Employer of Record ( EOR ) is the fastest way to legally employ someone in Vietnam without setting up a local entity. After all, hiring here isn't as simple as signing a contract and wiring a salary.
The country's employment framework has specific requirements around contracts, social insurance contributions, tax withholding, and termination procedures. Get these wrong, and you're not just dealing with paperwork headaches — you're exposed to real legal risk.
So our team at Talent JDIhas put together a dedicated guide for companies that are actively building or planning a team in Vietnam and want to understand the EOR model properly. It covers how to evaluate EOR providers, what it costs, how it works, and the questions you should be asking before signing anything.
Already have a team in Vietnam but struggling with HR admin and compliance?
An employer of record is a company that employs someone on your behalf. You direct the work — the tasks, the deliverables, the team structure, the performance expectations.
In other words, the EOR is the legal employer on paper: they sign the employment contract, process payroll, handle tax filings, manage mandatory insurance contributions, and ensure the arrangement stays compliant with local law.
The employee still works for you in every practical sense. They sit in your stand-ups, use your tools, report to your managers, and are integrated into your team. The EOR exists in the background, handling everything that keeps the employment legally sound.
The Three-Party Relationship
Party
Their role
What they don't do
Your company
Directs the work, owns the relationship, sets tasks and deliverables
Does not issue the employment contract or run payroll
EOR provider
Signs the contract, processes payroll, files taxes, and manages compliance
Does not direct the employee's day-to-day work
Employee
Works for your company — your tasks, your schedule, your direction
Has no formal employment relationship with your company on paper
Vietnamese authorities and employment courts look at who controls the work when assessing an employment arrangement — not just who signed the contract. Meaning the EOR agreement is explicit about this: you control the work, the EOR handles the compliance.
Quick clarification: EOR vs PEO vs Setting Up Your Own Entity
These three options tend to trip up companies the most when expanding into Vietnam — they look similar on the surface, but serve different stages and have different levels of risk.
Factors
EOR
PEO
Own Subsidiary
Legal employer
The EOR
Shared
You
Entity needed
No
Usually yes
Yes — you build it
Compliance burden
Handled by EOR
Shared
Fully on you
Time to first hire
Days
Weeks
3–6 months
Revenue permitted
Yes
Yes
Yes
Best for
Testing a market, early headcount, speed
Companies with an existing local entity
Long-term, large team
It is also worth noting that there is another option called Representative Offices. In fact, many companies establish an RO, assuming it enables them to build a Vietnam team.
It does allow employment, but an RO cannot generate local revenue, which creates real operational constraints for technology teams whose work has commercial value. If your Vietnam employees are building products, serving customers, or contributing to billable work, an RO is the wrong structure.
What Does an EOR In Vietnam Actually Handle?
Key responsibilities of an EOR in Vietnam
The short answer: everything employment-related except the work itself. Some companies come to EOR thinking it's just a payroll vendor. Others worry it's closer to outsourcing, where they lose visibility into their people. Neither framing is right.
A good EOR in Vietnam manages the full employment administration stack. Here's what that covers in practice:
1
Payroll Processing
Your EOR calculates monthly pay in Vietnamese Dong, handling base salary, allowances, PIT withholding, and social insurance deductions. Payslips are issued in the legally required format, with full records maintained for audits.
2
Personal Income Tax
Vietnam's PIT is progressive, ranging from 5% to 35%. Your EOR withholds and remits the correct amount each month and handles the annual reconciliation filing.
3
Mandatory Social Insurance Contributions
Vietnamese law requires both the employer (~21.5%) and employee (~10.5%) to contribute to social, health, and unemployment insurance monthly. Your EOR registers each employee, calculates contributions, and remits them on schedule.
4
Employment Contracts
Your EOR drafts compliant contracts — indefinite, fixed-term, or seasonal — covering salary, benefits, and probation, typically in both Vietnamese and English. They also manage renewals to prevent unintended changes in contract status.
5
Leave Tracking and Management
Your EOR tracks statutory leave (starting at 12 days annually), manages accruals, calculates encashment on departure, and handles sick leave, maternity leave, and the 11 public holidays.
6
Termination, Severance, and Offboarding
Vietnamese labour law is strict on valid termination grounds, notice periods, and severance for employees with over 12 months of service. Your EOR manages the entire offboarding process — final pay, documentation, social insurance deregistration, and the last payroll run.
7
Benefits Administration
Beyond statutory requirements, your EOR can structure and administer supplementary benefits like private health insurance, bonuses, and allowances, all properly documented and reflected in payroll.
8
Work Permit Coordination
Foreign nationals need work permits renewed every two years, and your EOR manages the full application and renewal process. They'll also flag any eligibility issues before a contract is offered.
