Employer of Record (EOR) in Vietnam
Employer of Record (EOR) in Vietnam allows businesses to hire employees without setting up a local entity. Vietnam has a labor force of over 52 million people, one of the largest in Southeast Asia. The country is well known for its growing talent pool in manufacturing, IT, engineering, and business services. Many international companies choose EOR services in Vietnam to manage employment contracts, payroll, taxes, and compliance with local labor laws, which can be challenging due to frequent legislative updates. Using EOR, businesses can expand faster, minimize risks, and ensure compliance with Vietnamese employment regulations.
About Vietnam
Vietnam is a fast-growing economy located in Southeast Asia, bordered by China, Laos, and Cambodia, with a long coastline along the South China Sea. The country has become a top destination for foreign investment, particularly in manufacturing, electronics, textiles, software development, and agriculture.
Over the past two decades, Vietnam has transformed into one of Asia’s most dynamic emerging markets, supported by a young population, competitive wages, and government-backed economic reforms. The workforce is relatively young, with a median age under 33, providing a strong foundation for industries requiring skilled labor and technical knowledge.
Vietnam’s strategic location, membership in multiple trade agreements, and improving infrastructure make it attractive for companies seeking to enter Asian markets. The government actively promotes digitalization and workforce upskilling, creating opportunities for international firms to hire through EOR solutions.
Employment Terms and Regulations
Types of Contracts
- Indefinite-term contracts
- Definite-term contracts (12–36 months)
- Seasonal or specific-job contracts (under 12 months)
Working Hours
- Standard: 48 hours per week (8 hours/day, 6 days/week)
- Overtime capped at 40 hours per month, 200 hours/year (exceptions: up to 300 hours/year)
Minimum Wage (2025)
- Varies by region: approx. VND 3.25M – 4.68M per month (~USD 130–185)
Probation Period
6–60 days depending on job level
Taxation and Contributions
- Employers withhold Personal Income Tax (PIT): progressive rates from 5%–35%
- Social insurance contributions apply to Vietnamese employees; expatriates also covered under certain conditions
Types of Leave
Annual Leave:
12–16 days (increases with seniority)
Public Holidays:
11 days per year
Maternity Leave:
6 months
Paternity Leave:
5–14 days
Sick Leave:
Covered under social insurance (up to 30–70 days depending on seniority and job type)
Employee Benefits
- Mandatory social insurance (pension, sickness, maternity, occupational risks, unemployment)
- Paid annual leave
- Health insurance
- Public holidays and Tet (Lunar New Year) leave
Termination Process
- Notice period: 30 days (fixed-term contract), 45 days (indefinite contract)
- Dismissal allowed only under specific legal grounds
- Severance pay: half a month’s salary per year of service if eligible
Employer Taxes
Social Insurance: 17.5%
Health Insurance: 3%
Unemployment Insurance: 1%
Total Employer Contributions: ~21.5% of gross salary
EMPLOYER TAXES
21.5% (Estimated)
FAQ's
How STM Manages Employment in India
Establishing an entity in every hiring location can be cost-prohibitive. STM simplifies the process by employing and paying your Indian talent on your behalf. We handle the intricate HR procedures and employment contracts in compliance with local laws. You can conveniently approve invoices through our platform. By partnering with an Employer of Record (EOR), you can efficiently and compliantly hire top talent globally.
Payment Processes for Indian Employees
We streamline payroll management for your Indian workforce. Employee hours, leaves, holidays, bonuses, and commissions are meticulously calculated. STM invoices you around the 15th of each month in your preferred currency, including US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD). This ensures your Indian employees receive their salaries promptly in Indian Rupees (INR). Simplify further by consolidating your global team’s salaries into a single payment.
Full-time Employees vs. Global Contractors
Contractors engage with multiple companies and are self-employed, while full-time employees focus solely on their employer and receive additional benefits like health insurance, equity, and time off. While hiring international contractors can be cost-effective, it comes with misclassification risks. Partnering with an EOR for contractor onboarding and payments ensures compliant and timely compensation.
Reliable Employee Support
Our platform offers accessible support for employees and employers with inquiries about benefits, visas, and global employment in India. Utilize the chat function to connect with our expert team. Additionally, every STM client is assigned a dedicated account manager, serving as the primary contact for global HR assistance.
