Employer of Record in Vietnam

An Employer of Record (EOR) helps you hire employees in Vietnam without setting up a local legal entity. It acts as the legal employer for your team members, handling all the administrative and legal tasks that come with employment. This includes payroll, taxes, benefits, and compliance with Vietnamese labor laws. You still manage your employees' day-to-day work and responsibilities. An EOR like Rivermate (https://rivermate.com/employer-of-record) makes expanding your team into Vietnam straightforward and efficient.

How an Employer of Record (EOR) Works in Vietnam

Using an EOR in Vietnam simplifies the hiring process. Here is how it typically works:

1. You Find the Candidate. You recruit and select the best person for the job.
2. The EOR Hires Your Candidate. The EOR legally hires the employee in Vietnam through a local, compliant employment contract.
3. Onboarding Begins. The EOR manages the entire onboarding process. This includes collecting necessary documents and ensuring all legal requirements are met.
4. The EOR Handles HR and Payroll. The EOR takes care of all payroll, tax withholdings, social security contributions, and benefits administration according to Vietnamese law.
5. You Manage Your Employee. You direct your employee's daily tasks and responsibilities. The EOR remains the legal employer, but you control the work.

Why use an Employer of Record in Vietnam

An EOR offers a practical solution for companies looking to hire in Vietnam. It saves you the significant time and expense of establishing a legal entity in the country. This allows you to enter the market and start operations much faster.

Here are some key benefits:

• Enter the Market Quickly. You can hire employees and begin working in Vietnam in a matter of days instead of months.
• Ensure Legal Compliance. EORs are experts in Vietnamese labor law. They make sure your employment contracts, payroll, and benefits are fully compliant with local regulations.
• Reduce Costs. You avoid the high costs associated with company registration, legal fees, and setting up local HR infrastructure.
• Offer Competitive Benefits. An EOR can provide your employees with access to comprehensive benefits packages, helping you attract and retain top talent.
• Simplify HR and Admin. You offload complex administrative tasks like payroll processing, tax filing, and managing statutory contributions.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Vietnam includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Vietnam.

Hiring in Vietnam is a smart move for many companies. You get access to a young, skilled workforce in a fast-growing economy. But, like any country, Vietnam has its own set of rules for employment. It's important to get the details right to keep your business compliant and your team happy.

Employment contracts & must-have clauses

When you hire an employee in Vietnam, you need a written employment contract. This is a legal requirement and protects both you and your employee. Verbal agreements are only allowed for jobs lasting less than one month.

There are two main types of employment contracts in Vietnam:

• Indefinite term: This type of contract has no end date.
• Definite term: This contract has a specific end date, up to 36 months. You can only renew a definite-term contract once. After that, it automatically becomes an indefinite-term contract.

Your employment contracts must include some key clauses to be compliant with Vietnamese law. Think of these as the non-negotiables.

Probation periods

A probation period is a good way to see if a new hire is the right fit for your company. In Vietnam, you can include a probation period in the employment contract, but there are rules about how long it can be. The length of the probation period depends on the type of job:

• 180 days: For enterprise executive positions.
• 60 days: For jobs that require a college degree or higher.
• 30 days: For jobs that require intermediate vocational certificates or for skilled workers.
• 6 working days: For all other jobs.

During the probation period, you must pay your employee at least 85% of their regular salary.

Working hours & overtime

Standard working hours in Vietnam are 8 hours a day and 48 hours a week. You must give your employees at least one full day off each week.

Overtime is allowed, but there are limits. An employee's total working time, including overtime, cannot be more than 12 hours in a day and 40 hours in a month. The annual overtime limit is generally 200 hours, but it can be extended to 300 hours in some specific industries.

You also need to pay your employees extra for overtime work. Here’s how it breaks down:

• Weekdays: At least 150% of their regular pay.
• Weekends: At least 200% of their regular pay.
• Public holidays: At least 300% of their regular pay.

Public & regional holidays

Your employees in Vietnam are entitled to paid time off for public holidays. It's a good idea to be aware of these dates so you can plan your work schedule accordingly.

