Employer of Record in Vietnam

Employment Laws and Regulations in Vietnam

Employment Contracts

Employment relationships in Vietnam are governed primarily by the Labour Code 2019 (Code No. 45/2019/QH14), enacted on 20 November 2019 and effective from 1 January 2021. The Labour Code applies to all private-sector employment and is supplemented by the Social Insurance Law 2024 (Law 41/2024/QH15, effective 1 July 2025) and the Personal Income Tax Law 2025 (Law 109/2025/QH15, effective 1 July 2026). Under Article 20, labour contracts must be concluded as either indefinite-term contracts or definite-term contracts of 12 to 36 months; the previous “seasonal or task-based contract under 12 months” category was removed by the 2019 Code. A written contract is mandatory for any work relationship of at least one month, and must specify the job, workplace, working hours, wages, form of payment, probation period, and training obligations under Article 21. The contract must be written in Vietnamese, with a parallel foreign-language version permitted for foreign employees. The Ministry of Labour, Invalids and Social Affairs (MOLISA) supervises compliance, while local labour inspectorates under each Provincial People’s Committee handle enforcement.

Working Hours and Overtime

The standard working week in Vietnam is 48 hours across six days or 40 hours across five days, set by Article 105 of the Labour Code, with a daily cap of 8 hours for normal work. Employees are entitled to a minimum 30-minute rest break for shifts of 6 hours or more (45 minutes for night shifts) under Article 109, and at least one full day of weekly rest (usually Sunday) under Article 111. Overtime is any work beyond standard daily or weekly hours and is strictly capped at 40 hours per month and 200 hours per year, extended to 300 hours per year only in specified sectors such as textile, leather, seafood processing, and electronics manufacturing under Article 107 and Decree 145/2020/NĐ-CP. Managerial employees defined as senior executives under Article 3 may be exempted from overtime compensation by the labour contract. Overtime rates are governed by Article 98 of the Labour Code, and non-payment of overtime is a common source of labour disputes in Vietnam.

Employees cannot be compelled to work overtime beyond 40 hours per month, and written employee consent is required for any overtime arrangement under Article 107. Overtime compensation is calculated on the contractual hourly wage, including fixed allowances but excluding occasional bonuses and benefits in kind. Companies in the 300-hour per-year sectors must notify the Department of Labour, Invalids and Social Affairs within 15 days of organising the additional overtime.

Minimum Wage

Vietnam applies a four-region monthly minimum wage set by government decree. Under Decree 293/2025/NĐ-CP, effective 1 January 2026, the regional rates increased by approximately 7.2% compared with the July 2024 levels set by Decree 74/2024/NĐ-CP. Region I covers the urban districts of Hanoi and Ho Chi Minh City and industrial parks in Dong Nai, Binh Duong, and Ba Ria-Vung Tau; Region II covers the rural districts of those major cities and the urban areas of Can Tho, Da Nang, and Hai Phong; Region III covers most remaining urban districts and industrial zones; and Region IV covers all other localities. The regional rates for 2026 are:

• Region I: VND 5,310,000 per month or VND 25,500 per hour
• Region II: VND 4,730,000 per month or VND 22,700 per hour
• Region III: VND 4,140,000 per month or VND 19,900 per hour
• Region IV: VND 3,700,000 per month or VND 17,800 per hour

Employers must pay at least 7% above the regional minimum wage for employees in occupations requiring vocational training or higher under Clause 3 of the decree, a de facto floor for most clerical, technical, and skilled roles. The minimum wage is reviewed annually by the National Wage Council, with adjustments usually effective 1 January or 1 July.

Probation Period

Probation is governed by Articles 24 to 27 of the Labour Code. The maximum probation length depends on the role: up to 180 days for enterprise managers (senior executives under the Enterprise Law), up to 60 days for positions requiring a college degree or higher, up to 30 days for positions requiring intermediate or vocational training, and no more than 6 working days for other positions. Probation wages must be at least 85% of the agreed job wage. Only one probation period per role is permitted, and either party can terminate the probation without notice or compensation. On successful completion the employer must conclude the full labour contract; continuing employment without a signed contract converts the relationship into the contract type originally agreed. Social insurance contributions are generally not required during probation if the probation agreement is separate from the labour contract, but apply from the first day of the main contract.

