Vietnam is one of the most popular countries to find top digital nomads and independent contract workers. That’s because, in Vietnam, the population is young, (median age of 33 years) with more than 1 million young adults kickstarting their employment journey every year. 

Moreover, the Vietnamese government has recently invested heavily in STEM education. In the last months of 2024, the Vietnamese Government also signed off on various strategies to develop training, science and technology by 2030 but with a vision to 2045. With these moves, the government plans to increase the quality of skills and education among young people, driving the country’s transformative growth over the next few decades. 

Independent workers in Vietnam are also quite affordable, making them a top choice for many companies. The average salary of a software engineer is around ₫23,800,000 per month or US $949. However, a similar professional in the USA earns around $12,293 per month. 

A significant number of independent contractors in Vietnam can also speak English, making communication and collaboration with clients as smooth as possible. 

So, your decision to hire independent contractors in Vietnam is a wise one. However, you will have to navigate through the country’s laws to ensure the correct classification of these professionals. 

Want to know details? Read this guide to learn everything about hiring and paying independent contractors in Vietnam. 

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What Are Independent Contractors in Vietnam?

An independent contractor working in Vietnam is a professional individual or business entity that offers its services without forming any sort of employment relationship. This implies that an independent contractor works on a project basis that may run for one month or even a year. 

They are hired through a service agreement that mentions the scope of work, their project fee and other relevant clauses related to their work.

Independent contractors have their own tools and equipment. They also have the flexibility to create their own work methods and schedules. 

When it comes to autonomy, independent contractors have significant control over the work they perform. Unlike a traditional employee, an independent contractor isn’t directly supervised by an employer. 

Similarly, an independent contractor doesn’t get any statutory rights and benefits like an employee gets. These may include health insurance, paid leaves and a minimum wage. 

Here are some key points about independent contractors in Vietnam to keep in mind. 

  • No employment contract: Independent contractors do not have a formal employment contract. Instead, they are bound by a service contract. 
  • Self-employed status: These professionals are considered self-employed. This makes them responsible for their own social insurance contributions and taxes. 
  • Greater autonomy: Independent contractors have a lot of control over their work methods, schedules, equipment and tools. 
  • Limited benefits: Independent contractors are not entitled to benefits such as paid vacation, sick leave, or minimum wage. They only get the benefits mentioned on their contracts. 

Differences Between Independent Contractors and Employees in Vietnam

One of the biggest challenges of hiring in Vietnam is to understand how Vietnamese law makes a clear distinction between an employee and an independent contractor. 

The new Vietnamese Labor Code clearly defines an employee. According to the law, an employee is an individual who works:

  • Under a contractual agreement (or a labor contract) with the employer
  • Under an employer’s supervision or control
  • For a regular monthly salary 

If an employment contract specifically mentions that an individual works under an employer and gets a salary for that, then that worker is categorized as an employee. 

However, if a worker doesn’t meet the conditions above, they are considered a contractor or a freelancer. This means that they are bound by a labor employment contract and have all the freedom to work on their own terms. 

Additionally, unlike employees, independent contractors are not protected by statutory employment rights under Vietnamese law. They don’t receive any benefits. 

Plus, they are responsible for their tax filing and returns themselves. Their employer doesn’t file it for them. 

What Happens When You Misclassify an Independent Contractor?

Although Vietnam’s labor laws are quite relaxed, you still have to avoid misclassification of your workers. It is unlawful to classify employees as independent contractors or vice versa. 

The local governing authority is responsible for determining the classification of an employee or an independent contractor based on their treatment in the company. 

They achieve this by evaluating factors like the control of the employer over the worker,  any benefits received, overtime wages, vacation and medical leave, health insurance, and even the place of work. 

According to Vietnamese law, it is necessary to provide a contract to all employees. However, for independent contractors, it is only considered as a best practice. 

If a contractor is found to be misclassified as an employee, your company may face some serious consequences, such as fines, legal disputes or penalties.

In addition, you could also be a victim of intellectual property (IP) protection issues. A misclassification can lead to costly litigation that may eventually drain your resources. 

Therefore, to keep yourself safe, ensure you understand the law properly before making the classification correctly. 

