Key takeaways about EOR hiring in Vietnam
Three things to know before you start
An employer of record in Vietnam becomes the legal employer on your behalf, handling contracts, social insurance registration, payroll in VND, and ongoing compliance with the Labor Code 2019. You retain full day-to-day management of your team member's work.
The compliance risks you transfer to the EOR are real and specific. Social insurance filing, contract type selection, and probation compliance are where foreign employers most commonly make costly mistakes.
The speed advantage over entity setup is significant. Where a wholly-owned Vietnamese entity takes 3–6 months to establish, an EOR can onboard your first hire within 48 hours of offer acceptance. Oyster provides in-house compliance specialists and legal-reviewed contracts, so you are not dependent on third-party advisers when Vietnamese labor law changes.
Vietnam at a glance before you hire
The quick facts block above covers the essential numbers. A few deserve emphasis before you build your hiring plan. Vietnam operates on a monthly payroll cycle, and contracts must be in Vietnamese. The Vietnamese version governs in any dispute. Total employer cost runs approximately 21% above gross salary once all statutory contributions are included. Factor that into your headcount budget from day one.
Imagine hiring your first employee in Vietnam
What hiring actually looks like with an EOR
You are a People Ops leader at a growing company. Your engineering team has identified a senior developer in Ho Chi Minh City, the offer is ready, and your CFO wants to know the timeline and the risk.
Without an EOR, you must register a Vietnamese entity. That means 3–6 months of setup, legal fees, registered capital requirements, and ongoing corporate governance. You also need local legal counsel for a compliant Vietnamese-language contract, plus a payroll process that remits social insurance, health insurance, and unemployment insurance each month.
With an EOR, you sign one service agreement. The EOR becomes the legal employer, generates a compliant Vietnamese employment contract, registers the employee for social insurance, and runs the first payroll in VND on the agreed monthly cycle. Your developer starts work. If you want to understand exactly what the EOR handles under Vietnamese law, the next section covers it in detail.
What is an EOR in Vietnam
An EOR, or employer of record, is a company that employs workers on behalf of another business. In Vietnam, the EOR becomes the legal employer under the Labor Code 2019, satisfying all statutory obligations while you direct the employee's day-to-day work.
How an EOR differs from your own entity
The practical difference comes down to time, cost, and ongoing overhead. Here is how the two models compare:
Entity setup costs (legal fees, registered capital, annual compliance overhead) typically exceed EOR service fees for the first two to three years of operation. For teams testing a new market or hiring fewer than 15 employees in-country, the EOR model is almost always the faster and more cost-effective path.
Is using an EOR legal in Vietnam?
Yes, using an EOR is legal in Vietnam. The Labor Code 2019 governs all employment relationships in the country, and the EOR as formal employer satisfies all statutory obligations under that code. There is no prohibition on third-party employment arrangements for foreign investors.
One important structural point: the EOR must hold a wholly-owned entity in Vietnam, not a third-party partner arrangement. A wholly-owned entity means the EOR has direct legal accountability for employment obligations. If your EOR relies on a local partner rather than its own entity, the chain of accountability breaks down and your compliance exposure increases. Verify this before you sign. Oyster's Vietnam entity structure is designed to maintain direct legal accountability for every hire.
Vietnam labor laws your EOR manages for you
The Labor Code governs every employment relationship in Vietnam. Foreign employers consistently underestimate how specific and enforced these requirements are. Your EOR handles all of the following on your behalf.
Contract types you must know before hiring
Vietnam recognizes three contract types under the Labor Code 2019: indefinite-term contracts, fixed-term contracts (12–36 months), and specific-job contracts for work completed within 12 months. The rule that catches most foreign employers: after two consecutive fixed-term contracts, the third must be indefinite-term, or both parties may not renew. Misapplying this rule creates significant legal exposure.
All contracts must be in Vietnamese. A translated copy may accompany the Vietnamese version, but the Vietnamese text governs in any dispute. Your EOR drafts compliant contracts on your behalf and updates them when the law changes.