Leave Entitlements

Vietnam’s statutory leave framework combines paid annual leave funded by the employer with sickness, maternity, and paternity benefits funded by the Social Insurance Fund administered by Vietnam Social Security. Eligibility for sickness, maternity, and paternity benefits requires compulsory social insurance contributions, with specific minimum-contribution thresholds for each benefit type. The following sections break down each leave category before summarising the full entitlement schedule.

Annual Leave

Under Article 113 of the Labour Code, employees with at least 12 months of service are entitled to 12 working days of paid annual leave per year. Employees engaged in heavy, hazardous, or dangerous work, employees with disabilities, and employees under 18 receive 14 working days; employees in especially heavy, hazardous, or dangerous work receive 16 working days. Annual leave increases by one day for every five years of continuous service with the same employer under Article 114. Employees with less than 12 months of service accrue leave proportional to months worked. Unused leave is compensated in cash on termination but in principle cannot be cashed out during ongoing employment. Leave accrues from the first day of the labour contract, including during probation.

Sick Leave

Sick leave is paid by the Social Insurance Fund under the Social Insurance Law 2024 (Law 41/2024/QH15, effective 1 July 2025). The annual sickness benefit entitlement depends on the employee’s total social insurance contribution history and working conditions. Under the new law, employees with less than 15 years of contributions are entitled to 30 days per year in ordinary occupations (40 days in heavy or hazardous work); 15 to 30 years of contributions entitle 40 days (50 in hazardous work); over 30 years of contributions entitle 60 days (70 in hazardous work). The benefit is paid at 75% of the salary that social insurance contributions were based on during the preceding month, direct from the Social Insurance Fund. A valid medical certificate from a licensed Vietnamese health facility is required to claim the benefit.

Maternity Leave

Female employees who have paid social insurance contributions for at least 6 months in the 12 months before giving birth are entitled to 6 months of paid maternity leave under Article 139 of the Labour Code and the Social Insurance Law. The 6-month entitlement may be split into a prenatal portion not exceeding 2 months and a postnatal portion filling the remainder. For multiple births, an additional month of leave is added for each child from the second onward. The benefit is 100% of the average monthly salary on which social insurance was paid in the 6 months preceding leave, paid directly by Vietnam Social Security up to the contribution ceiling of 20 times the reference salary. Employees retain their job during maternity leave and cannot be dismissed on grounds related to pregnancy or maternity under Article 137.

Paternity Leave

Male employees whose spouse gives birth are entitled to paid paternity leave from the Social Insurance Fund: 5 working days for a natural single birth, 7 working days for a birth by caesarean section or before 32 weeks of gestation, 10 working days for twins born naturally (with 3 additional working days for each further child), and up to 14 working days for twins or more delivered by caesarean section. The leave must be taken within 30 days of the birth and is paid at 100% of the average monthly contribution salary over the preceding 6 months.

Other Statutory Leave

The Labour Code and Social Insurance Law provide additional paid leave for significant personal events and caregiving responsibilities:

• Marriage leave: 3 working days for the employee’s own marriage, 1 working day for a child’s marriage, under Article 115.
• Bereavement leave: 3 working days on the death of a biological or adoptive parent, spouse, or child; 1 working day on the death of a grandparent, sibling, or parent-in-law.
• Sick-child care leave: paid from the Social Insurance Fund, up to 20 days per year if the child is under 3, and 15 days per year if the child is aged 3 to under 7, per parent.
• Unpaid personal leave: granted by mutual agreement with the employer.
• Trade union leave: time off for officially appointed union representatives under Article 176.

