Hiring in Vietnam Made Easy: How EOR Services Help Foreign Companies

ByDevwiz

Vietnam is now one of Asia’s most promising places for foreign companies to expand. With its booming economy, youthful and educated labor force, and geopolitical location in Southeast Asia, Vietnam presents enormous opportunities for foreign firms looking to expand. However, hiring staff in Vietnam is not as straightforward as placing a simple advertisement and issuing a job offer. Instead, it requires familiarity with local labor legislation, employment agreements, payroll and taxation requirements, and compliance responsibilities.

This is where an employer of record Vietnam (EOR) can streamline the process. As the legal employer for a foreign company, an EOR handles employment complexities, allowing businesses to focus on operations and growth without getting entangled in administrative red tape.

Why Foreign Companies Turn to Vietnam

Vietnam’s appeal is obvious. It has a young, technology-savvy workforce, more than 50% of its population is below the age of 35, and relatively low labor costs relative to many other Asian markets. Foreign investors are drawn to its manufacturing, IT, fintech, and e-commerce growth. The government has also been signing free trade agreements, facilitating international business to invest across borders.

But converting this opportunity into a seamless recruitment process involves knowledge of local labor law. A contract should be done in Vietnamese, executed before the commencement of work, and adhere to statutory benefits. Payroll involves the proper computation of individual income tax and social insurance contributions. Even a single mistake, such as delayed filing, may impose penalties or lead to disputes, so compliance is not negotiable.

What Exactly does an Employer of Record Vietnam do

An employer of record Vietnam is the official, legal employer of your workers in the country. You still have control over the worker’s day-to-day work, KPIs, and inclusion in your team, while the EOR handles the administrative, legal, and compliance functions.

Services usually cover:

  • Issuance of compliant employment contracts.
  • Enrollment of workers with local authorities for tax and social insurance.
  • Payment of payroll with accurate tax and benefit withholdings.
  • Maintaining compliance with labor laws and revising contracts if legislation changes.
  • Administering statutory entitlements such as annual leave, sick leave, and maternity/paternity leave.
  • Facilitating compliant offboarding and final settlement payments.

Companies like Multiplier offer these services with local knowledge, keeping your employees lawfully employed while you can continue to concentrate on expansion and operations.

EOR Benefits Compared to Entity Setup

Opening your own business in Vietnam involves business registration, licenses, legal counsel, tax setup, and adherence to local office standards. It’s usually time-consuming and costly, particularly if you only wish to hire a few workers.

With an employer of record Vietnam, you can:

  • Recruit quicker: Start hiring in a few days and not in months.
  • Prevent setup fees: Avoid legal expenses, registration fees, and entity upkeep.
  • Minimize compliance risks: Let the EOR manage legal responsibilities so you remain compliant with Vietnamese laws.
  • Access local knowledge: Draw on advice about usual practices, such as providing a Tet bonus or coordinating with local holiday timetables.

How the Process Works

Hiring an employer of record Vietnam takes a methodical approach:

  • Role and Contract Definition: You supply the job details, compensation, and benefits. The EOR prepares a locally acceptable contract in Vietnamese that includes all the required clauses like probationary periods, work timing, and notice period for termination.
  • Employee Onboarding: The EOR takes the identification documents, tax numbers, and banking details and registers the employee with labor and insurance authorities.
  • Payroll and Benefits Administration: Gross-to-net salaries are calculated monthly by the EOR, taxes withheld, statutory contributions processed, and salary deposits made on time. In Vietnam, these include health insurance, social insurance, and unemployment insurance contributions.
  • Ongoing Compliance: The EOR revises contracts if labor laws change, handles statutory reporting, and manages compliant terminations, including final pay and benefit settlements.

Key Compliance Areas in Vietnam

Hiring in Vietnam has certain legal conditions that an EOR assists with administering:

  • Probationary Periods: Typically one to two months, depending on the job.
  • Working Hours: Standard is 48 hours per week, and overtime is capped and paid at higher rates.
  • Annual Leave: At least 12 days a year, increases with seniority.
  • Bonuses: Several employers provide a 13th-month payment, particularly during the Lunar New Year (Tet).
  • Social Insurance Contributions: Split between employer and employee, with specific percentages for social, health, and unemployment insurance.

By managing these requirements, an employer of record Vietnam keeps you and your employees in compliance.

What To Seek in an EOR Partner

When selecting an employer of record Vietnam, look for:

  • Proven Local Expertise: Extensive knowledge of Vietnamese labor law, tax regulations, and benefit administration.
  • Transparent Pricing: Clear breakdown of costs, i.e., salary, statutory contributions, and service fees.
  • Human Support: Local HR experts who can quickly respond to complicated questions.

Multiplier provides these facilities, allowing businesses to hire in Vietnam without the bureaucratic hassle of establishing their own entity.

Cultural Considerations When Hiring in Vietnam

Beyond compliance, employee culture knowledge enhances staff retention. Vietnamese workers appreciate job security, open communication, and equitable pay. Respecting age, bonus rewards during grand festivals, and the possibility of professional advancement can entice and retain top performers. Your employment package can be better matched with local culture by an experienced EOR counsel on these soft aspects.

Real-World Example

Consider a European SaaS business looking to employ a developer in Ho Chi Minh City. Without an EOR, they would have to set up a legal entity, something that might take months and involve perpetual compliance management. Through using an employer of record Vietnam, they can:

  • Issue a compliant contract in days.
  • Hire the developer with all tax and insurance registrations done before his/her first day.
  • Maintain monthly payroll, benefits, and statutory submissions without the need to hire an in-house HR staff in Vietnam.

By doing so, they can concentrate on product development knowing that their recruitment process is fully compliant.

Final Thoughts

An employer of record Vietnam is a pragmatic, compliant, and cost-effective means to tap into Vietnam’s rising talent pool. With an EOR like Multiplier, companies can hire fast, remain compliant, and outsource payroll with confidence, without the need to open a local entity.

Whether you’re piloting the Vietnamese market or building on an existing operation, an EOR has the infrastructure to hire and sustain employees while you focus on growing your business.

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