Here are the public holidays for 2025:

Hiring contractors in Vietnam

You can also hire independent contractors in Vietnam. This can be a flexible way to get specialized skills for specific projects. However, it's very important to classify your workers correctly.

An independent contractor is self-employed. They control their own work and are not considered employees. This means they are not covered by the Labor Code and are not entitled to benefits like social insurance and paid leave. They are also responsible for their own taxes.

Misclassifying an employee as a contractor can lead to serious problems, including:

• Back payments for social insurance contributions.
• Payment of employee benefits you would have owed.
• Fines from tax and labor authorities.

An Employer of Record (EOR) can help you avoid these risks. An EOR can legally hire employees on your behalf in Vietnam, ensuring you comply with all local labor laws. This way, you can get the talent you need without the legal headaches.

Navigating compensation and payroll in Vietnam requires a clear understanding of local rules. You'll find that salaries are negotiated between you and your employees, but they cannot fall below the government-mandated minimum wage. All payments to employees must be made in Vietnamese Dong (VND). Your typical monthly salary packages will include the gross salary and mandatory insurance contributions.

Payroll cycles & wage structure

In Vietnam, you will generally pay your employees on a monthly basis. It's common to offer a 13th-month bonus to employees, although it is not required by law.

Your employees' salary structure will consist of:

• Gross Salary: The total amount before any deductions are made.
• Net Salary: The amount an employee takes home after all deductions.
• Basic Salary: This typically makes up a significant portion of the gross salary.
• Allowances and Bonuses: These can be included to attract and retain talent.

Overtime & minimums

The standard workweek in Vietnam is 48 hours, typically spread over six days. Any hours worked beyond this are considered overtime. Overtime pay rates are:

• 150% of the regular wage for extra hours on a normal workday.
• 200% for work on weekends.
• 300% for work on public holidays.

Vietnam's minimum wage varies by region. As of 2024, the monthly minimum wages range from VND 3,250,000 to VND 4,680,000, depending on the location.

Employer taxes and contributions

As an employer in Vietnam, you are required to make several contributions on behalf of your employees. These are calculated as a percentage of the employee's gross salary.

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Employee taxes and deductions

Your employees also contribute to social security funds from their gross salary. You are responsible for deducting these amounts during payroll processing. Vietnam has a progressive income tax system, with rates ranging from 5% to 35%.

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In Vietnam, providing strong employee benefits and leave is key to attracting and keeping the best talent. The country's labor laws set minimum requirements for all employers. Understanding these rules is the first step to building a competitive benefits package that helps your business grow.

Statutory leave

Vietnamese labor law requires employers to provide several types of paid leave.

• Annual Leave: Employees who have worked for 12 months are entitled to 12 days of paid leave. This increases by one day for every five years of service with the same employer.
• Sick Leave: Employees can take sick leave and receive a portion of their salary from the social insurance fund. The number of days depends on how long they have contributed to the fund, starting at 30 days per year for those who have paid in for less than 15 years.
• Maternity Leave: Female employees get six months of fully paid maternity leave, which is covered by the social insurance system.
• Paternity Leave: Fathers receive at least five working days of paid leave after the birth of a child.

Public holidays & regional holidays

Employees in Vietnam are entitled to paid time off for public holidays. If a holiday falls on a weekend, the following weekday is typically given as a day off.

Typical supplemental benefits

Beyond the legally required benefits, many companies offer extra perks to stay competitive. Here’s a look at both required and common supplemental benefits.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you. An EOR acts as the legal employer for your staff in Vietnam, taking on the responsibilities of payroll, taxes, benefits, and compliance.

Here’s how an EOR can help:

• Ensure Compliance: An EOR stays up to date with Vietnam's labor laws so you don't have to. They make sure your benefits packages meet all legal requirements.
• Administer Benefits: An EOR manages everything from health insurance to paid leave, saving you time and administrative work.
• Offer Competitive Packages: EORs have local market knowledge. They can help you create benefits packages that attract top talent in Vietnam.
• Simplify Payroll: An EOR handles all payroll processing and tax deductions related to benefits.

