Employer of Record in Vietnam: A Complete Guide for 2026

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.

Key takeaways

• An EOR in Vietnam acts as the legal employer through its own licensed entity, so you can hire without registering a company, obtaining an IRC/ERC, or meeting charter capital requirements.
• Employer statutory contributions total 23.5% of gross salary: 17.5% social insurance, 3% health insurance, 1% unemployment insurance, and 2% trade union fee.
• The 2019 Labor Code requires labor contracts in Vietnamese, Internal Labor Rules registration for teams of 10 or more, and DOLISA work permit applications for every foreign hire.
• Skuad's EOR pricing for Vietnam starts at $199/month per employee, covering employment contracts, payroll in VND, statutory insurance filings, and work permit support.
• Onboarding through an EOR typically takes 5 to 14 business days, compared to 2 to 3 months for entity setup.

Use Skuad's employee cost calculator to estimate your total hiring cost 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 

How does an EOR work in Vietnam?

An EOR in Vietnam operates through its own registered Vietnamese entity to employ workers on your behalf, taking on the legal obligations that Vietnamese law assigns to the employer of record.

The EOR's key responsibilities include:

Your company retains full operational control: you assign work, set performance goals, and manage the team day-to-day. The EOR handles the legal and administrative layer that Vietnamese law requires a registered local entity to perform.

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

What are the employment laws in Vietnam?

Vietnam's employment framework is governed by the 2019 Labor Code (effective 1 January 2021), which sets the rules for labor contracts, working hours, overtime, minimum wages, and employee protections.

The Code makes no distinction between foreign and local workers in terms of rights, and provides additional protections for women, the elderly, and minors.

Three key regulations sit alongside the Labor Code:

What are the different types of labor contracts in Vietnam?

The 2019 Labor Code recognizes two types of employment contracts:

All contracts must be in writing, in Vietnamese, and signed before the employee starts work. A verbal agreement is only permitted for temporary work lasting under one month.

What are the working hours and overtime rules in Vietnam?

The standard work week in Vietnam is 48 hours (8 hours per day, 6 days per week). The government encourages a 40-hour, 5-day work week, but it is not mandatory.

What are the minimum wage rates in Vietnam?

Vietnam's minimum wages are set by region under Decree 293/2025/ND-CP, effective 1 January 2026. The four regional rates reflect differences in local living costs and economic conditions, with an average increase of 7.2% over the previous rates.

The applicable rate depends on the commune or ward where the employer's operating unit is registered, as defined in the Decree's annex. Employers must ensure no employee receives compensation below the applicable regional minimum.

What leave entitlements do employees get in Vietnam?

Vietnam's 2019 Labor Code mandates paid annual leave, public holidays, sick leave, maternity leave, and personal leave for all employees working under a labor contract.

What are the mandatory employee benefits you need to provide in Vietnam?

Vietnamese law requires employers to provide health insurance, regular health checkups, and a safe workplace for all employees. These are not optional add-ons; they are statutory obligations under the 2019 Labor Code and the Law on Occupational Safety and Hygiene.

Mandatory employer obligations include:

• Enrolling every employee in health insurance (employer contributes 3% of gross salary)
• Conducting regular health checkups for all employees, at the employer's expense
• Complying with national and local technical regulations for all equipment, machinery, and workplace conditions
• Providing occupational safety training and protective equipment for roles with workplace hazards

Employers who fail to provide health insurance or meet safety standards face administrative fines under Decree 12/2022/ND-CP, ranging from 2 million to 200 million VND depending on the violation.

How to hire employees in Vietnam?

There are three main ways to hire employees in Vietnam:

1. Set up your own entity (IRC, ERC, charter capital, DOLISA registration) and hire directly or through a local recruitment agency
2. Use an EOR, which acts as the legal employer through its own Vietnamese entity, so you can hire without any local setup
3. Engage independent contractors for project-based work (different obligations apply; see below)

Common recruitment channels in Vietnam include VietnamWorks, CareerBuilder.vn, CareerLink.vn, Mywork.com.vn, Indeed, and Google for Jobs.

What is the difference between contractors and full-time employees?

The key distinction is liability. For full-time employees, the employer must pay social insurance (17.5%), health insurance (3%), unemployment insurance (1%), and trade union fees (2%), totaling 23.5% of gross salary. For independent contractors, none of these obligations apply.

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.

What is the probation period in Vietnam?

The probation period in Vietnam can be included in the labor contract or handled through a separate probation agreement. If a separate agreement is used, the employer is not required to pay social insurance contributions during probation. The probationary salary cannot be lower than 85% of the agreed-upon salary.

Either party can end probation without notice and without severance. At the end of probation, the employer must either confirm the employee under a full labor contract or terminate the arrangement.

What are the termination and severance rules in Vietnam?

Termination of employment in Vietnam is governed by the 2019 Labor Code, which sets out specific grounds, notice periods, and severance obligations. Employers cannot terminate a labor contract outside the grounds listed in the Code, and any dismissal for disciplinary reasons must reference an offense listed in the registered Internal Labor Rules (ILR).