The summary table below pulls together every statutory leave entitlement under the 2019 Labour Code and the 2024 Social Insurance Law, with duration, pay rate, and funding source. The most important takeaway for employers is that all major long-leave categories (sickness, maternity, paternity, child-care) are funded by the Social Insurance Fund, not the employer, provided the employee has the required minimum contribution history.

Statutory Employee Benefits

Beyond leave and base pay, Vietnamese employers must provide a defined package of statutory benefits funded through mandatory social contributions to Vietnam Social Security and the trade union system. The core benefits are as follows:

• Social insurance (Bảo hiểm xã hội): a consolidated social security scheme covering retirement pensions, survivorship, sickness and maternity benefits, and occupational accident and disease insurance. Employers contribute 17.5% of contribution salary, employees contribute 8%, with the contribution ceiling set at 20 times the reference salary of VND 2,340,000 (ceiling of VND 46,800,000 per month) under Decree 73/2024/NĐ-CP.
• Health insurance (Bảo hiểm y tế): universal health coverage under the Health Insurance Law. Employer contribution is 3% and employee contribution is 1.5% of contribution salary, capped at the same 20-times reference-salary ceiling. Covers primary care, hospital treatment, and partial drug reimbursement at registered public and private facilities.
• Unemployment insurance (Bảo hiểm thất nghiệp): provides income support to redundant workers for up to 12 months. Employer contribution is 1% and employee contribution is 1% of contribution salary, capped at 20 times the regional minimum wage.
• Trade union fee (Phí công đoàn): employers pay 2% of the total salary base used for social insurance to the Vietnam General Confederation of Labour under Decree 191/2013/NĐ-CP, regardless of whether the employees have formed a workplace union. Union-member employees contribute membership dues of 1% of contribution salary, capped.
• Occupational accident and disease insurance: included within the 17.5% employer social insurance rate at a default 0.5%, with the option to apply a reduced 0.3% rate for low-risk enterprises that meet the conditions in Decree 58/2020/NĐ-CP.

The individual rates feed directly into the Employer Contributions and Employee Contributions tables in H2 4 below, which give the full breakdown. Employers must remit contributions by the last day of the month following the payroll month and report discrepancies to Vietnam Social Security within 30 days.

Recent Regulatory Updates (2026)

Vietnam introduced several major employment-law changes effective in 2025 and 2026. The Decree 74/2024/NĐ-CP (1 July 2024) raised regional minimum wages by 6% across the four regions, and Decree 293/2025/NĐ-CP (1 January 2026) followed with a further 7.2% increase, taking Region I to VND 5,310,000 per month. Decree 73/2024/NĐ-CP raised the reference salary (lương cơ sở) from VND 1,800,000 to VND 2,340,000 effective 1 July 2024, lifting both social insurance contribution ceilings and the maternity benefit cap.

The Social Insurance Law 2024 (Law 41/2024/QH15), effective 1 July 2025, reduced the minimum contribution period for a pension from 20 to 15 years, expanded sickness benefit entitlements, opened voluntary participation in occupational accident and disease insurance, and restructured sickness-benefit funding tiers. The Personal Income Tax Law 2025 (Law 109/2025/QH15), effective for income earned from 1 July 2026, collapses the seven-bracket progressive schedule to five brackets, raises the top-rate threshold to VND 100,000,000 per month, and increases the personal deduction to VND 15,500,000 and the dependent deduction to VND 6,200,000 per month.

For foreign workers, Decree 219/2025/NĐ-CP, effective 7 August 2025, consolidated the previous two-step work permit procedure into a single 10-working-day approval, decentralised authority to the Provincial People’s Committees, and expanded work-permit exemption categories for intra-company transfers and short-term experts.

Work Permits and Visas in Vietnam

Work Permit Requirements

Who Needs a Work Permit

All foreign nationals working in Vietnam for more than 30 cumulative days in a 12-month period require a work permit (giấy phép lao động) issued under Decree 152/2020/NĐ-CP and amended by Decree 219/2025/NĐ-CP. Citizens of every country are in principle subject to the work permit rule; bilateral agreements do not exempt nationals of any major economy. Certain categories are exempted from the work permit but must still obtain a written confirmation of exemption from the Department of Labour, Invalids and Social Affairs. Exempt categories include members of the board of directors of shareholding companies, capital contributors of limited liability companies, heads of representative offices, intra-company transferees within 11 WTO services sectors who have worked for the parent company for at least 12 months, and foreign experts on assignments shorter than 30 days with no more than 90 cumulative days per year.

