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What is an EOR? Employer of Record in Vietnam explained
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By Nguyen Quoc Trung — Deputy General Director · Updated
EOR stands for Employer of Record — a local company that becomes the legal employer of your staff on your behalf. It is how a foreign company hires and pays Vietnamese employees lawfully without first setting up a Vietnamese entity. This guide explains the model, the framework Vietnam actually applies, the published cost, and when an EOR is the right choice.
Key facts (2026):
- An EOR becomes the legal employer; it is for companies with no Vietnamese entity hiring Vietnamese staff.
- Vietnam has no dedicated EOR law — the arrangement must sit inside labour sub-leasing or a commercial service contract.
- Nhan Kiet fee: 8% of gross salary per person per month, floor VND 2,600,000, cap VND 5,200,000; deposit of one month's gross salary (refundable) from 1 October 2026.
- Staff can start in 5–7 working days instead of the 2–6 months it takes to incorporate.
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.
Volume pricing, locked for 12 months and no back-charge if hiring plans change:
| Commitment within 12 months | Fee per person per month | Floor and ceiling |
|---|---|---|
| Up to 10 people | 8% of gross salary | VND 2,600,000–5,200,000 |
| More than 10 people | 7% of gross salary from the first person | VND 2,600,000–5,200,000 |
| More than 30 people | 6% of gross salary from the first person | VND 2,600,000–5,200,000 |
Updated 12 October 2026: added a worked cost example, the risks and limits of an EOR, a comparison with other hiring models, and why an EOR costs more than payroll outsourcing.
What is an EOR?
An EOR (Employer of Record) is a local legal entity that acts as the official employer for the people you choose. The EOR signs the employment contract directly with each worker, pays compulsory social insurance, registers and remits personal income tax, runs monthly payroll, and carries the legal responsibility for that employment relationship. Your company signs a service agreement with the EOR and still decides who to hire, what to pay them, and what they work on.
How does an EOR work in practice?
You choose the person, the EOR employs them formally, and you reimburse the cost monthly. The sequence is usually: you select the candidate and the salary, the EOR signs the employment contract and registers insurance, the person starts working for you, each cycle you pre-fund payroll and statutory contributions, and the EOR pays your people in full and on time and then invoices its service fee. All the statutory records — contract, labour management book, payslips, annual leave — are kept by the EOR in the form the law requires.
Does Vietnam have a dedicated EOR law?
No — and this is the most important point most international providers gloss over. Vietnam has no legislation written for EOR, so an EOR arrangement must fit entirely inside one of two existing frameworks:
- Labour sub-leasing — Articles 52–57 of the Labour Code 2019 and Decree 145/2020/ND-CP. The client directs the work; it is limited to the 20 job categories in Appendix II and to a maximum of 12 months per worker under Article 53. The provider must hold a sub-leasing licence.
- A service contract under the Commercial Law — Nhan Kiet assigns, manages and supervises the staff; there is no time limit, but the client does not direct each person the way it would its own employee.
Choosing the wrong framework is a risk for both parties: the client is penalised directly too, up to VND 100 million for organisations under Article 19(2) of Decree 283/2026/ND-CP, which replaced Decree 12/2022/ND-CP from 10 September 2026. So the applicable framework has to be settled before signing, not after an inspection.
How much does an EOR cost in Vietnam?
Nhan Kiet's service fee is 8% of gross salary per person per month, with a floor of VND 2,600,000 (about USD 99) and a cap of VND 5,200,000 (about USD 199) per person per month. From 1 October 2026 there is also a deposit of one month's gross salary per employee, refundable when the contract ends and accounts are settled; there is no onboarding fee and no offboarding fee. On top of the service fee the employer bears salary and the employer-side statutory contributions for Vietnamese staff, which come to 23.5% (21.5% insurance plus 2% trade-union funding). A breakdown at different salary levels is in EOR pricing in Vietnam.
When should you use an EOR instead of incorporating?
Use an EOR when you need people working quickly and are not yet certain about long-term scale in Vietnam. Setting up your own entity normally takes 2–6 months and brings maintenance, accounting and reporting costs with it; through an EOR staff can start within 5–7 working days. The clearest fits are remote engineering teams, market-entry pilots, 6–24 month project teams, and the waiting period before an investment licence is granted. If you have already committed to long-term investment and will hire dozens of people, your own entity is usually cheaper on a total-cost basis.
How is an EOR different from a PEO?
An EOR is for companies that do not yet have a Vietnamese entity, while a PEO requires you to already have one and you remain the legal employer. The second difference matters just as much: at Nhan Kiet, EOR serves Vietnamese employees, while PEO serves foreign nationals who need a work permit and a residence card. They solve different problems — the full comparison with a decision tree is in EOR vs PEO in Vietnam, and the PEO model is explained in what is a PEO.
What should you check before choosing an EOR provider?