Grounds for termination

Statutory notice period

Severance pay

Employees who have worked for 12 months or more are entitled to severance pay equal to half a month's salary for each year of service. The salary used for calculation is the average of the 6 months immediately preceding termination.

Years in which the employee was covered by unemployment insurance are excluded from the severance calculation, since unemployment insurance serves a similar function.

Severance is not payable when the employee is terminated for disciplinary reasons or when the employee unilaterally terminates the contract without proper notice.

Hire and pay employees in Vietnam without setting up a local entity. Book a demo.

Do foreign workers need a work permit in Vietnam?

All non-Vietnamese citizens working in Vietnam must obtain a work permit issued by the Department of Labor, Invalids, and Social Affairs (DOLISA). The employer is responsible for filing the application. Work permits are granted for a maximum of two years and can be renewed once.

Who is exempt from work permit requirements?

The following categories do not require a work permit:

• Short-term assignments under 30 days
• Internal transfers in 11 service-oriented industries
• Board members of Vietnamese entities with over 3 billion VND investment
• Individual investors with over 3 billion VND investment
• Lawyers holding a Foreign Registration license
• Trainees
• Foreign nationals married to a Vietnamese citizen

What is the work permit application process?

1. The employer registers the need for a foreign worker with the local DOLISA office. 
2. DOLISA approves the request within 10 working days. 
3. The employer applies for the work permit, submitting the labor contract and required documents. 
4. The work permit is issued for a maximum of 2 years.

What are the visa and immigration requirements for foreign workers in Vietnam?

Foreign employees typically enter Vietnam on a business visa (DN or LD category) and convert to a work permit within the legally required timeframe. The employer must initiate the work permit application before the employee starts working. Visa extensions and renewals are tied to work permit validity, so any lapse in the permit affects the employee's legal residency status.

What are payroll and tax obligations in Vietnam?

Employers in Vietnam are required to withhold and remit personal income tax (PIT), social insurance, health insurance, and unemployment insurance for every employee on the payroll. The total employer contribution is 23.5% of the employee's gross salary, broken down as follows.

Consolidated employer and employee contribution table

Worked Cost Example in VND

Here is what hiring one employee at a 20,000,000 VND/month gross salary costs the employer in Vietnam (local employee, Region I).

The employee's take-home pay after their 10.5% deductions (8% SI + 1.5% HI + 1% UI) and PIT withholding will be lower than the 20,000,000 VND gross.

Book a demo to see how Skuad handles payroll, tax, and insurance filings in Vietnam.

How does an EOR compare to setting up your own entity in Vietnam?

An EOR lets you hire in Vietnam within days by using its existing licensed entity, while setting up your own entity requires company registration, capital commitments, and ongoing local administration. Here is how the two options compare:

What is the difference between EOR and PEO in Vietnam?

A professional employer organization (PEO) in Vietnam is a co-employment arrangement, while an EOR is the sole legal employer. The distinction matters because it determines who carries statutory liability for payroll, insurance, and labor law compliance.

How do you choose an EOR in Vietnam?

The right EOR for Vietnam should have its own licensed entity in the country (not a subcontracted arrangement), handle the full scope of statutory obligations under the 2019 Labor Code, and provide transparent pricing.

Key factors to evaluate:

• Own entity vs. partner network: An EOR with its own registered Vietnamese entity has direct control over compliance. Providers using third-party partners add a layer of risk and slower response times.
• Scope of services: Confirm whether the provider covers work permits, DOLISA filings, ILR registration, and termination support, or only payroll and contracts.
• Pricing structure: Some providers charge a flat per-employee fee; others layer on setup fees, currency conversion markups, or hidden admin charges. Skuad starts at $199/month per employee with no setup fees.
• Onboarding speed: Most EOR providers can onboard an employee in Vietnam within 5 to 14 business days.
• Multi-country support: If you're hiring across Southeast Asia, look for a provider that covers the full region from a single platform.

Why use Skuad's EOR in Vietnam?

Skuad acts as the legal employer in Vietnam through its own licensed entity. Your company retains operational control over your team while Skuad handles the compliance, payroll, and statutory filing requirements that Vietnamese law assigns to the employer of record.

Here is what Skuad covers:

• Employment contract generation across 160+ countries, aligned with local labor laws and statutory requirements
• Statutory contribution workflows across supported markets, covering social insurance (17.5%), health insurance (3%), unemployment insurance (1%), and trade union fees (2%)
• Payroll processing in 70+ currencies with automated PIT withholding and statutory deductions
• Work permit and visa support for foreign nationals, including DOLISA filing
• Termination and offboarding support aligned with statutory notice periods and severance requirements
• Background verification covering identity, employment history, and criminal records before onboarding

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

How do you incorporate a company in Vietnam?

Incorporating a company in Vietnam requires compliance with both the Enterprise Law and the Investment Law. Foreign-owned businesses must obtain an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC) before they can begin hiring or operating.

The registration process involves submitting incorporation documents and a feasibility study to the Provincial People's Committee or the Industrial and Export Processing Zones Management Authority. The timeline is typically 2 to 3 months, and charter capital requirements vary by industry.

For companies that want to register a company in Vietnam, working with a local legal specialist is recommended to navigate the Investment Law requirements for foreign entities