Hire in Vietnam Fast: EOR vs. Subsidiary Setup

Apr 19, 2024

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Hire in Vietnam Fast: EOR vs. Subsidiary Setup

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Need a quick Vietnam launch? See why an EOR might be your smartest HR solution.

Expanding your business into Vietnam is an exciting step, but the decision of how to structure your presence there can feel daunting. Do you set up a full-fledged subsidiary or opt for the streamlined approach of an Employer of Record (EOR)?

This choice has big implications for your budget, your timeline, and how much HR hassle you’re willing to take on. Let’s break down the pros and cons of each option to help you make an informed decision.

Setting Up a Subsidiary in Vietnam

This is the traditional path. You establish a separate legal entity under Vietnamese law. Here’s what to keep in mind:

Control: You have full control over operations and decision-making within your subsidiary.
Long-Term Commitment: This signals a serious investment in Vietnam, ideal for companies anticipating significant growth.
Complex & Costly: Expect legal fees, setup time, and the expense of office space and potential hiring of internal HR personnel.
Ongoing Compliance: You’re solely responsible for navigating Vietnam’s complex regulations on your own.

Using an Employer of Record (EOR) in Vietnam

An EOR acts as the legal employer of your team in Vietnam. This offers a simpler, faster alternative.

Rapid Market Entry: Start hiring top talent within weeks, not months.
Cost-Effective: Significantly lower upfront costs compared to a subsidiary.
Minimize HR Headaches: The EOR handles payroll, taxes, benefits administration, and staying up-to-date on compliance.
Scalability: Easily hire more staff or downsize as needed, perfect for testing the market or project-based work.

When to Choose Which

Here’s a quick guide:

Subsidiary Might Be Better If:
- You envision a large, long-term presence in Vietnam
- You need absolute control over all business functions
- You have the resources to manage complex setup and compliance
EOR Is Often Ideal If:
- You need to hire quickly and start operating fast
- You want to minimize upfront costs and financial risk
- You prefer to outsource HR complexities to local experts

The Best of Both Worlds?

Some companies start with an EOR to quickly enter the Vietnamese market. Later, as their presence grows, they might transition to setting up their own subsidiary. There’s no single right answer – it depends on your unique business goals.

Need Help Deciding?

At NetViet, we offer EOR solutions tailored to your needs and can also advise you on whether a subsidiary structure makes sense in the long run. Contact us today to discuss the best path for your Vietnam expansion!