Are you considering expanding your business into Vietnam's rapidly developing market without establishing a legal entity? Vietnam's competitive manufacturing base, young workforce, and emerging economy make it an attractive destination for international businesses—but navigating its particular employment regulations can be intricate. This is where an Employer of Record (EOR) service becomes your strategic entry solution. An Employer of Record in Vietnam enables your company to hire local talent legally and compliantly without setting up a subsidiary, saving you considerable time and significant incorporation expenses. From managing payroll and ensuring tax compliance to administering employee benefits according to Vietnam's Labor Code, an EOR solution offers the practical approach for exploring the Vietnamese market or building dedicated teams with skilled local professionals. In this comprehensive guide, we'll explore everything you need to know about using an Employer of Record in Vietnam, including essential benefits, compliance considerations, and important factors for selecting the right EOR partner that aligns with your business expansion objectives.
Business culture in Vietnam
Business culture in Vietnam is characterized by relationship-building, respect for hierarchy, and indirect communication that shape workplace interactions. Unlike Western business cultures that often value directness and quick results, Vietnamese business relationships develop slowly and require patience. Understanding these cultural elements helps international managers build trust and avoid misunderstandings with Vietnamese colleagues.
Communication
In Vietnam, business communication tends to be indirect with an emphasis on harmony and saving face. Vietnamese professionals often avoid saying "no" directly and may use phrases like "we will try" or "it might be difficult" instead of outright refusal. Non-verbal cues such as slight nods or smiles may signal disagreement, so pay attention to body language.
Hierarchy
Workplace hierarchy in Vietnam typically follows a top-down structure which influences decision-making and reporting relationships. Senior leaders make most decisions, and employees show great respect to those in authority. Age and experience are highly valued, so younger managers may need to work harder to establish credibility.
Relationships
Professional relationships in Vietnam are built through shared meals, social gatherings, and patient relationship development. Business partners often spend time getting to know each other before discussing business matters. Trust is essential and often comes before contracts or formal agreements.
Practical applications
When working with colleagues in Vietnam, international managers should invest time in relationship-building to establish trust. Schedule informal meals or coffee meetings before jumping into business discussions. Allow extra time for decisions, as Vietnamese teams may need to consult with senior leaders before committing. Show respect by addressing people using their title and last name until invited to use first names. These adaptations will help you develop productive and respectful working relationships with your Vietnamese colleagues.
Vietnam employment market overview
The Vietnam employment market is characterized by rapid growth, digital transformation, and evolving skill demands that shape hiring opportunities and challenges. Vietnam's job market is growing in technology, manufacturing, and renewable energy sectors, with a 2.3% unemployment rate. Companies are expanding recruitment efforts, with 57% planning to hire new employees in Q2/2025.
Talent availability
Skilled professionals in Vietnam are abundant in manufacturing and sales but limited in specialized tech roles with only 400,000 IT workers against growing demand. The talent gap is most pronounced in emerging fields like AI, cybersecurity, and sustainable development.
Key industries
Vietnam's strongest employment sectors include technology, manufacturing, renewable energy, and retail which offer opportunities for international companies. Industrial hubs like Bac Giang, Hai Phong, and Binh Duong are seeing large-scale recruitment due to factory relocations by global companies.
Hiring seasons
The post-Tet period represents Vietnam's peak hiring season with over 50% of workers seeking new opportunities. Companies typically increase recruitment budgets during this time to address workforce shortages and compete for available talent.
Hiring implications
Companies hiring in Vietnam should partner with local recruitment agencies to access skilled professionals faster in competitive sectors. Businesses should also develop comprehensive training programs to address skill gaps while enhancing retention rates among current employees.
Companies hiring in Vietnam should offer competitive compensation packages with 5-6% salary increases and enhanced bonuses to attract and retain talent in a market where job mobility is high.
What are the benefits of using an EOR in Vietnam?
The key benefits of using an Employer of Record (EOR) in Vietnam include quick market entry, simplified compliance, cost reduction, access to local expertise, and risk mitigation.
Here are the 5 benefits of using an EOR in Vietnam:
Quick market entry. An EOR lets you hire workers in Vietnam in just days or weeks. You don't need to set up your own company there, which can take months. This means you can start doing business in Vietnam much faster and test if the market works for your business.
Simplified compliance. Vietnam's labor laws are tricky and change often. An EOR handles all the complex rules about hiring, paying, and benefits for your workers. They make sure everything follows Vietnamese laws about contracts, taxes, and social security, so you don't get in trouble or face fines.
Cost reduction. Setting up your own company in Vietnam costs a lot of money for office space, legal fees, and staff. With an EOR, you only pay for the services you use. This saves you money, especially when you're just starting out or only need a few employees in Vietnam.
Local expertise access. EORs know how business works in Vietnam. They understand the culture and can help you avoid common mistakes. They also know how to find good local workers, especially in tech and manufacturing where Vietnam has many skilled people.
Risk mitigation. The EOR becomes the legal employer in Vietnam, not you. This means they handle any problems with work permits, employee disputes, or termination rules. If something goes wrong, the EOR deals with it, protecting your business from legal issues and keeping your reputation safe.