Eligibility and Required Documents

Eligibility requires the worker to be at least 18 years old, in good health, free of criminal record, and to hold one of the following qualifications: a university degree in a relevant field plus at least 3 years of experience, a technical training certificate plus at least 3 years of experience in the specialty, or at least 5 years of experience at manager or executive level. Required documents include a valid passport, a criminal record certificate issued within the previous 6 months, a medical examination certificate issued within 12 months, documents evidencing qualifications and experience, two passport photos, the labour contract or appointment letter, and a letter from the Vietnamese employer requesting the work permit. Documents issued abroad must be notarised, consular-legalised, and translated into Vietnamese.

Processing Time and Validity

Under Decree 219/2025/NĐ-CP, the standard processing time is 10 working days from submission of a complete application at the Provincial People’s Committee, replacing the previous two-step approval that took up to 25 working days. The work permit is issued for a maximum of 2 years, matching the underlying labour contract. Delays are common where consular legalisation of foreign documents has not been completed, where the employer has not filed the 30-day foreign-labour-demand report required by Article 4 of the decree, or where the position requires a specific qualifications review.

Renewal Process

A work permit may be renewed once only, for an additional 2 years. The renewal application must be submitted at least 5 working days and no more than 45 days before the current permit expires. Renewal requires an updated medical certificate, proof of continued employment, and, for intra-company transfers, proof of ongoing assignment from the parent company. The employee may continue working during the 5-day processing window if the renewal was filed on time; otherwise, a new labour contract and a first-issue work permit are required once the existing permit lapses.

Common Visa Types for Foreign Workers

Vietnam issues multiple entry and residence categories for foreign workers, classified by purpose under the Law on Foreigners’ Entry, Exit, Transit, and Residence (Law No. 47/2014/QH13, as amended). The Vietnam Immigration Department within the Ministry of Public Security is the issuing authority, while the Provincial People’s Committee issues the underlying work permit or exemption confirmation. The EOR can sponsor all employment-linked visas on behalf of the employer. The table below summarises the main categories relevant to foreign hires.

Other Vietnamese visa categories that do not permit employment include the e-visa (up to 90 days, multiple entries, for tourism or short business visits), the DL tourist visa, the TT family-reunion visa for spouses and children of Vietnamese citizens, and the DH student visa. As of April 2026, Vietnam has not introduced a dedicated digital-nomad visa, although a proposed long-term “Golden Visa” for investors and highly skilled professionals has been announced by the Ministry of Public Security for consideration.

How an EOR Handles Work Permits

An employer of record in Vietnam sponsors the work permit as the legal employer of record. The EOR files the mandatory 30-day foreign-labour-demand report with the Provincial People’s Committee, prepares and submits the work permit dossier, and coordinates with the Vietnam Immigration Department for the LĐ2 visa and Temporary Residence Card. For intra-company transferees, the EOR files the work-permit-exemption confirmation and the LĐ1 visa application. The client provides the candidate’s documentation and funds a modest agency disbursement; the EOR absorbs the administrative burden and remains the compliance counterparty with Vietnamese authorities. As noted in H3 1.4 above, the work permit extends the onboarding timeline by two to four weeks, and an additional one to two weeks if documents must be authenticated through Vietnamese consular channels abroad.

Payroll, Taxes, and Social Security in Vietnam

Employer Contributions

Vietnamese employers are responsible for five mandatory contributions on behalf of each Vietnamese-national employee: social insurance, health insurance, unemployment insurance, occupational accident and disease insurance (included in the social insurance rate), and the trade union fee. Contributions are calculated on the contractual salary up to the contribution ceiling of 20 times the reference salary of VND 2,340,000 per month (VND 46,800,000 for social insurance and health insurance) or 20 times the regional minimum wage for unemployment insurance. Foreign employees on labour contracts of at least one year are subject to the same contributions except unemployment insurance, which does not apply.

