What is an employer of record (EOR) in Vietnam?

What is an employer of record in Vietnam?

An employer of record (EOR) in Vietnam is a company that legally employs your worker on your behalf, so you can hire in Vietnam without setting up your own entity. The EOR signs the Labour Code employment contract, runs payroll in Vietnamese dong, pays statutory insurance and withholds income tax, while you direct the day-to-day work.

Put differently, the EOR is the legal employer and you are the functional one. On paper the worker is employed by the EOR's Vietnam-registered entity, which carries the employer's obligations and liabilities under Vietnamese law. In practice the worker reports to you, does your work and follows your priorities. That split is the whole point: you get a Vietnamese hire in days, without incorporating, and the party on the hook for local compliance is a company that already operates in Vietnam.

The catch: Vietnam has no statute for “employer of record”, so a provider's legitimacy rests entirely on how it is structured — the two lawful routes are set out under whether an EOR is legal in Vietnam.1

Legal employer

A Vietnam-registered company that employs the worker — not you.

Your own entity

Not required to hire a worker through an EOR.

Employer on-cost

About 23.5% of gross salary in statutory contributions, as of October 2026.345

Legal basis

No EOR statute; either direct employment or licensed labour sub-leasing.1

What does an employer of record actually do?

An EOR in Vietnam takes on every legal-employer task: it issues a Labour Code employment contract, runs monthly payroll in Vietnamese dong, pays statutory social, health and unemployment insurance, withholds personal income tax, administers leave and benefits, sponsors work permits for foreign hires, and manages onboarding and offboarding.

In concrete terms, that means the EOR handles the following while you keep control of the role and the output:

• Employment contract. A compliant contract under the Labour Code 2019 — which recognises only two types, indefinite-term and fixed-term, with fixed-term capped at 36 months.1
• Payroll in dong. Monthly salary paid in Vietnamese dong, with an itemised payslip each period.
• Statutory contributions. On top of gross salary a Vietnamese employer carries about 23.5% in statutory on-costs — 17.5% social insurance, 3% health insurance, 1% unemployment insurance and a 2% trade-union fee — while the employee bears 10.5% (as of October 2026).345
• Personal income tax. Withholding and reporting of the employee's income tax to the tax authority.
• Leave and benefits. Annual leave, public holidays, sick and parental leave, and any contractual benefits such as a Tet bonus.
• Work permits. For a foreign hire, sponsoring the work permit and residence card — see work-permit sponsorship for foreign employees.
• Onboarding and offboarding. Registering the hire, and handling notice, final pay and statutory severance at the end.
• Record-keeping. The filings, registrations and payslips a Vietnamese labour inspector expects to see.

A credible EOR names the Vietnam-registered entity that signs the contract and shows the statutory on-cost separately from its own fee. Every quote we send does both — and sets out the legal structure used. Our own fee at EOR Vietnam is a flat US$149 per employee per month — the same for every Vietnamese-national hire regardless of salary, role, location or headcount — with no setup, onboarding or offboarding fees; foreign nationals who need a Vietnamese work permit are quoted separately. The salary and the statutory on-cost are passed through at cost, plus a refundable security deposit of two months' employment cost (salary plus the statutory on-cost) held for the engagement and returned at the end (pricing as of October 2026). What an EOR does not do is direct the work, set your strategy or absorb your commercial risk; those stay with you. The detail of those contributions sits on the employer's roughly 23.5% statutory contributions5, and what it all adds up to is on what an EOR costs in Vietnam. To price a specific hire, request a costed EOR Vietnam quote. The rules behind each of these employer tasks — contracts, payroll, tax, leave and termination — are covered across our Vietnam employer guides.

How does an EOR work in Vietnam, step by step?

An EOR works in Vietnam in five steps: you scope the role, the EOR quotes it, both sides sign a service agreement, the EOR employs and onboards the worker through its Vietnamese entity, and you then manage the work day to day while the EOR runs payroll, insurance and tax until the engagement ends.

1. Scope and quote

   You share the role, city, gross salary, start date and whether the hire is a Vietnamese or foreign national. The EOR returns a costed quote showing gross salary, the statutory on-cost and its service fee.

2. Service agreement

   A business-to-business service agreement sets the terms between you and the EOR: scope, fees, data handling, intellectual-property assignment and how either side can end it.

3. Employ and onboard

   The EOR's Vietnam-registered entity signs a Labour Code contract with the worker, registers the hire for social, health and unemployment insurance, and — for a foreign hire — starts the work-permit dossier.

4. Run payroll and stay compliant

   Each month the EOR pays salary in dong, remits insurance, withholds income tax, issues payslips and keeps the required filings and records up to date.

5. You manage, the EOR administers

   You direct the work and set priorities; the EOR carries the employer's legal duties and handles leave, changes and, at the end, lawful notice and final pay.

How long onboarding takes depends on the hire. A Vietnamese national with no permit requirement can often start within days of a signed agreement. A foreign hire takes longer, because the work permit must be issued before employment begins; the timeline and documents are set out under work permits for foreign employees. Either way, the slow part of opening your own company — incorporation — is removed entirely.

