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What is a PEO? Professional Employer Organization explained
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By Nguyen Quoc Trung — Deputy General Director · Updated
PEO stands for Professional Employer Organization — a provider that handles the administration of employment while your company remains the legal employer. In Vietnam the model is used mainly when a company already has a local entity and needs to bring in foreign experts, engineers or managers lawfully. This guide explains the model, the 2026 legal basis, the published per-service cost, and when to use it.
Key facts (2026):
- Under a PEO, the client (a Vietnamese entity) is the legal employer and signs the employment contract; the PEO handles permits, immigration, payroll, insurance and tax.
- It is for foreign nationals and requires you to already have a Vietnamese entity (unlike an EOR).
- Legal basis: Decree 219/2025/ND-CP for work permits, and the Law on Social Insurance 2024 with Decree 158/2025/ND-CP.
- Nhan Kiet prices each service separately: work permit USD 650, TRC USD 450, entry visa USD 250, monthly administration USD 35 per employee.
What is a PEO?
A PEO is a service model in which your company keeps the role of legal employer while an external specialist handles the administrative side of the employment relationship. Your Vietnamese entity signs the employment contract directly with the worker and decides salary, job title and day-to-day management. The PEO handles the work permit and immigration procedures, payroll, insurance registration and filing, personal income tax withholding and finalisation, and the periodic labour reports.
Who is a PEO for in Vietnam?
A PEO suits a company that already has a Vietnamese entity and needs to bring foreign nationals in for longer than a short business trip.
| Situation | Right approach |
|---|---|
| FDI group seconding a chief engineer or plant manager | PEO |
| Group rotating specialists between countries | PEO |
| Need one foreign hire working quickly without building an in-house immigration function | PEO |
| No Vietnamese entity | PEO does not apply: establish a presence, or use the EOR model for Vietnamese staff |
What does a PEO actually do?
A PEO covers the whole administrative lifecycle so your entity can stay the employer without staffing the function.
| Phase | What the PEO provider does |
|---|---|
| One-time setup | Preparing and filing the foreign-labour demand and approval, applying for the work permit under your entity's sponsorship, applying for the TRC, arranging the entry visa, notarised translation of documents |
| Monthly | Payroll calculation and disbursement support with electronic payslips, registration and monthly filing of social and health insurance, PIT withholding and annual finalisation, tracking permit and TRC renewals, bilingual employee support, monthly reporting to you |
What legal basis applies in 2026?
Work permits follow Decree 219/2025/ND-CP, in force from 7 August 2025, which fully replaced Decree 152/2020 and 70/2023; the permit is issued within 10 working days of a complete file, is valid for up to 2 years, and may be renewed only once under Article 155 of the Labour Code 2019.
| Social insurance for foreign workers | Rule |
|---|---|
| Legal basis | Law on Social Insurance 2024 (41/2024/QH15) and Decree 158/2025/ND-CP (replacing Decree 143/2018 from 1 July 2025) |
| Worker's contribution | 9.5% |
| Employer's contribution | 20.5% plus 2% trade-union fund, total 22.5% on top of salary |
| Unemployment insurance | None |
| Maximum contribution base | VND 50,600,000/month from 1 July 2026 |
What routes are there for bringing a foreign employee in?
There are two lawful routes, differing in risk and in how social insurance is treated.
| Criterion | Option 1 — work permit plus TRC | Option 2 — intra-corporate transfer (ICT) |
|---|---|---|
| Basis | Your Vietnamese entity sponsors the permit, standard process | Assignee moves within the corporate chain |
| Insurance | Employer bears the 22.5% statutory contributions | Exempt from Vietnam compulsory social insurance under Decree 158/2025; may keep home-country cover |
| Risk | Low | Higher: corporate chain must be proved with consular-legalised or, from 11 September 2026, apostilled documents; higher documentation cost |
The detail is in work permit exemption and intra-company transfer.