Employee Contributions

Employees have three mandatory social contribution withholdings from gross pay, before personal income tax. The rates are fixed under the Social Insurance Law, the Health Insurance Law, and the Employment Law, and apply to Vietnamese nationals. Foreign nationals on labour contracts of at least one year contribute 8% for social insurance and 1.5% for health insurance, but are not required to contribute to unemployment insurance. The contribution ceilings mirror those on the employer side.

Income Tax

Personal income tax (thuế thu nhập cá nhân, or PIT) is levied on resident employees on worldwide income and on non-residents on Vietnam-sourced employment income. The current progressive schedule for employment income of resident individuals was reformed by the Personal Income Tax Law 2025 (Law 109/2025/QH15), which collapses the seven-bracket schedule to five brackets effective from the 2026 tax year. Residents deduct a personal allowance of VND 15,500,000 per month and VND 6,200,000 per month for each qualifying dependent before applying the progressive rates. Non-residents are taxed at a flat 20% on Vietnam-sourced employment income.

Payroll Cycle

Vietnamese payroll runs monthly, with salaries normally paid on the last working day or the 5th of the following month in cash transfer to the employee’s Vietnamese bank account. Payment in foreign currency is permitted only to non-residents and certain foreign expatriates; all resident-employee payroll must be in Vietnamese dong. Employers must provide a monthly pay slip in Vietnamese showing gross pay, each deduction, personal income tax withheld, and net pay. Monthly social insurance contributions are remitted to Vietnam Social Security by the last day of the month following the payroll period, together with the C012 contribution return. Personal income tax withholdings are remitted to the General Department of Taxation by the 20th of the following month under the quarterly or monthly filing option. Annual personal income tax finalisation is filed by the 31 March following the tax year either by the employer on behalf of qualifying employees or by the employee directly.

13th Month Salary and Bonus Pay

Vietnam does not legally mandate a 13th-month salary or Tet bonus under the Labour Code. However, a Lunar New Year bonus (thưởng Tết) is almost universal and is strongly expected by employees as part of normal compensation. Many employment contracts, internal labour regulations, or collective bargaining agreements specify a 13th-month payment equal to one month of salary or a performance-linked Tet bonus. Where such a payment is committed in the labour contract, company policy, or collective agreement, it becomes a legally enforceable obligation under Article 104 of the Labour Code and can be recovered as unpaid wages in a labour dispute. Tet bonuses are included in the personal income tax base for the month of payment and attract the same social insurance treatment as ordinary salary if they form part of the contractual wage.

Cost of Hiring Through an EOR in Vietnam

EOR Service Fees

Remote People’s EOR service fee for Vietnam typically sits between USD 300 and USD 600 per employee per month, depending on headcount, role complexity, and whether the employee is a Vietnamese national or a foreign hire requiring work-permit sponsorship. The fee covers the employment contract, Vietnam Social Security enrolment, monthly payroll processing, personal income tax withholding, pay slip generation in Vietnamese, annual tax finalisation, statutory reporting, and front-line HR support for the employee. Work-permit sponsorship for foreign nationals is usually billed as a one-time setup fee on top of the monthly service fee, reflecting the Provincial People’s Committee filing fees and the cost of document legalisation.

Total Employment Cost Breakdown

The table below illustrates the total monthly employer cost for a Vietnamese-national software engineer on a gross salary equivalent to USD 2,500 per month. The breakdown uses the 2026 statutory rates for social insurance, health insurance, unemployment insurance, and the trade union fee. Foreign-national employees save the 1% unemployment insurance line, reducing the total employer loading to approximately 22.5%.