Using an EOR allows you to focus on your core business operations while ensuring your employees receive compliant and competitive benefits.

Ending a work relationship in Vietnam has specific rules you need to follow. The process must be handled carefully to stay compliant with local labor laws. When a contract ends, you must give the employee a written notice. This letter should explain why the employment is ending, the final date, and details about final payments like unused vacation days or severance. Clear communication and following the correct procedures help you avoid legal trouble.

Notice periods

You must provide written notice before termination. The length of the notice period depends on the type of employment contract.

No notice is required during the probation period.

Severance pay

Employees who have worked for you for 12 months or more are usually entitled to severance pay. The payment amount is half a month's salary for each year of service. You must make all final payments, including severance, within 14 working days of the employee's last day. In some special cases, this can be extended to 30 days.

How Rivermate handles compliant exits

Navigating employee terminations in a different country can be complex. We make sure the entire offboarding process is handled correctly and in compliance with Vietnamese law.

Here’s how we help:

• Documentation: We prepare and handle all necessary termination documents, ensuring they meet legal standards.
• Final Payroll: We calculate and process all final payments, including salary, unused leave, and any required severance.
• Compliance: We ensure every step of the termination process follows the latest labor laws to minimize legal risks for your business.
• Clear Communication: We help manage communication with the departing employee to ensure a smooth and professional exit.

Navigating the visa and work permit landscape in Vietnam can feel complex. The key is understanding the difference between a work permit, which authorizes you to work, and a visa, which allows you to enter and stay in the country. For any foreigner looking to work in Vietnam for an extended period, a work permit is essential, and it's the foundation for obtaining a long-term work visa. The process typically involves your employer justifying the need to hire a foreign national over a local candidate.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be your legal employer in Vietnam, handling the complexities of work permits and visa sponsorship. This is a practical solution if your company doesn't have a legal entity in the country. The EOR takes on the responsibility of ensuring you are compliant with local labor laws, managing your payroll, taxes, and benefits.

However, there are realities to consider:

• What an EOR can sponsor: An EOR can sponsor a work permit for qualified professionals in roles that meet Vietnam's legal requirements. This typically includes managers, executives, specialists, and technicians. The EOR will guide you through the necessary paperwork, which often includes your degree, proof of relevant work experience, a health check, and a clean criminal record.

• What an EOR likely can't sponsor: An EOR is not a magic wand. They operate within the bounds of Vietnamese law and are subject to scrutiny. Sponsorship for roles that don't appear to require a foreign expert or for individuals who lack the proper qualifications will likely be unsuccessful. There can also be limitations due to visa quotas that may be in place.

• Practical routes: For many, the most straightforward route is to have a legitimate job offer from a company that then uses an EOR to handle the employment formalities. For freelancers or those with more independent work arrangements, a "Personal EOR" has emerged as an option. This involves paying a local entity to legally employ you, thereby allowing you to obtain a work permit and secure your long-term stay.

Business travel compliance

For short-term business trips, it's crucial to use the correct visa and follow the rules to avoid complications.

• The right visa for business: The DN visa is designed for business-related activities like meetings, contract signings, or market research. It's sponsored by the Vietnamese company you are visiting. This formalizes your visit and simplifies compliance.

• The issue with e-visas for business: While convenient, using an e-visa for business purposes is coming under increased scrutiny. These are self-sponsored, and if you're engaging with a local company, immigration authorities expect you to be on a host-sponsored DN visa. Repeatedly using e-visas for business travel can raise red flags and may lead to visa denials.

• Key compliance steps:

  • Get a sponsored DN visa: This is the recommended approach for any business travel involving a local entity.
  • Declare your purpose: If you do use an e-visa, you must clearly state "business" as your reason for entry.
  • Register your stay: Your landlord is responsible for registering your temporary stay with local police, but it's important to ensure this is done. A host-sponsored DN visa makes this process more straightforward.