How Does EOR Work in Vietnam? Step-by-Step
The process is more straightforward than most people expect. From the moment a candidate accepts an offer to their first day on the payroll, it typically takes one to two weeks. Here's what happens at each stage:
Step 1Define the role, salary, and terms
Before any contract is drafted, you agree on the employment details with your EOR: job title, gross monthly salary, any variable components, probation period, notice period, and benefits.
The EOR flags anything that creates compliance issues and advises on how to structure the offer to meet candidate expectations while staying compliant. Getting this right upfront avoids contract revisions later.
Step 2Select and engage your EOR provider
If you're establishing a new EOR relationship, this is where you sign the Master Service Agreement. The MSA sets out the commercial relationship, liability boundaries, data handling, and fee structure.
With established EOR providers, it takes three to five days for new clients. If you already have an MSA in place, skip to the next step.
Step 3The EOR drafts a compliant employment contract
Your EOR prepares a bilingual employment contract (Vietnamese and English) that reflects the agreed terms and complies with Vietnamese labour law.
You review and approve the contract before it goes to the candidate. In other words, it is your chance to confirm the terms are exactly as agreed. Once approved, the candidate signs, and the contract becomes binding.
Step 4Onboarding: social insurance and payroll setup
With the signed contract in hand, your EOR registers the employee with Vietnam's social insurance system, sets them up on payroll, and collects the documentation required for tax registration (national ID, tax code, bank details).
For foreign national hires, the work permit application starts at this stage. The full onboarding process typically takes three to five business days.
Step 5You manage the work; the EOR manages everything else
Once the employee starts, the EOR moves entirely to the background. You direct the day-to-day work. Your EOR processes payroll each month, manages HR administration, tracks leave balances, stays current with changes to Vietnamese employment law, and handles any HR issues that require legal input. From the employee's perspective, they experience a standard employment relationship.
Step 6Monthly invoicing
Your EOR issues a single consolidated monthly invoice covering the employee's gross salary, employer social insurance contributions, and the EOR service fee. You review, approve, and pay.
The EOR then processes payroll and transfers the net salary to the employee's Vietnamese bank account. Most international clients invoice in USD; the EOR handles the VND conversion.
Step 7Offboarding when the time comes
Whether an employee resigns, their fixed-term contract ends, or you need to initiate a termination, your EOR manages the full offboarding process compliantly.
This is often the step that saves companies the most: getting terminations wrong in Vietnam is expensive, and the requirements are specific enough that even well-intentioned companies make costly mistakes without local expertise.
How Much Does EOR in Vietnam Cost?
Cost is where every conversation starts, and understandably so. The answer has a few moving parts — which provider you choose, how senior the hire is, and what services are included in the fee.
Fee Structures
EOR providers in Vietnam charge in one of two ways:
Flat monthly fee: Typically USD 400–700 per employee per month for a Vietnam-based specialist EOR. Global platforms often price lower, but may offer less local support and responsiveness.
Percentage of gross salary: Usually 8–15% of monthly gross. This model can work out cheaper for junior hires, but becomes expensive as seniority increases.
For financial planning, flat fees are easier to forecast. Most companies find that total employment cost via EOR (salary plus contributions plus EOR fee) lands at roughly 130–145% of the agreed gross salary.
Hidden Costs to Watch For
Not all providers are upfront about ancillary fees. Before signing, get explicit answers on:
Setup fees: A one-time onboarding fee per employee (often USD 200–500). Some providers absorb this in the monthly fee; others charge it separately.
Offboarding fees: Termination processing, especially when severance is involved, can attract a separate charge.
FX markup: If you invoice in USD and employees are paid in VND, there's a conversion somewhere in the chain. Ask whether the rate is mid-market or marked up.
Minimum commitment: Some providers require a minimum engagement period per employee, typically three to six months.
Example Cost Breakdown: Hiring in Vietnam With an EOR
The table below shows the total monthly cost for a mid-senior software developer earning USD 2,500 gross per month:
Cost component
Amount (USD)
% of salary
Employee gross salary
$2,500
100%
Employer BHXH — Social Insurance (17.5%)
$438
17.5%
Employer BHYT — Health Insurance (3%)
$75
3%
Employer BHTN — Unemployment Insurance (1%)
$25
1%
EOR service fee (flat monthly estimate)
$550
22%
Total monthly employer cost
~$3,588
~143%
These figures are estimates only. Insurance contributions are calculated against a statutory salary cap that changes periodically, and EOR fees vary by provider and headcount.
There is also one additional consideration: the 13th-month bonus. While not legally mandated in every circumstance, it's effectively market standard in Vietnam — expected by all candidates and factored into most compensation conversations.
