How to Hire Employees in Vietnam Without Setting Up a Company

Hiring talent in Vietnam is attractive for many foreign companies—but setting up a legal entity isn’t always the right first step.
Fortunately, it is fully possible to hire employees in Vietnam without establishing a local company, if you choose the right hiring model.

This guide explains how it works, what’s legal, what’s risky, and which option fits your business best.

Can You Hire Employees in Vietnam Without a Legal Entity?

Yes — but not directly.

Under Vietnamese labor law, a foreign company cannot legally employ local staff without a registered legal presence in Vietnam.
However, there are two common indirect hiring models that make this possible:

Employer of Record (EOR) – legal and compliant
Independent Contractors – high risk and often misused

Understanding the difference is critical.

Option 1: Hiring Through an Employer of Record (EOR) in Vietnam (Recommended)

An Employer of Record (EOR) is a local Vietnamese company that legally employs workers on your behalf, while you retain full control over their daily work.

How EOR Works in Practice

The EOR signs the employment contract with the employee
The EOR manages payroll, taxes, social insurance, and compliance
You manage tasks, KPIs, reporting lines, and performance
No Vietnamese entity is required on your side

This is the most widely used and legally safe option for foreign companies hiring in Vietnam without an entity.

Why EOR Is the Preferred Model

Fully compliant with Vietnam labor law
Fast hiring (often within 2–3 weeks)
Predictable monthly cost
No setup, licensing, or audit burden
Easy exit or scale-up

Employer of Record (EOR) in Vietnam: Complete Guide

Option 2: Hiring Independent Contractors in Vietnam (High Risk)

Some companies attempt to hire Vietnamese workers as independent contractors to avoid entity setup.

This approach is legally risky.

Why Contractor Hiring Is Problematic in Vietnam

Vietnam authorities focus on substance over form.
If a contractor:

Works full-time
Reports to your managers
Uses your tools
Is paid monthly
Has no independent clients

They may be reclassified as an employee.

Risks of Misclassification

Back payment of taxes and social insurance
Fines and penalties
Labor disputes
Reputational risk

👉 For long-term or full-time roles, contractor models are strongly discouraged.

Step-by-Step: How to Hire Employees in Vietnam via EOR

Step 1: Define the Role and Compensation

Clarify:

Job title and responsibilities
Salary range (gross)
Benefits expectations
Location (remote / city-based)

Vietnam salaries vary significantly by role and city.

Step 2: Select a Vietnam EOR Provider

Choose an EOR with:

Strong local compliance expertise
Transparent pricing
Vietnamese-language contracts
Payroll and tax reporting capability

This decision directly impacts your legal risk.

Step 3: Candidate Selection & Offer

You can:

Recruit candidates yourself
Use recruiters
Hire referrals

Once selected:

The EOR prepares a Vietnam-compliant employment contract
You approve compensation and benefits

Step 4: Contract Signing & Onboarding

Employee signs contract with the EOR
EOR registers employee with authorities
Payroll and insurance are activated
Employee starts work under your supervision

⏱ Typical timeline: 10–20 working days from offer to start date.

What the EOR Handles (So You Don’t Have To)

A professional EOR in Vietnam manages:

Employment & HR

Labor contracts
Probation periods
Amendments and renewals
Terminations (compliant process)

Payroll & Tax

Monthly payroll
Personal Income Tax (PIT)
Social, health, and unemployment insurance

Compliance

Labor law compliance
Statutory filings
HR documentation
Government reporting

This significantly reduces operational and legal burden for foreign companies.

Cost of Hiring Employees in Vietnam Without an Entity

Costs typically include:

Employee gross salary
Mandatory employer contributions
Monthly EOR service fee

Compared to entity setup:

No incorporation costs
No ongoing accounting & audit overhead
No minimum capital requirement

For small teams, EOR is often 30–50% more cost-efficient in Year 1.

EOR vs Company Setup in Vietnam: Cost, Risk & Control Compared

When Hiring Without an Entity Makes Sense

This model is ideal if you:

Are testing the Vietnam market
Need to hire 1–20 employees
Are building sales, tech, or support teams
Want flexibility and speed
Plan to convert to an entity later

Many companies use EOR as Phase 1, then transition once revenue or headcount grows.

When You Should Consider Setting Up a Company Instead

Entity setup may be better if you:

Need business licenses
Sign contracts locally
Import/export goods
Hire large teams long-term
Apply for incentives or land use rights

EOR and entity setup are not competing options—they are often sequential stages.

Common Mistakes Foreign Companies Make

❌ Hiring contractors who are actually employees
❌ Using overseas contracts for Vietnamese staff
❌ Ignoring mandatory insurance contributions
❌ Underestimating termination complexity
❌ Choosing EOR providers without local legal depth

Each mistake can lead to compliance penalties and disputes.