Statutory benefits every Vietnamese employee receives
Vietnamese employees are entitled to a minimum of 12 days annual leave per year (with additional days for seniority and hazardous work), 11 public holidays, 6 months of paid maternity leave, paternity leave of 5–14 days depending on birth circumstances, and mandatory enrollment in social, health, and unemployment insurance. Failure to enroll employees in social insurance is one of the most common compliance failures for foreign employers in Vietnam. It is also one of the most expensive to correct retroactively. Your EOR handles all enrollment and ongoing filings.
Social insurance and payroll tax in Vietnam
Employer statutory contributions total approximately 20% above gross salary: social insurance 14%, health insurance 3%, unemployment insurance 0.5%, trade union fund 2%, and occupational disease and accident insurance 0.5%. Employee contributions total 10.5% deducted from gross: social insurance 8%, health insurance 1.5%, and unemployment insurance 1%. Personal income tax is progressive from 5% to 35%. Your EOR calculates, withholds, and remits all contributions and tax on each monthly payroll cycle.
Working hours and overtime rules in Vietnam
Normal working hours in Vietnam cannot exceed 8 hours a day or 48 hours a week. Overtime cannot exceed 12 hours in a day, 40 hours in a month, and 200 hours in a year (up to 300 hours in certain industries with Ministry of Labor approval). Overtime pay rates apply above these thresholds. Your EOR tracks working time obligations and flags potential violations before they become penalties.
How termination and severance work in Vietnam
Notice periods depend on contract type: 45 days for indefinite-term contracts, 30 days for fixed-term contracts of 12–36 months, and 3 working days for fixed-term contracts under 12 months. Severance allowance applies at 0.5 month's salary per year of service worked before January 1, 2009; service from 2009 onward is covered by the unemployment insurance fund rather than employer-paid severance.
Dismissal must follow the disciplinary procedure in the Labor Code. Arbitrary dismissal exposes employers to reinstatement orders or compensation claims. Your EOR manages the process and documentation to keep terminations legally defensible.
Probation period rules for employers in Vietnam
Vietnamese law permits one probation period per role. Duration is 60 days for roles requiring a university degree or higher, 30 days for intermediate or vocational qualification roles, and 6 working days for all other roles. Probation pay must be at least 85% of the agreed full salary. The employer may terminate during probation without severance if the employee does not meet requirements. Your EOR sets probation terms correctly in the employment contract from day one.
The workforce in Vietnam and typical pay
Vietnam is not just a cost play. It is a genuine talent destination with a growing pool of skilled professionals in software development, data engineering, and digital marketing. Understanding the market helps you build competitive offers and retain the people you hire.
Tech talent and salary benchmarks in Vietnam
Ho Chi Minh City and Hanoi are the primary tech hubs, with strong concentrations of software engineers, data professionals, and digital marketers. Salary benchmarks for mid-level software engineers are meaningfully lower than comparable talent in Western markets, though the gap narrows at senior levels. Vietnam's Digital Technology Industry Law (DTI Law) signals sustained government investment in AI, semiconductors, and digital assets, which is expanding the talent pipeline over time.
One cost item that surprises first-time hirers: the Tet bonus (13th-month bonus) is customary and expected in Vietnam. It is not legally mandated in the same way as some other markets, but failing to provide it creates serious retention risk. Your EOR includes this in total cost modeling so your budget reflects what competitive employment actually costs.
Foreign nationals in Vietnam need a work permit before their first day
Foreign nationals working in Vietnam generally require a work permit (Giấy phép lao động). Exemptions exist for certain categories including company owners, board members, and chief representatives of international organizations. Work permits are valid for up to 2 years and are renewable. Employers must apply before the foreign national begins work. A labor market test may be required to show that no qualified Vietnamese candidate was available . Your EOR manages the work permit application as part of onboarding, so this does not become a blocker for your hire's start date.