Figures converted at 1 USD ≈ VND 25,400 as of April 2026. Unemployment insurance, health insurance, and social insurance are capped at 20 times the reference salary (VND 46,800,000 per month for SI/HI, 20 times regional minimum wage for UI); salaries above the cap attract contributions only up to the ceiling.

Ready to hire in Vietnam? Get started with Remote People. We handle labour contracts, payroll, personal income tax withholding, Vietnam Social Security enrolment, and full Vietnam compliance. No local entity needed. Contact us to start onboarding your Vietnam team.

Benefits of Using an EOR in Vietnam

An employer of record collapses the entity-setup and compliance workload into a short contracting process, letting your team focus on hiring and managing the employee rather than Vietnamese tax and labour administration. The principal benefits are:

• Speed to market in Vietnam: compliant Vietnamese hires are live in one to two weeks, compared with three to six months typically needed to incorporate a limited liability company, open a Vietnamese bank account, and register with Vietnam Social Security and the tax authority.
• Full compliance with the 2019 Labour Code: the EOR absorbs the risk of non-compliance with Articles 98 (overtime), 113 (annual leave), 139 (maternity leave), and 46 (severance), as well as Vietnam Social Security and personal income tax filing, protecting your brand from labour disputes and fines.
• No local entity overhead: avoid the minimum charter capital, registration fees, statutory auditor, tax agent, and ongoing secretarial cost of running a Vietnam enterprise. The EOR service fee covers what a standalone Vietnam team would otherwise spend on in-house payroll, tax, and HR staff.
• Local HR and legal expertise: Vietnamese labour and social insurance law is complex and reform-prone (three major acts changed between 2024 and 2026). An EOR operates in Vietnamese and stays current on Decree 219/2025, Law 41/2024, and Law 109/2025, so your team does not need to build that expertise in-house.
• Flexibility to scale up or down: headcount can rise or fall without triggering entity-level restructuring. Employees can be terminated within the Labour Code framework (notice plus severance) rather than through a Ministry of Planning and Investment dissolution.
• Misclassification and litigation risk mitigation: hiring a Vietnamese worker directly as a contractor from abroad is a common misclassification trap; the EOR puts the worker on a proper Vietnamese labour contract, eliminating the risk of back-dated Vietnam Social Security contributions and personal income tax liability.
• Employee experience: the employee gets a Vietnamese labour contract, local pay slip, Vietnam Social Security coverage, access to health insurance at registered facilities, and unemployment protection, which is a materially better offer than a cross-border contractor agreement with no statutory protections.

Ready to hire Vietnam’s world-class talent? Remote People combines an EOR service with recruitment, payroll outsourcing, and benefits administration for Vietnam. Get in touch to discuss your Vietnam hiring plan.

Termination and Offboarding in Vietnam

Notice Periods

Notice requirements under Article 35 of the Labour Code apply to both employer-initiated and employee-initiated termination of labour contracts (except in the limited circumstances of Article 36, just-cause termination). Notice periods differ by contract type and cannot be shortened by agreement; they can be lengthened by contract or by collective agreement. Payment in lieu of notice is permitted by mutual consent but is not a unilateral right. Notice is counted in calendar days, except for contracts of under 12 months where it is counted in working days.

Exceptions to the notice requirement include just-cause dismissal under Article 36 (gross misconduct, theft, assault, sexual harassment, five-day unauthorised absence in 30 days, etc.), mutual agreement, and force majeure events such as natural disasters that permanently prevent performance. The employer must issue a written termination decision and pay all outstanding wages, annual leave encashment, and severance within 14 working days of the termination date under Article 48.

Severance Pay

Severance pay (trợ cấp thôi việc) is governed by Article 46 of the Labour Code and applies to employees with at least 12 months of service whose labour contract is terminated lawfully for reasons other than employee misconduct. The formula is simple: half a month’s salary for each year of service, calculated on the average contractual salary of the six months preceding termination. Years during which the employee received unemployment insurance contributions do not count toward the severance calculation; in practice, this means post-2009 service years are typically excluded because unemployment insurance has been mandatory since 1 January 2009, and the employee receives unemployment benefits directly from Vietnam Social Security instead.

