Hiring in Vietnam with an EOR: costs, rules, and how it works (2026)
The most common mistake foreign employers make when hiring in Vietnam is issuing an English-only employment contract denominated in USD, then discovering it is legally non-compliant before the first payroll runs. Vietnamese law requires that any contract involving a foreign party be written in Vietnamese or in a bilingual format, with the Vietnamese version controlling in any dispute. Salary must also be stated in Vietnamese dong. Getting this wrong does not just create paperwork; it can invalidate the contract entirely and strip the employer of the protections it thought it had from day one.
Beyond the contract form, Vietnam's employer social security contribution sits at 23.5% of gross salary, covering social insurance, health insurance, unemployment insurance, and a trade union fee. Employees contribute a further 10.5%. Those numbers apply to foreign workers too, not just local hires. The minimum wage is set regionally; the national floor sits at 4,960,000 VND per month, and the labour force of roughly 57 million people is spread across a country where wage expectations vary considerably by city and region.
Thirty-six providers offer Employer of Record (EOR) services in Vietnam, with published base prices from $99 to $699 per employee per month. An EOR hire can be live in three to five days. Setting up your own entity takes three to six months. That gap matters here more than in many markets, because the compliance steps that precede a legal hire are unusually front-loaded.
How should you hire in Vietnam?
| Employer of Record (EOR) | Your own legal entity | Independent contractor | |
|---|---|---|---|
| Time to first hire | Days | Months | Immediate |
| Upfront cost | None | Incorporation, registrations, local counsel | None |
| Ongoing cost | From $49.99–$699/employee/month | Payroll, accounting, filings, benefits administration | Contractor invoices only |
| Best when | You want 1–5 hires fast, without a local entity or in-house payroll expertise. | You are building a long-term team (roughly 5+ employees) and want full control. | Genuinely project-based, independent work. Misclassifying an employee as a contractor carries real penalties. |
- Time to first hire
- Days
- Upfront cost
- None
- Ongoing cost
- From $49.99–$699/employee/month
- Best when
- You want 1–5 hires fast, without a local entity or in-house payroll expertise.
- Time to first hire
- Months
- Upfront cost
- Incorporation, registrations, local counsel
- Ongoing cost
- Payroll, accounting, filings, benefits administration
- Best when
- You are building a long-term team (roughly 5+ employees) and want full control.
- Time to first hire
- Immediate
- Upfront cost
- None
- Ongoing cost
- Contractor invoices only
- Best when
- Genuinely project-based, independent work. Misclassifying an employee as a contractor carries real penalties.
Rule of thumb: an EOR wins on speed and simplicity for the first handful of hires; once a team in Vietnam grows past roughly five people, running your own entity usually becomes cheaper than paying a monthly fee per employee.
If you are considering a direct entity in Vietnam, the regulatory sequence you must handle before a single foreign employee starts work is worth understanding clearly. Article 152 of the Labour Code requires you to register your demand for foreign labour with a state authority and obtain written approval for each position at least 15 days before the hire date. That approval process is separate from the work permit application. An EOR, already operating as the legal employer in-country, absorbs that obligation. For a company testing the Vietnamese market with one or two hires, building the internal process to manage labour demand registration, bilingual contracts, and mandatory social insurance enrollment for foreign staff is a real operational cost, not just a legal formality.
On the economics, the employer social contribution of 23.5% of gross is the dominant cost variable to model. The thirteenth-month salary is customary in Vietnam, which in practice means most competitive offers include it even though it is not legislated as mandatory. Annual leave is 12 days, and there are 11 public holidays. Severance exposure, based on the World Bank employing workers data, runs to roughly 24.6 weeks, so termination costs deserve a line in any budget model before you hire. The corporate tax rate for a local entity is 20%.
In my view, the entity route makes sense once you have enough headcount and revenue in Vietnam to justify the three-to-six-month setup timeline and the ongoing compliance overhead. For earlier-stage expansion, an EOR is the more practical structure, particularly given how specific Vietnam's pre-hire approval requirements are for foreign workers. On the contractor question: Vietnam's labour law is explicit about what constitutes an employment relationship, and the mandatory social insurance enrollment rules for foreign workers make it harder to sustain a contractor arrangement for anyone doing regular, directed work. That is a risk worth taking seriously before defaulting to a freelance contract.
Vietnam employment facts at a glance
Across employer contributions, severance and notice combined, Vietnam ranks #4 of 192 in our Global Employer Burden Index.
Average salary in Vietnam by occupation
Gross monthly earnings of employees per ISCO-08 occupation group, in VND, from the ILO's official labour statistics. These are the latest published survey figures for Vietnam(reference year 2024), refreshed automatically when the ILO releases newer data. Survey earnings, not the statutory minimum wage above. Use them to benchmark an offer before an EOR quote turns it into total employer cost.
Source: ILOSTAT, the International Labour Organization's statistics database (average monthly earnings of employees, both sexes), reference year 2024.
What it costs to employ in Vietnam
Based on OECD 2026 aggregate data for a single earner at average wage.
What catches employers out in Vietnam
Vietnam's labour rules include several requirements that are easy to miss if you are used to hiring in common-law or Western European markets. Each of the points below has tripped up foreign employers in practice.
Prior state approval before recruiting a foreign worker
Before you can recruit any foreign national, Vietnamese law requires you to submit a written justification for why a local worker cannot fill the role and obtain approval from the relevant state authority. This must happen at least 15 days before the planned start date. It is a separate step from the work permit, and skipping it or running it in parallel with contract signing puts the entire hire at risk.
Vietnamese-language contracts and VND salary denomination
Labour contracts involving a foreign party must be in Vietnamese or bilingual, with the Vietnamese text legally controlling. Salary must be expressed in Vietnamese dong. English-only contracts denominated in USD or EUR are treated as non-compliant, and the consequences can include the contract being unenforceable at the moment you most need it.
Hard statutory caps on overtime hours
Vietnam does not leave overtime limits to contract negotiation. Overtime cannot exceed 50% of normal daily hours, total daily hours including overtime cannot exceed 12, monthly overtime is capped at 40 hours, and the annual ceiling is 200 hours in most cases. Broad contractual consent to heavy overtime does not override these ceilings. Employers who rely on it without tracking actual hours against the statutory limits are exposed to Labour Code breaches.
Foreign employees must be enrolled in Vietnamese statutory insurance schemes
Foreign workers in Vietnam are subject to mandatory social security, health insurance, and unemployment insurance contributions under Vietnamese law. Employers cannot substitute home-country coverage or private insurance and consider the obligation met. The assumption that expatriates are exempt from local schemes is wrong, and the cost of correcting missed enrollments retroactively is significant.
Probation is a formally regulated phase, not an informal arrangement
Vietnamese law requires probation to be documented either in a separate probation contract or as a clearly defined clause in the main labour contract. The maximum probation period for most roles is 60 days. If the probation terms are non-compliant or undocumented, the probation period can be invalidated, meaning full labour-law protections apply from the first day of work.
Your next step
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