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EOR vs PEO in Vietnam 2026: which model should you choose?

By Nguyễn Quốc Trung — Deputy General Director · Updated 2026-09-18

EOR and PEO are often used interchangeably, but in Vietnam they solve two genuinely different problems. Choosing the wrong one does not just cost money — it puts the employment relationship on the wrong legal footing. This guide compares them directly, gives a decision tree, and explains why the Vietnamese definition of PEO differs from the way the global market uses the word.

Key facts (2026):
- First decisive question: do you already have a Vietnamese entity? No → EOR. Yes → PEO.
- Second question: are you hiring Vietnamese or foreign staff? Vietnamese → EOR. Foreign → PEO.
- EOR: Nhân Kiệt is the legal employer. PEO: your company remains the legal employer.
- Cost: EOR is 8% of gross salary (floor VND 2,600,000, cap VND 5,200,000); PEO is priced per service in USD.

What is the difference between an EOR and a PEO?

The core difference is who is named as the legal employer. Under an EOR, the provider signs the employment contract and carries the full legal responsibility for the employment relationship, so you do not need a Vietnamese entity. Under a PEO, your company remains the legal employer and signs the contract directly while the provider handles only the administration — so you must already have an entity.

Should you choose an EOR or a PEO?

Answer two questions in order. One: does your company already have a Vietnamese entity? If not, a PEO is not available to you — only an entity with a presence in Vietnam can employ and sponsor a work permit — so the choice is an EOR (or incorporating). If you do, go to question two. Two: is the person you need to bring on Vietnamese or foreign? For Vietnamese staff your own entity can contract directly, or use labour formalisation if you want the obligations transferred; for foreign nationals choose a PEO, because the hard part is the work permit, the residence card and tax residency rather than the signing of a contract.

How do the costs compare?

The two models price in different units, so there is no single number that compares them. EOR is salary-based: 8% of gross salary per person per month, with a floor of VND 2,600,000 and a cap of VND 5,200,000, plus a deposit of one month's gross salary (refundable) from 1 October 2026, with no onboarding fee and no offboarding fee. PEO is priced per service in USD: work permit 650, Temporary Residence Card 450, entry visa 250, notarised translation from 260, and administration 35 per employee per month, inclusive of government fees and excluding 8% VAT. In short, EOR is a recurring cost proportional to salary, while PEO is front-loaded on the immigration paperwork and very light monthly.

Do the two models rest on different law?

Yes, and the difference is significant. There is no dedicated EOR law in Vietnam — the arrangement must sit inside labour sub-leasing (Articles 52–57 of the Labour Code 2019 and Decree 145/2020, limited to 20 job categories and a maximum of 12 months per worker under Article 53) or a service contract under the Commercial Law; if the structure is wrong, the client is penalised too, up to VND 100 million for organisations under Article 19(2) of Decree 283/2026/NĐ-CP. PEO, by contrast, rests on explicit rules: Decree 219/2025/NĐ-CP for work permits and the Law on Social Insurance 2024 with Decree 158/2025/NĐ-CP for foreign workers' insurance.

Why does the Vietnamese definition of PEO differ from the global market?

Internationally, PEO usually means a co-employment model for staff in general, and many global platforms use PEO and EOR as near-synonyms. In Vietnam, true co-employment barely exists in legal practice, so that usage misleads. Nhân Kiệt therefore defines the term narrowly and explicitly: PEO is administrative service for foreign nationals while the client remains the legal employer. When you compare quotes between providers, ask directly "who signs the employment contract" rather than trusting the PEO or EOR label on the brochure.

Can you move from an EOR to a PEO later?

Yes, and it is the natural path as a business grows. Early on, with no entity, an EOR gets Vietnamese staff working in 5–7 working days; once long-term investment is decided, you incorporate, move the employees onto contracts with your own entity, and from then on use a PEO for the foreign staff who need permits. One technical reason to plan this early: if your EOR arrangement sits inside the labour sub-leasing framework, each worker is capped at 12 months, so the transition has to be planned before that limit is reached.

Next step

Read each model in what is an EOR and what is a PEO, see the detailed pricing in EOR pricing and PEO cost, or go straight to the EOR Vietnam service page. To get a recommendation for your specific case, call +84 908 636 108 (Mr Trung) or +84 28 3505 4224. This is general information, not legal advice.

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