How to choose the right Vietnam EOR
Not all EOR providers are equal, and the differences matter most when something goes wrong. Here is how to evaluate your options before you commit.
Five questions that reveal whether your Vietnam EOR can be trusted
- Confirm the EOR has a wholly-owned entity in Vietnam, not a third-party arrangement
- Ask whether compliance specialists are in-house or outsourced
- Verify that pricing is flat and published, with no termination fees
- Check onboarding timeline — specifically whether the EOR can onboard within 48 hours
In-house specialists matter because outsourced partners create a gap between the question you ask and the answer you receive. When Vietnamese labor law changes (and it does), you want someone who already knows the answer, not someone who needs to call a local firm to find out. Oyster meets all five criteria and links each to the relevant sections on compliance, pricing, and speed covered in this guide.
How your EOR keeps you compliant in Vietnam
Compliance is not a one-time setup task. It is an ongoing obligation that changes as Vietnamese law evolves and as your employee's tenure grows. Your EOR carries that obligation so you do not have to.
Legal-reviewed contracts and ongoing compliance support
Oyster's employment contracts for Vietnam are reviewed by in-country legal specialists and updated when the Labor Code changes. Your account includes access to in-house HR advisers (not a chatbot or FAQ) for Vietnam-specific questions. Oyster's EPLI (Employment Practices Liability Insurance) coverage applies to Vietnamese employment claims, protecting you if a dispute arises.
Oyster is the only B Corp-certified EOR, which means ethical employment practice is built into how the platform operates, not just what it says. Vietnam is a market where labor rights scrutiny is growing, and that distinction matters to employees and to the companies that care about how their teams are treated.
Oyster covers 120+ countries through EOR, with local compliance infrastructure in each.
What does a Vietnam EOR actually cost
The honest answer has two parts: what Vietnam's statutory framework costs, and what the EOR service costs. Both belong in your budget.
Total employer costs when you hire in Vietnam
Statutory employer contributions total approximately 20% above gross salary: social insurance 14%, health insurance 3%, unemployment insurance 0.5%, trade union 2%, and accident insurance 0.5%. Add the EOR service fee for a complete total cost of employment picture.
Entity setup costs (legal fees, registered capital, annual compliance overhead) typically exceed EOR fees for the first two to three years. The Region I minimum wage is 4,960,000 VND/month from July 2024, which sets the floor for your compensation planning. For most companies hiring their first few employees in Vietnam, the EOR model is the more cost-effective path until headcount justifies the entity investment.
How quickly can you hire in Vietnam
Entity setup in Vietnam takes 3–6 months. An EOR bypasses that entirely. The comparison is the proof of speed.
Oyster's onboarding timeline for Vietnamese team members
- Sign one Oyster service agreement
- Submit the new hire's offer details through the Oyster platform
- Oyster generates a compliant Vietnamese employment contract
- Employee signs digitally
- Oyster registers the employee for social insurance and payroll
- First payroll runs on the agreed monthly cycle
Total time from offer acceptance to first day: typically 48 hours. Oyster supports payroll in VND directly, so your Vietnamese employee receives local-currency payslips from day one. Compare that to the 3–6 month entity setup timeline, and the operational case for an EOR becomes straightforward.
Oyster versus other EOR providers for Vietnam
When you are evaluating EOR providers for Vietnam, consider who has the infrastructure and accountability to back it up when something goes wrong.
Why choose Oyster for your Vietnam team
- Wholly-owned entity in Vietnam for direct legal accountability
- In-house compliance specialists, not outsourced partners
- Flat transparent pricing with no termination fees
Oyster is the only B Corp-certified EOR, meaning your care for employees in Vietnam is built into how we operate, not just what we say. When you hire, pay, and care for your team across 120+ countries, you want a partner whose values align with yours, and whose compliance infrastructure can handle the moments when things get complicated.
Book a Demo and a specialist will walk you through a Vietnam-specific hiring plan.