How to Choose an Independent Contractor in Vietnam?

Here are some of the essential things you must do to make your search for an independent contractor as easy and successful as possible.

Have a Proper Understanding of the Vietnamese Laws

Make sure that you understand the distinction between an employee and an independent contractor, as explained in the labor law. It is imperative to treat each correctly and avoid fines that can harm your reputation. If you can’t understand the laws, get help from an expert. 

Define Your Project’s Requirements 

You must clearly evaluate the outline of your project’s tasks, deadlines and deliverables to understand the skills you demand from an independent contractor. For instance, if your project is a basic one with a convenient timeline, you may prefer hiring a junior independent contractor rather than a senior one. The scope of work can also help you establish the contractor’s charges that you are willing to pay. 

Utilize Online Platforms 

To find a skilled independent contractor, utilize various online platforms before shortlisting the best ones. You can explore platforms like Upwork, Guru, or local Vietnamese job boards to access a pool of potential contractors. LinkedIn is also a great avenue for finding gems. 

Ask for References

It is always a great idea to choose independent contractors who have already worked with companies in the same industry as yours. You can ask these ventures to recommend reliable contractors to you so you can work with them as well. 

Check Portfolios and Conduct Interviews

Don’t seal a deal with a contractor without going through their portfolios. You must always evaluate the candidates based on their past work samples and relevant experience. Also, take the relevant client testimonials into account. 

Make sure that you arrange detailed interviews with candidates before taking them on board. Engage them in detailed conversations to analyze their approach to technical skills and communication style. 

Make sure to pick candidates who can seamlessly communicate in English or Vietnamese for better collaboration. 

Vietnamese Labor Laws for Classification of Independent Contractors

In Vietnam, all independent contractors are regulated by the Civil Code of 2015 rather than the Labor Code. This means that independent contractors are not categorized as employees. Plus, they don’t have statutory benefits, as mentioned by the Vietnamese labor law. 

However, it is important to understand the Labor Code in case you plan to create a distinction between independent contractors and employees. An understanding is also important to help you convert independent contractors to employees if need be. 

Rights and Benefits

According to local labor laws, working hours for employees are limited to 48 hours per week, with a maximum of 8 hours per day. A worker who works more than these hours is paid for overtime. 

All employees are allowed to work for a maximum of 12 hours a day, including normal and overtime hours.

Employees who work overtime receive: 

  • 150% of the hourly rate on weekdays
  • 200% of the hourly rate on weekly days off
  • 300% of the hourly rate on public holidays

All employees who work at night are provided with an additional amount for their work. 

In addition to the above, the employer’s social insurance contributions cost 23.5% of the employee’s salary. All employees are also obligated to contribute 10.5% of their salary towards this fund. 

The maximum monthly salary of an employee should be VND 46,800,000 to qualify for the calculation of the social insurance, health insurance, and control union fee.

The minimum wage rate in Vietnam isn’t the same in every region.  

For example, in an area like Ho Chi Minh, the minimum wage rate is 4,960,000 VND per month. Similarly, in the region with the provinces of Bac Giang, Bac Ninh, Hai Duong, and Vinh Phuc, the minimum wage rate is 3,860,000 VND per month. 

Another regulation of the labor law for employees is that they are all entitled to a paid annual leave after working for 12 straight months. 

While employees are entitled to these benefits, independent contractors in Vietnam are not. So, providing them with the benefits above may lead to a misclassification. 

Taxes

Vietnam has a progressive personal income tax system. The rates range from 5% to 35%, depending on the salary. The employers deduct the tax amount from the salaries before handing them to the employees. Employers in Vietnam are also responsible for filing any tax returns. 

However, in Vietnam, independent contractors must register with tax authorities themselves. They should also then file taxes and returns as per the law. No employer in Vietnam does it on their behalf. 

How to Pay an Independent Contractor in Vietnam

If you plan to welcome independent contractors to your company, you will have to make sure that they are paid well and on a timely basis. 

Here are some of the common methods to pay your independent contractors in Vietnam. 

Direct Bank Transfers

This is a straightforward way to make a payment. Pay your independent contractors directly in their bank accounts. However, be aware of any hefty charges. These may include transfer fees and foreign exchange charges. 