As a result, we highly recommend budgeting roughly one-twelfth of your annual salary per month as an accrual.
How Long Does It Take to Hire via EOR in Vietnam?
EOR hiring timeline in Vietnam
Speed is one of the main reasons businesses consider EOR services in the first place — so it's no surprise that the time savings are significant compared to what companies would have to navigate on their own.
Stage
Via EOR
Own Entity Setup
Legal structure ready
Day 1 — EOR already operating
3–6 months
Employment contract drafted
1–3 business days
2–4 weeks (legal review)
Social insurance registration
3–5 business days
1–2 weeks post-entity
First payroll run
Within the first monthly cycle
Requires separate payroll setup
Candidate to first day employed
7–14 days from contract sign
4–6 months minimum
In a nutshell, if a candidate accepts an offer today, a well-run EOR has them properly employed, insured, and on payroll within two weeks. That matters because strong candidates in Vietnam don't wait around; they're fielding multiple offers at once.
If your hiring process takes four months just to get the legal structure in place, you'll lose them to someone who was already ready to move.
What Slows Things Down
That said, a few things can slow the process down even with a good EOR. Missing candidate documents — tax code, ID, bank details — are the most common culprit.
Going back and forth on contract terms adds time, too, so it's worth getting everyone aligned before the EOR puts anything on paper. Additionally,Vietnam's 11 public holidays are also worth keeping in mind if your onboarding timeline happens to fall near one.
For companies that need both — finding the right candidates and employing them compliantly — working with a provider that handles recruitment and EOR together removes a lot of unnecessary back and forth.
A mid-senior software developer search typically takes two to four weeks with a dedicated specialist recruiter, which means from the moment the search kicks off to the employee's first day, you're looking at four to six weeks end-to-end.
Need recruitment and EOR handled by the same team in Vietnam?
The criteria that matter most when evaluating EOR providers aren't always the ones that get the most airtime. Here's how to evaluate the options seriously:
Own legal entity in Vietnam
Ask directly: "Do you own a registered company in Vietnam?" If the answer is anything other than an unambiguous yes, that's a meaningful risk factor. Sub-contracted EOR arrangements aren't illegal, but they're harder to hold accountable when problems arise.
Local HR and payroll team in-country
There's a real difference between an EOR with a team in Ho Chi Minh City and one managing Vietnam from Singapore. Local teams understand the unwritten norms: how resignation conversations typically go, what's actually enforceable in a contract, and how employment disputes tend to proceed in practice.
Track record with comparable clients
Ask for references from clients with a similar team size and industry. An EOR that's great at managing large retail workforces may not be the right fit for a 6-person engineering team where each hire is critical.
Transparent fee structure
The total cost should be fully clear before you sign anything. If a provider can't give you a complete cost breakdown in writing, that opacity is likely to continue throughout the engagement.
IP assignment clauses in the contract
The employment contract your EOR drafts should explicitly state that all work created by the employee belongs to your company. This should be standard practice. If it's not in the draft, push back before the contract goes to the candidate.
Data security standards
Your employees will work with your codebase, your client data, and your systems. Confirm how employee data is processed, where it's stored, who has access, and whether their data security posture meets your company's requirements.
Top Employer of Record Partners in Vietnam
Leading EOR solutions in Vietnam
The EOR market has expanded significantly over the past few years, and the quality gap between providers is wider than most people realise. Price is rarely the right lens for evaluation — the cost of a compliance error or a poorly handled termination far exceeds any fee differential. Here's how the main options in the Vietnam market stack up:
Aspect
Talent JDI
Glints
Deel
Remote
RemoteFirst
Vietnam entity
Vietnam-based, local entity
Owned a local entity
Partner-based in VN
Owned entity
Partner-based in VN
Best for
Companies wanting deep local expertise + recruitment in VN
Companies wanting recruitment + EOR bundled across SEA
Fast-growing teams needing global scale
Tech companies with IP to protect
Companies needing distributed hiring support and global payroll
Recruitment bundled
✓ Yes — VN-specialist recruiters
✓ Yes — SEA talent pool
✗ EOR only
✗ EOR only
✗ EOR only
Platform type
Service-led, on-the-ground team
Hybrid — tech + local HR teams
Platform, self-serve
Platform, compliance engine
Platform, fast onboarding
Want more details on the top EOR providers in Vietnam?
Global EOR platforms (Glints, Deel, Remote, Multiplier) offer genuine value for companies hiring across multiple countries simultaneously. A single vendor for 10 markets simplifies a lot. Their Vietnam coverage is real, their compliance infrastructure is sound, and their technology is generally good. The trade-off is depth: their Vietnam expertise exists within a generalist model designed to work across 150+ countries.