Calculation Method

The severance formula under Article 46 is: half a month of average contractual salary multiplied by each year of qualifying service. Years are counted in completed full years, with partial years of six months or more rounded up to a half year and partial years under six months rounded down. The base salary for the calculation is the average of the contractual wage (basic wage, job allowances, and other fixed-wage allowances, but excluding bonuses and benefits in kind) over the six months immediately preceding the termination date. Refer to Table 13 above for worked examples at 1, 3, 5, and 10 years of service.

Caps and Exceptions

Severance under Article 46 does not apply when the employee is dismissed for just cause under Article 36, when the employee resigns without the required notice, when the employee is on a fixed-term contract that ends naturally, or when the employment is terminated because the employee reaches statutory retirement age under Article 169. Redundancy pay under Article 47 is separate and applies to structural-change terminations; it is calculated at one month of average salary per year of service with a minimum of two months. There is no absolute cap in VND amount, but in practice the 20-times-reference-salary ceiling on the base salary for severance calculation (VND 46,800,000 per month) operates as a de facto upper limit. Severance payments are tax-deductible for the employer and tax-exempt for the employee up to the statutory entitlement.

Grounds for Termination

The Labour Code 2019 distinguishes between termination for just cause (Article 36), termination on notice (Article 35), termination by mutual agreement (Article 34), and statutory events such as death, retirement, or expiry of a fixed-term contract. Just-cause grounds include the employee’s gross misconduct at work, theft, assault, sexual harassment, illegal drug use, leaking company secrets, or unauthorised absence for five working days in 30 days or 20 working days in 365 days. Protected categories include pregnant employees, employees on maternity leave, employees raising a child under 12 months, trade-union officials in the course of their duties, and employees on sick leave. Termination of a protected category requires the prior consent of the competent trade union or local labour authority, and in some cases is entirely prohibited for the duration of the protection period.

EOR vs. Other Hiring Models in Vietnam

EOR vs. Setting Up a Local Entity

Establishing a Vietnamese limited liability company or joint-stock company is the standard route for committed in-country investment, but it carries substantial upfront and ongoing overhead. The EOR route sidesteps the minimum charter capital requirement, the foreign investment registration certificate procedure, the Ministry of Planning and Investment filings, and the obligation to maintain a Vietnamese statutory auditor and tax agent. The table below summarises the key trade-offs.

The break-even point between EOR and entity typically arrives between 15 and 25 Vietnamese hires, at which point the fixed cost of in-house payroll, legal, and finance staff falls below the aggregate EOR fee. Businesses that plan significant fixed-asset investment, need to hold Vietnamese import licences, or intend to bid for government contracts should incorporate regardless of headcount. For everyone else, the EOR model is usually the faster and cheaper route, particularly during the first two years of Vietnam operations.

EOR vs. Hiring Independent Contractors

Engaging a Vietnamese worker as an independent contractor under a civil-law service contract is a common tactic for cross-border hiring, but it carries significant misclassification risk. Vietnamese tax and labour authorities apply a substantive test: if the worker takes direction, uses the company’s tools, works fixed hours, and has an ongoing relationship rather than a defined-deliverable engagement, they are likely an employee in fact regardless of the contract label. Misclassification exposes the company to back-dated Vietnam Social Security contributions, personal income tax under-withholding, penalties under Article 17 of Decree 12/2022, and the risk of a retrospective employment finding by the labour court.

The independent-contractor model is only appropriate in some cases, such as bounded-scope specialist engagements where the worker has genuine autonomy, owns their tools, sets their own schedule, and serves multiple clients. For ongoing roles that look and function like employment, the EOR route removes the misclassification exposure while giving the worker full statutory protection, a contribution record with Vietnam Social Security, and access to health insurance. Remote People also operates a Vietnam contractor management solution for legitimate contractor engagements, covering KYC, invoicing, and cross-border payments.