Put as a side-by-side timeline, the onboarding gap is days against months:

Days

A Vietnamese national with no permit requirement can start within days of a signed service agreement — there is no incorporation step to wait on.

A few weeks

A foreign hire through an EOR waits on the work permit, which must be issued before employment can begin.

One to three months

Setting up your own entity instead — roughly 15 working days for the Investment Registration Certificate and 3 to 5 more for the Enterprise Registration Certificate, plus post-licensing tax, bank, seal and insurance setup (as of October 2026).6

That lead time is why an EOR suits a fast or first hire, while your own entity suits a permanent, larger operation; the break-even is worked through under EOR versus setting up your own entity in Vietnam.

How to hire an employee in Vietnam through an EOR

To hire an employee in Vietnam through an EOR, you scope the role and sign a service agreement; the EOR's Vietnamese entity then employs the worker and runs payroll, insurance and tax, while you manage the work day to day. A Vietnamese hire can start within days of signing; a foreign hire waits on the work permit. The same route works for on-site and remote employees.

EOR vs hiring directly: what changes?

The difference between an EOR and hiring directly is who the legal employer is. Without a Vietnamese entity you cannot be the legal employer of a worker in Vietnam at all, so “hiring directly” really means first incorporating a company and taking on every employer duty yourself. An EOR removes that step.

With an EOR, the provider's registered entity is the legal employer, and the employer's liabilities — payroll, insurance, tax, correct termination — sit with a company that already operates in Vietnam. You keep operational control but shed the administrative and compliance load. The trade-off is a flat per-employee service fee on top of salary and the statutory on-cost — US$149 per employee per month with EOR Vietnam — and less direct control over the employment relationship than you would have running your own entity.

Hiring directly through your own entity reverses that: higher fixed cost and a slower start, but full control, no per-head service fee, and a permanent local presence. Which is cheaper depends on headcount and how long you will operate — the break-even is worked through under EOR versus setting up your own entity in Vietnam, and the running numbers are on what an EOR costs in Vietnam.

How is an EOR structured legally in Vietnam?

Vietnam has no law that uses the words “employer of record”, so an EOR runs on one of two legal bases: licensed labour sub-leasing, or direct employment by a Vietnam-registered company under a business-to-business service agreement. The route decides who is the legal employer and which limits apply.

Route A — licensed labour sub-leasing. A licensed company employs the worker and places them to work under a client's direction while remaining the legal employer. The route is tightly regulated: the provider needs a licence backed by a refundable deposit of VND 2 billion, the role must be one of a closed list of 20 permitted occupations, and each placement with the same client is capped at 12 months (as of October 2026).12 That 12-month cap is the key limit on running a long-term EOR through sub-leasing.

Route B — direct employment plus a service agreement. Most providers that offer ongoing EOR in Vietnam use this route: a Vietnam-registered entity directly employs the worker on a standard labour contract — running payroll, withholding tax, paying insurance and registering the contract — and invoices the overseas client under a business-to-business service agreement. Because this is ordinary direct employment, it is not bound by the 12-month sub-leasing cap. It is a structuring approach, not a special EOR law.1

Which route a provider uses changes who bears liability and which roles are even eligible, so it is the first thing to establish. The two routes, the grey areas they carry — permanent-establishment risk (your activity in Vietnam creating a taxable presence of your own), co-employment (two parties sharing the employer's duties, which Vietnamese law does not cleanly recognise) and renewal of sub-leasing placements — and how to check a provider's structure are set out in full under whether an EOR is legal in Vietnam, and the contract rules behind both are on Vietnam's employment-contract and labour-law basics.

When is an EOR the right choice in Vietnam?

An EOR is the right choice in Vietnam when you need to hire a small number of people quickly, test the market, or employ remote employees without committing to a local company. It is less suitable when you plan a large permanent team, run revenue-generating operations on the ground, or hire into roles that need their own licences — cases that usually point to your own entity.

It fits best for a first hire or two, a short project, a remote engineer, or keeping a valued employee on the payroll while you decide whether to invest further. It lets you start in days, stop with proper notice, and avoid the fixed cost and ongoing accounting, tax and insurance administration of a subsidiary — the fuller case for the model is set out under the benefits of using an EOR in Vietnam. If you are hiring software talent in particular, the model and local market are covered under hiring software developers in Vietnam through an EOR.

It fits less well as headcount and permanence grow. Past a certain size the per-employee fee can exceed the cost of running your own entity, and some activities genuinely require a Vietnamese company of your own. If a provider proposes the sub-leasing route for a permanent role, treat the 12-month placement cap as a warning sign. Weigh it against running your own entity instead, and when you are choosing a provider, use how to choose an EOR provider in Vietnam.

EOR vs PEO, contractor and your own entity

An EOR is one of four common ways to engage a worker in Vietnam, and they differ mainly in who the legal employer is and who carries the compliance risk. The table compares an EOR with your own entity, an independent contractor and a PEO, so you can see where each fits before reading the dedicated comparisons. Each label — EOR, PEO, co-employment and labour sub-leasing — is defined in plain English in the Vietnam HR and employment glossary.