A Vietnam-specialist EOR like Talent JDI offers the inverse: significantly deeper local knowledge, a team working exclusively in this market, and the ability to bundle recruitment and EOR without friction between teams. The limitation is obvious: if you're also hiring in Germany and Canada, you'll need separate providers for those markets.
For companies whose Vietnam team is the primary or sole offshore investment, the specialist argument is strong. The quality of judgment calls — in contract structuring, candidate conversations, and complex situations — compounds over time.
Frequently Asked Questions
Q
Is EOR legal in Vietnam?
Yes, entirely. An EOR operates as a properly registered Vietnamese company, contributes to social insurance on behalf of employees, files taxes with the relevant authorities, and employs staff under Vietnamese labour law. The commercial relationship between you and the EOR is governed by a standard service agreement. There's nothing irregular about this structure from a Vietnamese legal standpoint.
Q
Can an EOR hire both Vietnamese nationals and foreign expats?
Both are possible, but the process differs. Vietnamese nationals go through standard employment onboarding — contract, social insurance registration, and payroll setup. Foreign nationals additionally require a work permit, which takes four to eight weeks to obtain. Eligibility depends on the role and the candidate's qualifications; your EOR will assess this before the contract is drafted and flag any concerns early.
Q
What's the minimum contract duration for an EOR engagement?
There's no legal minimum, but most providers have a commercial minimum — typically three months per employee. From a practical compliance perspective, very short fixed-term engagements under three months create ambiguity around employee rights under Vietnamese labour law. For genuinely short-term work, a contractor arrangement may be more appropriate, though these carry their own compliance considerations worth understanding before committing to that structure.
Q
Who actually pays the employee — us or the EOR?
The EOR pays the employee directly. Every month, you pay the EOR a consolidated invoice (covering gross salary, employer contributions, and the service fee), and the EOR processes payroll and transfers net salary to the employee's Vietnamese bank account. You never handle the employee's payroll directly.
Q
Can we convert an EOR employee to a direct hire later?
Yes, and this is a natural transition point as companies establish their own entities. When you're ready, the EOR offboards the employee from their payroll system, you issue a new contract under your own Vietnamese entity, and the employee's role continues without interruption. Some EOR providers charge a conversion fee for this transition — worth checking in your initial agreement so there are no surprises when the time comes.
Q
What happens if we want to terminate an employee hired via EOR?
The EOR manages the termination at your instruction, following Vietnamese labour law. The process depends on the grounds: resignation, mutual agreement, or employer-initiated termination. Each has different requirements. Notice periods are typically 30–45 days, depending on contract type. Employees with more than 12 months of service have severance entitlements. Your EOR calculates all of this, issues the correct notice, prepares the required documentation, and manages the final payroll and social insurance deregistration.
Q
Is EOR the same as outsourcing?
No, and the distinction is commercially and legally significant. In outsourcing, a third party provides a deliverable — the output of work. You don't manage the people involved, and the outsourcing company directs how the work gets done. In an EOR arrangement, you manage the employee directly: their tasks, performance, schedule, deliverables, and team integration. The EOR only handles the employment administration. The employee is part of your team — attending your meetings, using your systems, reporting to your managers.
Q
How do we handle IP ownership when using an EOR?
IP ownership must be explicitly addressed in the employment contract your EOR drafts. A well-structured agreement includes an IP assignment clause stating that all work created by the employee in the course of their employment belongs to the client company. This is standard practice with reputable EOR providers and should be in the contract before it goes to the candidate. If you don't see this clause, ask for it. Review it carefully before signing — the language matters.
Q
What currency is payroll paid in?
Employees are paid in Vietnamese Dong (VND). You invoice the EOR in your agreed billing currency — typically USD or SGD for international clients — and the EOR handles the conversion. For roles where the agreed salary is denominated in USD (common for senior and bilingual positions), ask your EOR how they handle exchange rate fluctuation.
Conclusion
What separates well-run Vietnam teams from problematic ones usually comes down to one thing: whether the employment foundation is solid. Compliant contracts, proper social insurance, clear IP ownership — these aren't just legal boxes. They build trust, and that trust shows up in retention and the quality of work.
Talent JDI has been operating on the ground in Vietnam for years, working with companies from their first Vietnam hire through to managing 50+ person IT teams. We're Vietnam's specialist IT recruitment and Employer of Record partner, one of the few companies in Vietnam licensed by the Ministry of Labour and Social Welfare to legally employ foreign companies' developers.
With over 30,000 pre-vetted developers in our network, 8 years in the market, and 300+ international clients, we know how to move quickly without cutting corners. Most clients have their team up and running within 3 to 4 weeks, with the first payroll cycle running smoothly from day one.
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