EOR vs. PEO (Professional Employer Organization)

Vietnam does not have a dedicated legal framework for Professional Employer Organisations as defined in the United States. Instead, the Labour Code recognises labour outsourcing (cho thuê lại lao động) under Chapter XII (Articles 52 to 57) and Decree 145/2020/NĐ-CP, a related but distinct arrangement where a licensed labour outsourcing company seconds its employees to a client for a defined period in specified industries. The labour outsourcing model is narrower than a PEO and is strictly regulated. The closest practical equivalent to a PEO in Vietnam is a co-employment or shared-services arrangement with a local partner, which only applies if you already have a Vietnamese entity.

In practice, most foreign companies entering Vietnam choose an EOR until they have 15 or more local hires, at which point they incorporate and may transition to in-house payroll or a local PEO-style arrangement. The key regulatory difference in Vietnam is that true EOR (the provider is the legal employer) is available only through a licensed labour outsourcing company or through a Vietnam-registered entity operating as a service provider; Remote People operates via a compliant Vietnam partner structure that matches the EOR model in function if not in the narrow statutory sense of labour outsourcing under Articles 52 to 57.

Public Holidays in Vietnam

Vietnam recognises 11 statutory public holidays per year under Article 112 of the Labour Code, with additional observances and compensatory days declared annually by Prime Ministerial decision. The Lunar New Year (Tet) is the longest holiday, typically 5 days plus weekend and compensatory days, and traditionally triggers the Tet bonus payment. Dates of lunar-calendar holidays shift each year. The calendar below shows the Gregorian dates for 2026 based on the official Prime Ministerial Decision.

Employees working on any of the 11 holidays above are entitled to holiday-day base wage plus an additional 300% premium under Article 98, making holiday scheduling particularly expensive for employers. The government usually announces compensatory working-day swaps (dịch lịch) in November of the preceding year, extending Tet and the April-May window into longer consecutive breaks; factor these swaps into your Vietnam payroll calendar.

How to Get Started with an EOR in Vietnam

Launching your first Vietnamese hire through an employer of record is a structured, front-loaded process that moves quickly once the core agreements are signed. The five steps below describe the typical journey with Remote People.

• First, define the role and compensation: finalise the job title, base salary in VND or USD, location (for regional minimum wage purposes), start date, and contract term. Review benefits expectations, including any 13th-month or Tet bonus, and set the probation length within the Article 25 caps.
• Second, sign the Remote People service agreement: review the EOR service terms, pricing, and scope. Provide the candidate’s passport, Vietnamese national identity card (CCCD) for locals or passport for foreign hires, proposed salary, start date, and any additional benefit elections.
• Third, let the EOR run the compliance work: Remote People drafts a Labour Code-compliant bilingual labour contract, files the Vietnam Social Security enrolment, collects the tax identification number, and runs any required work-permit application for foreign nationals. You review and counter-sign the contract.
• Fourth, prepare for day one: Remote People onboards the employee into payroll, activates social insurance and health insurance, issues local payslips, and provides the employee an in-country HR contact. You lead functional onboarding, tooling, and the first-week manager 1:1s.
• Fifth, run ongoing payroll and compliance: Remote People processes monthly payroll, remits personal income tax and social insurance contributions, provides the monthly contribution receipts, tracks annual leave and sickness, and handles the annual personal income tax finalisation on behalf of the employee.

Ready to start hiring in Vietnam? Our team can onboard your first employee in Hanoi, Ho Chi Minh City, or any of Vietnam’s 63 provinces within one to two weeks. Get in touch to discuss your Vietnam hiring plan and request pricing.

Where companies hiring in Vietnam expand next

Teams hiring in Vietnam typically expand across ASEAN, where cross-border mobility and diverse multilingual talent make regional coverage natural. Most teams start with an EOR partner in Thailand — overlapping ASEAN labor and mobility rules. Malaysia typically follows, with ASEAN-wide talent flows and shared hiring norms. A team in Singapore is a natural addition for ASEAN integration and cross-border mobility, and operations in Indonesia completes the regional picture with the ASEAN single-market trade framework.