An Employer of Record (EOR) is a Vietnamese company that legally employs your staff while you manage their work. The EOR’s name is on the labour contract, the social insurance registration, the personal income tax filings and, for foreign employees, the work permit. You choose the people, direct the work and set the pay. In Vietnam the arrangement is often called payroll parking, and it is the fastest lawful way to have a team working in Ho Chi Minh City or Hanoi before your own company exists.
The one thing to check first in Vietnam
Vietnam regulates the supply of labour. Under the Labour Code 2019 a company may only place its employees with another business if it holds a labour outsourcing licence (labour leasing in some translations), issued to Vietnamese companies that meet capital, deposit and management conditions. Providers without it are operating outside the law, and if the arrangement is challenged the consequences fall on the client and the worker as well as the provider. Before anything else, ask to see the licence.
Why an EOR is useful in Vietnam
Setting up a foreign-invested company means an Investment Registration Certificate, then an Enterprise Registration Certificate, then tax registration, a seal, a bank account, a chief accountant and, for regulated activities, sub-licences. Two to four months is realistic before the first compliant labour contract can be signed. An EOR already has the licence, the registrations and the payroll, so a first hire can start within a week or two, and a foreign specialist’s work permit can begin immediately under the EOR’s sponsorship.
EOR, staffing agency or your own company
A staffing or recruitment agency finds candidates. Once you hire them they are on your payroll, or the agency’s for a short assignment. The agency’s role ends at placement.
An Employer of Record employs the people you have chosen, indefinitely, under its licence, and carries the employer obligations under the Labour Code, the Social Insurance Law, the Health Insurance Law, the Employment Law and the PIT Law. You direct the work.
Your own Vietnamese company gives you full control and is the right long-term home for a factory, a large office or a regulated activity.
Companies commonly use all three in turn: an agency to find the country head, an EOR to employ the first team, and a company of their own once the business case is proven, with the team transferring across.
What the EOR handles in Vietnam
- Contracts. Labour contracts that meet the Code: probation limits (60 days for most roles, 180 for managers, at least 85% of pay), at most two fixed-term contracts before an indefinite one, the 48-hour week, and 30 or 45 days’ notice depending on contract type.
- Insurance. Social, health and unemployment insurance at 17.5%, 3% and 1% from the employer and 8%, 1.5% and 1% from the employee, plus the 2% trade union fee, on the 2026 cap of VND 46.8 million; foreigners exempt from unemployment insurance.
- Tax. Monthly PIT withholding and annual finalisation, including the five-bracket schedule from 1 July 2026 and the VND 15.5 million personal deduction.
- Wages. Compliance with the Decree 293/2025 regional minimum wages (VND 5.31 million in Region I) and the trained-worker uplift.
- Work permits. Foreign labour demand approval, the permit under Decree 219/2025, and the LD visa and residence card; permits run up to two years, renewable once, with a 90-day annual exemption for short assignments.
- Benefits and administration. Thirteenth-month and Tet bonus administration, leave, medical insurance, payslips and claims through a self-service portal, with a Vietnamese-speaking HR contact.
- Exit. Notice, severance allowance and final settlement calculated to the Code.
The benefits, honestly stated
Legality comes first in Vietnam: a licensed EOR is the difference between a compliant structure and an exposure. Speed is second: weeks rather than months to the first hire. Compliance is third: Vietnam changed its minimum wages in January 2026 and changes its PIT brackets in July 2026, and an EOR absorbs those changes as part of the service. Cost is fourth: for up to fifteen or twenty staff, a monthly EOR fee is normally less than the entity, chief accountant and payroll officer you would otherwise need.
The trade-offs: an EOR is not the vehicle for a manufacturing plant, for a business that needs its own investment certificate to hold land or licences, or for a headcount that will quickly run into the dozens. In those cases, incorporate early and use the EOR as the bridge.
What is different about People Profilers’ EOR in Vietnam
People Profilers Vietnam is a licensed labour outsourcing provider operating from Ho Chi Minh City, alongside our offices in Singapore, Malaysia, Thailand and Indonesia. Employees sit under our Vietnamese headcount with full social, health and unemployment insurance and medical coverage, are paid through our cloud payroll platform with self-service payslips, leave and claims, and have a Vietnamese-speaking HR contact. A client hiring in Vietnam and Singapore, or Vietnam and Thailand, gets one contract, one monthly cycle and one invoice.
Read more about our Employer of Record services in Vietnam and work permit services in Vietnam, or contact People Profilers Vietnam.
