Hiring an Employee in Vietnam Without a Permanent Entity

Mar 24, 2026

Blog, EOR

Hiring an Employee in Vietnam Without a Legal Entity: the EOR Solution

Expanding into Vietnam presents significant opportunities for global companies seeking skilled talent and growing markets in Southeast Asia. However, hiring an employee in Vietnam can be challenging for foreign businesses that do not yet have a local legal entity. One practical solution is working with an Employer of Record (EOR), which allows companies to hire and manage employees in Vietnam legally without establishing a local company. In this article, we’ll explore how businesses can hire employees in Vietnam, the key challenges involved, and why an EOR is often the most efficient and compliant approach.

Table of Contents

What Is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of another company.

When using an EOR:

The EOR becomes the legal employer in Vietnam.
The client company manages the employee’s daily work and responsibilities.
The EOR handles payroll, benefits, taxes, and compliance with local labor laws.

This model allows companies to start hiring employees in Vietnam quickly, without establishing a local entity.

How the EOR Hiring Process Works

The typical process for hiring through an EOR in Vietnam includes the following steps:

1. Candidate Selection

The client company finds and selects the employee they want to hire.

2. Local Employment Contract

The EOR prepares a Vietnam-compliant employment contract, including salary, benefits, probation terms, and statutory protections.

3. Payroll and Benefits Setup

The EOR manages:

Monthly payroll
Personal income tax withholding
Social insurance contributions
Health and unemployment insurance

4. Ongoing HR Compliance

The EOR ensures compliance with Vietnamese labor regulations, including:

Leave policies
Termination procedures
Labor reporting
Regulatory updates

This allows companies to focus on managing their team rather than dealing with legal complexities.

Benefits of Hiring in Vietnam Through an EOR

Faster Market Entry

Companies can hire employees in Vietnam within days, rather than months required to establish a local entity.

Full Legal Compliance

Vietnam’s labor laws include strict rules regarding contracts, termination, and insurance contributions. An EOR ensures compliance with these regulations.

Lower Expansion Costs

Setting up and maintaining a local company involves legal fees, office registration, accounting, and tax reporting. EOR significantly reduces these overhead costs.

Flexibility for Global Teams

If a company is testing the Vietnamese market or hiring remote talent, an EOR provides the flexibility to scale up or down without long-term commitments.

When Should Companies Use an EOR in Vietnam?

An EOR is particularly useful when:

Hiring one or a few employees in Vietnam
Testing a new market before expansion
Building remote or distributed teams
Avoiding the complexity of entity registration
Needing to hire quickly

Once a company grows to a larger team, it may later decide to establish a local entity.

Using an Employer of Record (EOR) allows companies to start hiring employees in Vietnam quickly, legally, and efficiently, without the administrative burden of setting up a local company.

For organizations looking to expand globally or build remote teams, EOR has become one of the most practical solutions for hiring an employee in Vietnam while minimizing risk and operational complexity.

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