Have you ever thought about expanding your business in Vietnam? According to the latest statistics, Vietnam’s GDP in 2025 is projected to be between $455.5 billion and $506 billion.

This is because Vietnam is an attractive location for business development. It doesn’t cost much to start a business in Vietnam, as the country’s regulations are quite friendly toward foreign investments. 

What’s more, the Vietnamese government is open to global opportunities, courtesy of the location, which gives it access to the most convenient shipping routes. 

So, if you are still contemplating starting a business in Vietnam, take the first step right away. And that would be to find a PEO in Vietnam to help you kickstart your international business dream. 

Read to know what a PEO is and how you can find one in Vietnam. 

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What Is a Vietnam PEO?

A Professional Employer Organization or PEO in Vietnam provides comprehensive business solutions to businesses like you. 

Imagine you want to set up your business in Vietnam but don’t know how to hire the right people or pay them correctly. Also, the labor laws and tax regulations may seem too complicated to understand, and you might fear getting unnecessary fines due to this move. 

This is what most businesses expanding into a new country go through until they get a PEO on board. So, what does a PEO do? 

A PEO is responsible for the following:

  • Employee Onboarding: The organization creates a well-structured onboarding program in Vietnam that involves following legal and compliance requirements and setting up a payroll and employee benefit plan. 
  • Payroll Processing: A PEO calculates the salaries of employees according to Vietnamese labor laws. It also ensures that the correct amount of tax is withheld and that the right contributions are made for employee benefits. 
  • Compliance Management: A PEO makes sure to keep your company compliant with local laws and regulations. It also updates you on any changes in the law so you can comply as soon as possible. Additionally, a PEO holds proper documentation for employees, such as work permits and visas. 
  • Fast Market Entry: When you partner with a PEO, you get easy access to the market, making it easy for you to start operating your business without any unnecessary delays. 

Start hiring with a Vietnam PEO

Let us handle the complexities of hiring, compliance, and payroll in Vietnam while you focus on growing your team.

  • Hire employees in Vietnam with a Vietnam PEO
  • No local entity is needed
  • Pricing starts at USD 199 per employee
  • Remote People can also help you find the best talent in Vietnam

👉 Get Your Customized Vietnam PEO Proposal Today!

Why Should You Hire a PEO in Vietnam?

Running a business in Vietnam is quite different from visiting the place on a holiday. From setting up a business and learning about the laws to hiring the right people, you may feel overwhelmed and might also reconsider your choice for expansion. 

However, by hiring a PEO in Vietnam, you may get enough time to focus your energies on the real goals while the organization handles your compliance and employment issues. 

Here are all the benefits you can reap from getting a PEO on board. 

Easy Management of Payroll Issues

Payroll management in Vietnam involves complying with multiple labor and regulation laws. 

For instance, working hours in Vietnam are limited to 48 hours per week, with a maximum of 8 hours per day. Therefore, the employees are paid accordingly. 

It is important for all employers to establish a salary scale, payroll, and labor rates. These rates are then used to recruit employees as mentioned in their contracts. 

In addition, the employer’s cost is 23.5% of the employee’s salary. The maximum monthly salary of an employee for the calculation of the social insurance, health insurance, and control union fee is around VND 46,800,000. 

The minimum wage rate in Vietnam varies from region to region. For instance, in the area that includes 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. 

If you fail to pay your employees the minimum wages, as mentioned, you may be handed over multiple hefty fines to pay. 

Another regulation of the labor law is that all employees working in Vietnam are entitled to a paid annual leave after they have worked for an employer for 12 full months. 

Additionally, all employees who work at night must be paid an additional amount for their work. This salary must be at least 30% of their regular salary. 

There is no escape from an overtime payment. All employees are allowed to work for a maximum of 12 hours a day, including normal and overtime hours.

Employees who work overtime get paid: 

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

The Vietnamese labor law is quite complicated, and someone like you who has never read it might get confused following it. 

A PEO in Vietnam makes sure to process your payroll accurately as per Vietnamese labor laws. As PEOs are well-versed with the laws, they don’t find an issue following them. This smooth compliance saves your business from unnecessary heavy penalties.

Smooth Tax Management of Employees

A PEO helps you handle the complicated tax management of employees in Vietnam. The organization makes sure to register your company with the relevant tax authorities in Vietnam. They also make sure that all employees hired are registered for social security and personal income tax. 

Vietnam follows a progressive personal income tax system for all its residents. The rates range from 5% to 35%, depending on the salary. 

All employees are also obligated to contribute 10.5% of their salary to cover social insurance, health insurance, and unemployment insurance. This can be tricky to calculate without the help of a PEO in Vietnam. 

With a PEO on board, you also don’t have to worry about filling out the PIT declaration with the authorities every month. They will do this essential job for you. 

Quick Entry into the Local Market

It can be very tough to understand the local market of Vietnam if you plan to expand your business in the region for the first time. You may find yourself overwhelmed when managing the logistics and exploring the local laws. 

Plus, locals in Vietnam take some time to accept a foreign business. While they are welcoming, they do raise questions about practices that fail to meet their cultural norms. 

A PEO can save you from all these obstacles. It handles all these hurdles efficiently and allows you to enter the market easily and smoothly to start operating your business without delays. 

Access to Talented People of Vietnam

In Vietnam, the population is young. Around 1 million young adults kickstart their employment journey every year. 