International Wire Transfers

Many companies also send payments through wire transfer services. These services are usually reliable. However, you may face high fees and longer payment processing times.

Third-party Payroll Services

If you want to make frequent payments or send money to a large team of independent contractors, you can get help from third-party payroll services. They are reliable and efficient. 

E-wallet

Many contractors in Vietnam prefer receiving payments via platforms such as PayPal, Payoneer, or local services.

Cryptocurrency

You can also pay your independent contractors through cryptocurrencies such as Bitcoin. However, ensure that the independent contractor has an account to take up this currency.

Make sure that you always align your chosen payment method with your independent contractor’s preferences. Also, the chosen method must comply with Vietnamese tax regulations.

How to Convert an Independent Contractor to an Employee

If you want to convert an independent contractor to a full-time employee in Vietnam, you must start by communicating your motive to the professional. 

If they agree to this conversion, ensure compliance with Vietnamese labor laws. Achieve this by first curating a proper employment contract. The contract should cover the employee’s details, job position, benefits, wages, working hours and any classes covering termination. 

You must also enroll the individual in social and health insurance and register them with tax authorities if they aren’t already. You should also update tax details and notify the relevant authorities about the change in employment status. 

In some cases, you may also have to obtain a work permit for the professional.  

If the conversion seems daunting, consult a legal expert familiar with Vietnamese labor laws to help you navigate the conversion process smoothly. 

Top Four Independent Contractor Providers in Vietnam

Here is the list of top platforms that can source you with independent contractors in Vietnam.

Horizons

Horizon new homepage

With Horizons, you can hire and onboard top independent contractors in Vietnam within a few days. The platform currently offers this service in more than 180 countries while ensuring compliance with local laws. The team at Horizons ensures the classification of independent contractors correctly so you can stay safe from all fines and reputational damage. 

Deel

Deel homepage

Deel is one of the market leaders for EOR services and remote teams. Co-founded by Alex Bouaziz and Shuo Wang in 2014, Deel serves more than 150 countries, including Vietnam. 

The company offers experts who can help you find top independent contractors that meet your requirements. Additionally, they manage the payment of independent contractors as well, saving you ample time for other tasks. 

Rippling

Rippling homepage

Rippling is also one of the most renowned and reputable platforms that deal with multiple services like HR, finance, IT, and payroll. Rippling has a strong presence in many countries, including Vietnam, because of its amazing services, which also involve hiring independent contractors. The platform ensures the creation of a single onboarding process to save time.

Remote

Remote homepage

This global HR solution provider has the best team to help you hire and manage independent contractors across the world, including Vietnam. Remote provides an efficient management of human resources in over 60 countries for both employees and contractors. 

The team at Remote uses technology for paperless onboarding and in-depth compliance reporting. Also, you can always trust Remote to provide you with all the expertise in international tax compliance and regulations for the proper classification of independent contractors.  

Grow With Independent Contractors in Vietnam

Your decision to hire independent contractors in Vietnam is a wise one for many reasons. Vietnam has affordable labor. Plus, its labor laws aren’t too strict, making it easy for you to create a distinction between an independent contractor and an employee. 

However, at times, you may find the search daunting and cumbersome. So, in that case, you can always contact Remote People to find the best workforce for you. 

At Remote People, our team can help you hire and onboard the best independent contractors in Vietnam. We have worked with many companies that grow by sourcing the best talent in Vietnam. 

We offer all our services at up to 40% reduced costs compared to the regular market prices. This is a great offer for all our startups and SMEs that want to hire independent contractors.

 

So, if you need labor for an upcoming project, simply contact us to help you navigate through this journey.

Frequently Asked Questions

Yes, there are many independent contractors who work legally in Vietnam. You will have to explore different platforms to find them. You can also shortlist the best candidates in Vietnam by consulting recruitment agencies. 

Before hiring an independent contractor in Vietnam, you must properly evaluate their qualifications, experience, and skills. Moreover, if you can, check the general reputation of the contractor from companies who may have already worked with them. 

It depends on their skills, experience, and project budget. Experienced contractors make more than the junior ones.