Check the licences, which legal framework they will apply, and how transparent their pricing is. A credible provider can show a labour sub-leasing licence and an employment-services licence, will tell you plainly which of the two frameworks above your arrangement sits in, and publishes prices rather than only "contact us". Nhan Kiet holds a labour sub-leasing licence (No. 15/2019/SHCM) and an employment-services licence (No. 22139/2023/45/SLDTBXH-VLATLD) issued in Ho Chi Minh City, and is certified to ISO 9001:2015, ISO 45001, ISO 14001 and ISO/IEC 27001:2022.
Can you give an example of how an EOR works?
A Singapore software company with no Vietnamese entity hires one backend developer in Ho Chi Minh City on a gross salary of VND 30,000,000 a month through Nhan Kiet. As with most remote engineering roles, the hire runs under the service-contract route rather than labour sub-leasing, so the 12-month limit does not apply. Nhan Kiet signs the employment contract, registers the personal tax code and social insurance, and the developer starts within 5–7 working days. Each month the company pre-funds a single invoice:
| Item | VND per month |
|---|---|
| Gross salary | 30,000,000 |
| Employer statutory contributions (23.5%) | 7,050,000 |
| Nhan Kiet service fee (8% would be 2,400,000, so the 2,600,000 floor applies) | 2,600,000 |
| VAT 8% on the whole invoice | 3,172,000 |
| Total payable | 42,822,000 |
The developer's own 10.5% insurance and personal income tax are deducted from the gross salary, so take-home pay is lower than VND 30,000,000. A deposit equal to one month's gross salary (VND 30,000,000) is held and refunded when the contract ends and accounts are settled. Totals for other salary levels are in EOR pricing in Vietnam.
What are the risks and limits of using an EOR in Vietnam?
An EOR is lawful in Vietnam only inside the framework it runs under, and most problems come from ignoring those limits:
- Labour sub-leasing route: only the 20 jobs listed in Appendix II of Decree 145/2020/ND-CP, and no more than 12 months per worker (Article 53, Labour Code 2019).
- Service-contract route: no time limit, but your managers should not direct each person as if they were your own employees — Nhan Kiet manages and supervises them.
- Penalties reach the client too: an organisation that uses sub-leased labour unlawfully can be fined up to VND 100 million (Article 19(2), Decree 283/2026/ND-CP).
- Tax exposure: if people in Vietnam habitually conclude contracts on your behalf, your company may create a permanent establishment — see does a Vietnam EOR create a permanent establishment.
- Intellectual property and confidentiality: ask for IP-assignment and confidentiality clauses in the employment contract; Nhan Kiet adds the terms you specify.
- Personal data: employee records sent abroad fall under the Personal Data Protection Law No. 91/2025/QH15 from 1 January 2026 — see cross-border data transfer through an EOR.
How is an EOR different from payroll outsourcing, a PEO or a staffing agency?
An EOR is the only one of these models in which the provider becomes the legal employer and you need no Vietnamese entity. With payroll outsourcing or a PEO your own company stays the employer, and a staffing agency supplies workers to a business that already operates in Vietnam.
| Model | Legal employer | Own Vietnamese entity needed? | Best for |
|---|---|---|---|
| EOR | Nhan Kiet | No | Hiring Vietnamese staff before, or instead of, incorporating |
| Payroll outsourcing | Your company | Yes | Keeping your own employees while outsourcing payroll, tax and insurance |
| PEO for foreign staff | Your company | Yes | Foreign nationals who need a work permit and a residence card |
| Staffing / manpower supply | Nhan Kiet | Usually yes | Large numbers of factory and general workers |
| Your own entity | Your company | Yes — 2 to 6 months to set up | Long-term plans and a larger headcount |
Why does an EOR cost more than payroll outsourcing?
An EOR costs more because the provider becomes the legal employer and carries the employment liability, while payroll outsourcing only processes payroll for people your company already employs. At Nhan Kiet, payroll outsourcing is VND 250,000–900,000 (about USD 10–35) per employee per month, while the EOR fee is 8% of gross salary with a floor of VND 2,600,000 and a cap of VND 5,200,000. If you already have a Vietnamese entity, payroll outsourcing is the cheaper option; if you do not, an EOR is usually far cheaper than setting one up.
Next step
If you are weighing up hiring Vietnamese staff without an entity, see the scope and commitments on the EOR Vietnam service page, or the labour compliance model if the people already work for you and need to move onto compliant contracts. 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 a PEO? Professional Employer Organization explained · EOR vs PEO in Vietnam 2026: which model should you choose? · Local EOR Company vs Global EOR Platform in Vietnam (2026)
Legal sources
Official texts (in Vietnamese) on the Vietnamese Government's legal portals:
- Labour Code 2019 (No. 45/2019/QH14)
- Law on Personal Data Protection 2025 (No. 91/2025/QH15)
- Decree 283/2026/ND-CP: administrative penalties in labour and social insurance
- Decree 145/2020/ND-CP: guiding the Labour Code on working conditions and labour relations
Call +84 908 636 108 or see labour compliance, payroll outsourcing, EOR Vietnam.