Insights

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

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: Nhan Kiet 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.

Volume pricing: commit to more than 10 hires within 12 months and the fee is 7% of gross salary from the first employee; more than 30, 6%. The floor and cap stay the same, the price is fixed for 12 months, and nothing is charged back if your hiring plan changes.

Updated 12 October 2026: added which model suits a small business, the downsides of each, and what EOR and PEO stand for.

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.

How do the costs compare?

The two models price in different units, so there is no single number that compares them.

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/ND-CP. PEO, by contrast, rests on explicit rules: Decree 219/2025/ND-CP for work permits and the Law on Social Insurance 2024 with Decree 158/2025/ND-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. Nhan Kiet 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.

Is a PEO or an EOR better for a small business?

For a small foreign company with no Vietnamese entity, an EOR is the better fit: it needs no entity, gets Vietnamese staff working in 5–7 working days and costs 8% of gross salary per person, capped at VND 5,200,000 a month. A PEO only becomes an option once you have your own Vietnamese entity, and at Nhan Kiet it is designed for foreign staff who need a work permit and a residence card. In practice: a handful of Vietnamese hires and no long-term commitment yet — choose an EOR; an entity already in place and foreign managers to bring in — choose a PEO.

What are the downsides of an EOR and of a PEO?

Neither model is free of trade-offs: an EOR costs more every month and must stay inside its legal framework, while a PEO requires your own entity and leaves the employer's liability with you:

• EOR: the fee rises with salary up to the cap and continues for as long as the person stays; on the labour sub-leasing route each worker is limited to the 20 listed jobs and to 12 months; and because Nhan Kiet is the legal employer, contract changes go through Nhan Kiet.
• PEO: only available if your company already has a Vietnamese entity; your company remains the legal employer and carries the liability; and the work permit and residence card take several weeks and are paid up front (work permit USD 650, Temporary Residence Card USD 450 — see PEO cost in Vietnam).

What do EOR and PEO stand for?

EOR stands for Employer of Record and PEO stands for Professional Employer Organization. In Vietnam the practical difference is who signs the employment contract: under an EOR it is the provider, under a PEO it is your own company.

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.

See also: EOR services in Vietnam · What is an EOR? Employer of Record in Vietnam explained · How to choose a PEO provider in Vietnam 2026: a checklist · PEO in Vietnam: how the model works and when to use it

Legal sources

Official texts (in Vietnamese) on the Vietnamese Government's legal portals:

• Labour Code 2019 (No. 45/2019/QH14)
• Law on Social Insurance 2024 (No. 41/2024/QH15)
• Decree 283/2026/ND-CP: administrative penalties in labour and social insurance
• Decree 158/2025/ND-CP: guiding the Law on Social Insurance on compulsory social insurance
• Decree 219/2025/ND-CP: foreign workers employed in Vietnam

← All articles