Helps flag classification risk before it becomes a compliance issue with built-in worker classification checks

See Skuad's pricing for hiring employees and contractors in Vietnam

Hiring in Vietnam

There are several ways to hire employees in Vietnam. One way is to set up your company in Vietnam and outsource the recruitment process to hiring companies in Vietnam. These are third-party companies that are specialists in hiring and recruitment processes in Vietnam. Such companies help you get local and foreign workers, as per need-based.

Besides, you can use the power of social media to connect with potential employees in your business domain. Other than that, you can take the help of online job portals like Vietnam Works, and CareerBuilder.vn, CareerLink.vn, Mywork.com.vn, TNH Vietnam, Timviecnhanh, Indeed, Google For Jobs, and Jobsvietnam.org.

If you are not keen to open your subsidiary or business entity in Vietnam and yet expand your business in the country, you can take the help of an Employer of Record Vietnam. Skuad is an expert in EOR Vietnam with thorough knowledge of the local labor laws and the hiring process for natives and foreigners. We are a one-stop solution provider handling payroll, taxes, employee health benefits in Vietnam, social security, and more. When we are there at the backend, you can focus on your business core areas hassle-free. Speak to Skuad experts for more information.

Probation and Termination

The probationary period in Vietnam can be a part of the Labor contract or a specially drafted probation agreement. In the latter case, employers are not required to pay Social Security contributions during the probation period. The probationary salary cannot be lower than 85% of the original salary mutually agreed upon by both parties.

Standard Probation Period in Vietnam

• Statutory Minimum is 6 working days.
• Statutory Maximum is as follows:
  180 days for the position of enterprise executive.
  60 days for positions that require a junior college degree or above.
  30 days for positions that require a secondary vocational certificate, professional secondary school; positions of or for technicians, and skilled employees.

Termination of Employment in Vietnam

A Labor Contract in Vietnam can be terminated on the following grounds:

1. The labor contract term period expires. No prior notice is required.
2. Work completion with no prior notice required.
3. Termination is mutually agreed upon by both parties without any prior notice required.
4. In case an employee is served a jail sentence or capital punishment. No prior notice is required.
5. The death of an employee or when an employee goes missing. No prior notice is required.
6. In case the Employer closes the operation. Here too, no prior notice is required to be given to the employees.
7. Foreign employees with an expired work permit
   

Statutory Notice Period

• For an indefinite-term Contract, 45 days.
• For definite-term contracts less than 12 months, three working days.
• For definite-term contracts, 30 days.
  

Work Permits

All non-Vietnamese citizens need a work permit in Vietnam issued by the Department of Labor, Invalids, and Social Affairs, or DOLISA. The Employer needs to apply at the local DOLISA office before employing a foreign national. The work permit can be granted for a maximum of two years with a one-time renewal clause.

In certain cases, there are exceptions to the Vietnam work permits for foreigners. It includes

1. Short-term assignments that are less than 30 days
2. Internal transfers in eleven service-oriented industries
3. Board members in Vietnamese entities with more than 3 billion VND investment, and individual investors with more than three billion VND investment. 
4. Lawyers with a Foreign Registration license, trainees, and foreigners who marry a Vietnamese person can also work in Vietnam without a Vietnam work permit and without a job offer.

The application process for the work permit includes:

The employer needs to register with the local DOLISA to employ a foreign national. The office will approve the same within ten working days. Once approved, the employer needs to apply for a work permit. The labor contract needs to be submitted.

Payroll and Taxes in Vietnam

Organizations planning to build a team in Vietnam may find it difficult to navigate the Vietnam payroll and tax system complexities. 

Employer Taxation

Employee Taxation

EOR Solutions in Vietnam

Setting up a legal entity in Vietnam means registering with the Department of Planning and Investment, meeting charter capital requirements, obtaining an Investment Registration Certificate and an Enterprise Registration Certificate, and then maintaining ongoing DOLISA reporting and social insurance filings. 

That process typically takes 2 to 3 months before you can onboard a single employee.

Skuad acts as the legal employer in Vietnam, so your company can hire, pay, and manage employees without entity setup or in-house Vietnam payroll infrastructure.