What’s more,  the Vietnamese government has invested heavily in STEM education in the past few years, adding more skills to the labor market. All of this and more makes Vietnam an amazing country in which to find young talent.

A PEO is the perfect organization to help you hire and pay local talent.  It can also manage all the dealings with them itself, so you can focus on your business. 

How Does a PEO Work in Vietnam?

PEOs in Vietnam operate under a co-employment model. This means that the PEO becomes the co-employer of the staff while your business retains the operational control. 

It is common to confuse a PEO with an EOR. An Employer of Records of EOR partner acts as a legal employer rather than a co-employer. So, with an EOR, you don’t have much control left over your organization’s distributed workforce. 

The process of hiring a PEO works in the following manner:

  • You start by looking at different PEOs in Vietnam and their services to find the one that meets your requirements. 
  • Once a budget and plan are decided, you sign the contract with the PEO so they can start hiring employees for your business. 
  • The PEO takes complete responsibility for the onboarding process while taking care of Vietnam’s labor law. 
  • The organization is then also responsible for handling the payroll of the employees hired and any other tax implications that require attention. 
  • You can also hire the PEO to look after your administrative tasks. 

Pricing Models Followed By PEOs in Vietnam

PEOs in Vietnam follow more than one pricing model. Each model is designed to align with the specific services requested by the client’s business. When signing a contract with a PEO in Vietnam, you can choose any of the methods below as per the agreement of the parties involved. 

Per-Employee Per-Month Fee

This method works by the PEO charging a fixed monthly fee for each employee. The model often covers services related to compliance, payroll, benefits administration, and HR support. The fee charged from each client may vary depending on the complexity of the services required or the overall salary levels of the employees hired. 

Percentage of Payroll

Another common pricing model used by PEOs in Vietnam is the percentage of payroll. The PEO charges a defined percentage of the total payroll they manage on a monthly basis. The percentage often ranges between 2% and 10%, as per the size of the payroll and the scope of services requested. 

Flat Monthly Fee

Some PEOs also take a fixed monthly fee despite the size of the payroll. PEOs usually opt for this model for small companies who require their services for an extended time. 

Project-Based Fees

In this model, the PEO charges a one-time based fee for specific projects. The fee isn’t tied to the employee count. It is only offered for projects that focus on specialized or short-term requirements. 

Finding a PEO in Vietnam-Factors to Consider

Congrats on your decision to expand your business in Vietnam. The vibrant workforce and the growing economy of the region will definitely work in your favor. However, when choosing a PEO to manage your human resource needs, you must act smartly. 

Don’t rush. Instead, evaluate these factors carefully before making a decision. 

Expertise in Compliance

Before you sign a contract with a specific PEO, make sure that the organization is aware of the specific laws and regulations in Vietnam. You can find that out by going through the PEO’s track records, which show how they managed regulators and legal requirements specific to Vietnam. You can also read customer reviews of people who have taken their services previously. 

Services Offered

Not all PEOs will offer you the services you require. Therefore, it is imperative to go through their portfolio in detail. Look for PEOs that can at least offer core functions like payroll management, tax filing, and employee onboarding. If you require additional services like support for training and recruitment, be sure to mention them in the contract. 

Cost Model 

You must go ahead with a PEO whose cost model aligns with your budget. In addition, you should also separately inquire about any hidden charges or any extra cost that they may incur for their services. 

 

You need to make sure that all issues related to the PEO’s fee structure are resolved. Transparency is key here to avoid any disputes later in the process. 

Local and International Experience 

A reputable PEO having experience with the locals in Vietnam is a major plus. However, you must also consider whether the organization also has some experience working with a multinational venture like you. Both aspects are important to ensure a smooth coordination between your Vietnam operations and home office.

Reputation and References 

Go through news, case studies, and client testimonials to learn about the reputation of the PEO. You can also request references from companies working in the same industry as you. A reputable PEO in Vietnam will never hide its challenges and success in serving its clients locally or internationally. 

Customer Support

It is important to choose a PEO that offers reliable customer support in order to resolve issues promptly. A PEO that has a dedicated support team will find it easy to manage your HR operations effectively. 

Grow Your Business With the Best PEO in Vietnam

Vietnam is a promising country for your business venture. However, instead of setting up a business in Vietnam yourself and hunting for the right labor, partner with a reputable PEO. 

The organization will not only help you find a skilled workforce in Vietnam but will also make sure that you comply with all the local laws while running your business successfully. 

Confused about finding the best PEO? Get in touch with us at Remote People. We can save you money by giving recommendations on the right PEO as part of our PEO broker service.

We offer this at a cost up to 40% lower than going directly with the PEO provider. Our suggested PEOs are known for their reliability, performance, and great reputation. 

Contact us now to benefit from our amazing services and prompt customer support. 

Frequently Asked Questions

According to statistics, ADP Totalsource is the largest PEO, and it also serves Vietnam. 

Yes, PEOs run legally in Vietnam.

You can use a PEO to comply with Vietnamese labor laws, simplify your tax and payroll management, and access local skilled labor with ease. 

It is important to choose a reliable and reputable PEO in Vietnam to avoid loss of control over certain direct HR functions. Some businesses increase their dependency on non-reliable PEOs for local knowledge and compliance, only to get tricked later.