Expanding into a new market is a strategic move, but it comes with a significant number of administrative and financial hurdles. For many companies, the fastest and safest way to test a new market is to build a back-office team in Vietnam. This case study examines how a marketing firm from Singapore used this exact strategy to successfully enter the Vietnamese market.

The Challenge: Entering a New Market, Avoiding the Red Tape

Our client, a leading marketing solutions firm headquartered in Singapore, saw Vietnam as a prime opportunity for growth. The country’s young, digitally savvy population and booming economy presented a promising market for their services. However, a traditional market entry—which would involve setting up a legal entity—was far too risky and slow for their initial “test-the-waters” phase. This process can take months and cost tens of thousands of dollars.

The company’s core need was simple: to quickly hire a small, on-the-ground team to gauge market viability without the administrative and legal burden. They needed to hire legally and compliantly, manage payroll and taxes, and ensure HR administration was handled correctly, all while their key team in Singapore focused on the business at hand.

From Idea to Team: A Strategic HR Partnership

Rather than handling the complex process themselves, the client partnered with NetViet, a Vietnam-based Employer of Record (EOR) provider. This partnership allowed the Singaporean company to begin its market entry with a streamlined and efficient process. The EOR team acted as an extension of the client’s HR department, taking on the initial legwork.

Their first priority was to define the ideal candidate profile for the new market. They collaborated with NetViet to design a compelling job description for each team member and create a competitive employee budget that was realistic for the Vietnamese market. This included a breakdown of salary, allowances, and bonuses for each employee. We also calculated the full employer cost, including contributions to the government and other third parties. This helped the company have a clear financial plan for the year.

Once the profile was clear, the EOR team start to build a back-office team in Vietnam:

• Tapped into their local talent pool to quickly identify and approach potential candidates with the right experience.

• Conducted professional screening and initial interviews, providing the client with a curated shortlist of qualified candidates. This drastically reduced the client’s internal workload.

• Offered a hiring guarantee policy, which gave the client peace of mind and an added layer of security for their investment.

This strategic approach allowed the client to move from an abstract idea to actively hiring their first employees in Vietnam with unparalleled speed and efficiency.

The Solution: A Strategic EOR Partnership for Compliant Operations

Once the ideal candidates were selected, the EOR partnership began in full. This model allowed the client to hire their first employees within weeks, as the EOR assumed full legal responsibility for them in Vietnam.

The EOR managed all of the complex, in-country HR and compliance tasks, including:

• Legal Compliance: Drafting and managing a fully compliant employment contract in both Vietnamese and English.

• Payroll & Taxes: Processing monthly payroll in Vietnamese Dong, withholding and remitting Personal Income Tax (PIT), and managing all tax filings.

• Mandatory Contributions: Ensuring timely and accurate contributions to Social, Health, and Unemployment Insurance (SHUI) as required by Vietnam’s labor laws. These contributions are a significant factor in employer costs and an area where compliance is strictly enforced.

• HR Administration: Providing guidance on Vietnam’s ever-changing labor laws and regulations, ensuring the client remained fully compliant without the need for a local HR expert.

• Benefits Administration: Handling mandatory and additional benefits, such as paid annual leave, sick leave, and other company-specific perks.

Results & Key Takeaways: From Back-Office to Business Growth

The EOR partnership helped a Singaporean firm launch successfully in Vietnam. The company turned a speculative idea into a real business. Due to this success, they plan to expand their team and establish a permanent presence.

Here are the key takeaways from their success:

• Rapid Market Entry: The client was able to hire and onboard its first employees in less than a month, gaining a significant head start in a fast-moving market.
• Cost & Risk Mitigation: By avoiding a legal entity setup, the client saved substantial costs on registration fees, legal advice, and administrative overhead. The EOR absorbed all legal and compliance risks, protecting the Singaporean firm from potential penalties.
• Operational Efficiency: The client’s HR and finance teams in Singapore were able to focus on core business strategy and development. All local administrative burdens were expertly managed by the EOR, freeing up valuable internal resources.

• Scalability: The EOR model provided the flexibility to scale the team up or down as needed. As the market test proved successful, the company was able to easily add new team members without any additional legal or administrative setup, demonstrating the model’s inherent agility.

• Cultural Connection: Beyond just administrative support, NetViet acted as a crucial bridge between the client and its Vietnamese employees. We explain local laws and common work practices. Our Vietnam presence reassures new employees. This fosters a trusted, positive relationship with clients.

This case study is a testament to the power of a strategic approach when building a back-office team in Vietnam. It proves that with the right partner, a foreign company can achieve its expansion goals quickly, efficiently, and with minimal risk.

Ready to build a back-office team? We can help from the initial idea. Talk to us now for a free consultation!

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