Here is what Skuad helps with:

• Employment contract generation across 160+ countries, aligned with local labor laws and statutory requirements
• Statutory contribution workflows across supported markets, covering applicable social insurance, health insurance, and unemployment insurance obligations
• Payroll processing in 70+ currencies with automated tax withholding and statutory deductions
• Work permit and visa support for foreign nationals joining your team
• Termination and offboarding support aligned with local labor requirements across supported markets
• Background verification covering identity, employment history, and criminal records before onboarding

Book a demo to see how Skuad gets your first Vietnam hire onboarded in weeks, instead of months

Incorporation

To set up a long-standing business in Vietnam, you need to comply with the Enterprise Law and the Investment Law. 

For incorporating a holding company in Vietnam, you need to get your company registered in Vietnam as per the Enterprise Law and ensure it meets all requirements of the Investment Law that have been created explicitly for foreigners.

There are ample business opportunities in Vietnam, and you might want to speak to a specialist to get your company registered for forming your company in Vietnam. 

For registration, you need to have the incorporation documents before conducting a feasibility study. You need to submit all these documents to the Provincial People's Committee or the Industrial and Export Processing Zones Management Authority.

Customer Story: How Microsense Networks Scaled Across Southeast Asia with Skuad

Microsense Networks, a technology company specializing in networking solutions, needed to hire contractors across Indonesia, Sri Lanka, and Thailand. Setting up entities in three markets wasn't practical for a team of nine. 

Skuad supported the process with localized contractor agreements, cross-border payment processing, and compliance onboarding across all three Southeast Asian countries.

Read the full case study

Professional Employer Organization

A PEO, just like an EOR, offers handholding support in the niche of HR functionalities. A professional employer organization in Vietnam is not a legal Employer in Vietnam, unlike an EOR. 

A PEO is your co-employer, while an EOR is an independent employer with total liability and responsibility for payroll, taxes, and compliance. With a PEO, the salaries, taxes, and other employer liabilities are your responsibilities.

Simplifying EOR in Vietnam

Vietnam's labor framework is employee-friendly by design, and the regulatory load on employers reflects that. Between social insurance filings, mandatory Internal Labor Rules registration for teams of 10 or more, bilingual contract requirements for foreign-invested enterprises, and DOLISA work permit applications for every foreign hire, there's a lot of ground to cover before your first employee starts work.

For companies testing the Vietnamese market, building a small remote team, or hiring specialized talent without committing to a full entity setup, an EOR removes the heaviest operational barriers. 

You get compliant labor contracts, payroll in VND, statutory contributions filed correctly, and work permit support without registering a company, meeting charter capital requirements, or maintaining a local finance and HR team.

Skuad acts as the legal employer in Vietnam and supports the full hiring lifecycle across 160+ countries from a single platform, including employment contracts, payroll in 70+ currencies, social insurance administration, statutory leave tracking, and termination support.

Hire your first employee in Vietnam without setting up a local entity. Book a demo

FAQs

1. What is an employer of record in Vietnam? 

An EOR in Vietnam is a third-party company with a registered local entity that acts as the legal employer for your hires, while your company retains day-to-day operational control over the employees.

2. How much does an employer of record in Vietnam cost? 

EOR pricing in Vietnam typically ranges from $199 to $599 per employee per month, depending on the provider, scope of services, and headcount. This fee usually covers employment contracts, payroll processing in VND, social and health insurance filings, and statutory compliance. 

3. Can a foreign company hire employees in Vietnam without a local entity? 

Yes, but not directly. Vietnamese law requires a registered local entity to sign labor contracts and register employees for social insurance. A foreign company without an entity can hire through an EOR, which uses its own licensed Vietnam entity to employ workers on your behalf. 

4. What are the penalties for non-compliance with Vietnam's labor laws? 

Vietnam's 2019 Labor Code and Decree 12/2022/ND-CP impose fines ranging from 2 million VND to 200 million VND for violations, including unsigned labor contracts, missed social insurance contributions, unpaid overtime, and failure to register Internal Labor Rules with DOLISA. 

5. What is the difference between EOR and PEO in Vietnam? 

An EOR in Vietnam acts as the legal employer, signing labor contracts, filing with tax and insurance authorities, and holding full statutory liability. A PEO operates as a co-employer, where your company still carries primary legal responsibility. 

6. How quickly can an EOR hire an employee in Vietnam? 

Most EOR providers can onboard an employee in Vietnam within 5 to 14 business days, assuming the employee has all the required documentation ready.