Vietnam is fast emerging as a potential regional leader in south-east Asia. A rapidly-growing economy, strategic geographic location, favorable trade agreements and an improving rank of Doing Business Index (it was ranked 70th amongst 190 nations in the world), and the opening up of the economy for FDI are some of the reasons that Vietnam is becoming a hotspot for foreign investments.
Employer of Record in Vietnam
If you plan to expand globally and look to enter Vietnam, you have many options to do so. You could incorporate a firm in Vietnam, work with a subsidiary, or appoint an Employer of Record in Vietnam.
You could alternately choose a PEO or Professional Employer Organization to facilitate commercial business on foreign shores. Skuad is one of the leading EOR solution providers in the region, with thorough knowledge of Vietnamese labor laws and a comprehensive grasp of the hiring, boarding, payroll, and taxation processes. Choosing to go ahead with Skuad as your EOR can help you save time and costs, ensure compliance with the local regulations with minimized risks.
Vietnam at a Glance
Estimated Population: 97,338,579
Currency: Vietnamese Dong (VND)
Number of officially recognized languages spoken: 110 officially recognized dialects
Languages frequently used: Vietnamese
GDP: 261.9 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 the 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:
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 know 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. While 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.
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, 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 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 by both parties.
Termination of Employment in Vietnam
A Labor Contract in Vietnam can be terminated on the following grounds:
- Labor contract term period expires. No prior notice is required.
- Work completion with no prior notice required.
- Termination mutually agreed by both parties without any prior notice required.
- In case an employee is served a jail sentence or capital punishment. No prior notice is required.
- The death of an employee or when an employee goes missing. No prior notice is required.
- In case the Employer closes the operation. Here too, no prior notice is required to be given to the employees.
- 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.
If you’re looking to hire employees in Vietnam, a great way to ensure compliance with all regulations and laws is to work with Skuad, one of the leading employer of record companies in Vietnam. Skuad is a versatile and adaptable platform that can help you expand your business in Vietnam cost-effectively and get a competitive edge over other companies hiring in the country.
As your Employer of Record EOR, Skuad will handle end-to-end recruitment and hiring processes on your behalf. And, once the employee is on board, the payroll and taxes, salaries, minimum wages, leaves, overtime, probation, termination, and all other aspects of employment will be effortlessly managed by Skuad so that you can engage yourself in your expansion plans without having to worry about these things.
Skuad offers some of the most comprehensive employer of record services and is an online solution provider with a self-service platform, open 24x7 to provide professional services for easy expansion.
Types Of Visas In Vietnam
In Vietnam, a Vietnam work visa and work permit are two separate entities. The visa allows foreigners to enter and stay in Vietnam. A work permit gives the foreigner the right to work in Vietnam. Basically, if a foreigner wishes to work in Vietnam, they need a visa and a work permit or a TRC (Temporary Residence Card).
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 for Vietnam work permits for foreigners. It includes – short-term assignments that are less than 30 days; internal transfers in eleven service-oriented industries; board members in Vietnamese entities with more than 3 billion VND investment; and individual investors with more than three billion VND investment. Lawyers with a Foreign Registration license, trainees, and foreigners who marry a Vietnamese person can also work in Vietnam without a Vietnam work permit without a job offer.
The application process for the work permit includes:
- The employer needs to register with the local DOLISA on the need to employ a foreign national. The office will approve of 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
Vietnam Payroll Tax Rates
Payroll outsourcing Vietnam to an expert EOR like Skuad can be of great assistance to your growth plans as you do not need to get into the intricate details of the payroll taxes in Vietnam.
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 to meet 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.
Professional Employer Organization (PEO)
A PEO, just like an EOR, offers handholding support in the niche of HR functionalities. A professional employer organization in Vietnam is not the legal Employer in Vietnam, unlike an EOR. Skuad offers both types of services, and you can get in touch with us to ensure that you start your business in Vietnam without much stress and hassle.
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.
Skuad offers you world-class PEO and EOR services in Vietnam. Skuad has an outstanding and impeccable track record, having helped numerous SMEs and start-up companies expand their global footprint seamlessly. Since all countries have different labor laws, codes, rules, and regulations, you can save time and resources when working with Skuad while ensuring that you have the best local and foreign talents working with you.
Speak to Skuad experts who can help you decide between a PEO and EOR based on your unique business requirements.