How much does a PEO cost?
Nhan Kiet prices each service separately so you pay only for what you need: work permit USD 650, Temporary Residence Card USD 450, entry business visa USD 250, notarised translation from USD 260, and PEO administration USD 35 per employee per month. These are inclusive of government fees, with only 8% VAT added. There is no fixed bundle — a company that already holds a visa and needs only the permit pays for that alone. The full menu with common combinations is in PEO cost in Vietnam.
What happens to tax after 183 days?
An assignee who stays in Vietnam more than 183 days in a 12-month period becomes a Vietnam tax resident and must declare and pay personal income tax in Vietnam. This holds even under Option 2, where payroll and social insurance may remain in the home country. A double-taxation agreement between Vietnam and the home country may relieve double taxation, subject to conditions. This is why a "keep everything offshore" plan does not work for a long assignment.
How is a PEO different from an EOR?
A PEO requires you to already have an entity and you remain the legal employer; an EOR is the opposite — it is for companies with no entity, and the provider is the employer. At Nhan Kiet there is a second difference: PEO serves foreign nationals, EOR serves Vietnamese staff. The full comparison with a decision tree is in EOR vs PEO in Vietnam; the EOR model is explained in what is an EOR.
PEO vs EOR vs staffing agency: which is which?
The three models differ by who the legal employer is: under a PEO your own Vietnamese entity employs the worker and the provider runs the administration; under an EOR the provider is the legal employer of staff who work for you; and a staffing agency both employs and supplies workers — typically at volume — under its own licence. Picking between them is therefore not a price question first, but a structure question.
| Model | Legal employer | Typical use in Vietnam | Do you need an entity? |
|---|---|---|---|
| PEO | Your Vietnamese entity | Foreign experts and managers at a company that already has an entity | Yes |
| EOR | The provider | Vietnamese staff for a foreign company with no entity | No |
| Staffing agency (manpower supply, labour sub-leasing) | The provider | Blue-collar and volume workforce, recruitment included | No |
In practice two questions decide it: does your company already have a Vietnamese entity, and are you hiring Vietnamese nationals or foreign nationals?
| Situation | Route |
|---|---|
| Have an entity, hiring foreign nationals | PEO |
| No entity, hiring Vietnamese | EOR |
| Need a large recruited workforce | Staffing agency |
Does PEO mean the same thing in Vietnam as in the US?
No — in the United States a PEO typically works under a co-employment arrangement, sharing employer responsibilities with the client, while Vietnamese law has no co-employment status: the client's entity remains the sole legal employer, and in Vietnam "PEO" is used as a label for a service that runs the employment administration on that entity's behalf. The same word therefore describes two different legal structures.
The practical consequence: a US-style co-employment PEO cannot be bought in Vietnam. What is sold under the PEO label here is administrative — work permits, immigration, payroll, insurance and personal income tax — for foreign employees of your own entity, while hiring without an entity is the EOR model, and the two should be compared as different products rather than different prices for the same thing.
Next step
See the service scope, both routes and all conditions in PEO in Vietnam. Nhan Kiet Supplying Manpower Co., Ltd (tax code 0308022768, established 2009) holds a labour sub-leasing licence (No. 15/2019/SHCM) and an employment-services licence (No. 22139/2023/45/SLDTBXH-VLATLD), and is certified to ISO 9001:2015, ISO 45001, ISO 14001 and ISO/IEC 27001:2022. To discuss a 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 · PEO in Vietnam 2026: how the model works and when to use it
Update 12/10/2026: added a three-way comparison of PEO, EOR and staffing agencies, and the difference between the US and Vietnamese meanings of PEO.
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 158/2025/ND-CP: guiding the Law on Social Insurance on compulsory social insurance
- Decree 219/2025/ND-CP: foreign workers employed in Vietnam
Call +84 908 636 108 or see labour compliance, payroll outsourcing, EOR Vietnam.