A practical Vietnam offshoring checklist for Singapore founders and CTOs covering structure, compliance, hiring, tax, costs and scaling.
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Singapore companies are increasingly adding employees in Vietnam to support engineering, shared services, and regional sales functions. Vietnam's young, capable labour force and competitive labour costs make it a natural extension for teams already operating across Southeast Asia.
But incorporating a local company takes months and imposes ongoing administrative obligations that may not align with the scale of an early team.
You can hire employees in Vietnam legally without setting up a company. The two primary routes are engaging an employer of record EOR, which creates a proper employment relationship under local labour laws, or selectively using independent contractors for short-term, project-based work.
Vietnam's Labour Code 2019 governs employment relationships, and recent reforms to the personal income tax regime (taking effect across 2026) and updated regional minimum wage rates mean the regulatory landscape continues to evolve.
This article takes an employer-first, practical view, grounded in Hyer Talents' 15+ years of experience in Vietnam hiring and workforce.
If you want to hire employees directly in Vietnam without your own legal entity, there are three approaches worth understanding. Each serves a different purpose, carries different risks, and suits a different stage of commitment.
This is usually the primary route for Singapore HQs wanting compliant, long-term full time employees with social insurance contributions, health insurance, and statutory benefits handled locally. The EOR becomes the legal employer on paper while your team directs day-to-day work.
Sometimes described as "staff outsourcing" or "payroll hosting," this is in practice the same as an EOR model when correctly structured. A trusted Vietnamese partner holds employment contracts, runs payroll, and manages mandatory contributions on your behalf.
Engaging contractors in Vietnam can work for short, defined-scope assignments. However, it does not create an employment relationship. Contractors are responsible for their own taxes in Vietnam and are not covered by the labor code's employment protections. Misclassifying contractors as employees can lead to fines in Vietnam, including back taxes and unpaid social insurance.
Establishing a limited liability company or wholly foreign-owned enterprise remains the right option once headcount and revenue justify the cost. That process is outside the scope of this article.
An employer of record in Vietnam is a locally registered entity that becomes the legal employer on paper for your staff.
The Singapore company retains full operational direction-setting objectives, managing performance, and integrating the employee into its workflows-while the EOR handles local compliance, payroll, and statutory obligations under Vietnam's labor laws.
In practice, the structure works as follows. The Singapore entity signs a service agreement with Hyer Talents. Hyer Talents then signs a Vietnamese labour contract with the employee, aligned with the Labour Code 2019.
The employee works exclusively for the Singapore client but is legally employed by the EOR entity. This means EOR services cover payroll, taxes, and employee benefits end-to-end.
Hyer Talents supports employment, payroll, and workforce management in Vietnam, including drafting labor contracts, processing mandatory contributions, coordinating with local authorities, and managing ongoing HR administration.
A Vietnam EOR must be properly licensed and registered locally, and must actually operate payroll and HR under local labor regulations and tax rules-not simply act as an invoicing pass-through.
Typical use cases for Singapore firms include testing a new market with a first salesperson in Ho Chi Minh City, retaining a key engineer who wants to relocate home to Vietnam, or building a small remote delivery team of three to five people before committing to entity setup.
Contracting through an EOR avoids permanent establishment risks when structured correctly.
The process from role definition to a productive first day follows a clear sequence. Here is what each stage looks like.
Start by defining the Vietnamese job title, responsibilities, and location. Whether the role is based in Ho Chi Minh City (Region I) or a smaller city affects the applicable regional minimum wage and cost benchmarks. Build a salary band in VND, then estimate the total cost by adding the employer's mandatory contributions (roughly 23.5% of gross salary) and the EOR service fee. For a mid-level software engineer in Region I with a gross pay of VND 30,000,000 per month, employer-side contributions alone amount to approximately VND 7–9.6 million before the EOR fee.
The Singapore employer either sources candidates directly through referrals, job boards, or executive search, or uses Hyer Talents' sourcing capability. Interviews are typically run over video, with in-country support available for senior or sensitive hires. Recruitment timelines vary by role seniority and market competition.
Once the Singapore company agrees on the package, Hyer Talents drafts a bilingual Vietnamese–English labour contract. Employers must provide employees with written contracts in Vietnamese that include job scope, salary, working hours, probationary terms, bonuses, and employment benefits. Employees must have a labour contract under Vietnamese law before starting work.
The EOR must register the employee with the local social insurance and tax authorities on or before the first working day. This includes registration for social insurance, health insurance, and unemployment insurance (for Vietnamese nationals). A local bank account is opened if the employee does not already have one for salary payments.
Each month, Hyer Talents processes payroll: calculating gross-to-net, withholding employee contributions, and remitting social and health insurance to the relevant funds. Employers must withhold personal income tax from employee wages monthly. The Singapore entity receives a single consolidated invoice in SGD or USD.
Role changes, salary reviews, and termination are managed jointly. Hyer Talents handles notice periods, severance pay calculations, and legal documentation, while the Singapore company manages performance discussions and commercial decisions.
The Labour Code 2019 is the main law governing employees in Vietnam. It applies fully whether you employ through your own entity or through an EOR.
Vietnamese labour laws require strict adherence to working hours, probation, and wage regulations-there are no shortcuts for foreign companies.
Every full-time employee must have a written labour contract in Vietnamese (often bilingual), signed before the start date. The contract must clearly state job title, salary, location, working hours, and benefits.
A fixed-term contract of up to 36 months or an indefinite-term contract are the standard options. Probation periods are permitted-up to 60 days for specialist roles requiring a college degree, and up to 180 days for certain managerial positions. During probation, the employee's salary must be at least 85% of the official rate.
Standard working time is 8 hours per day and 48 hours per week. In practice, many white-collar roles in Ho Chi Minh City operate on a 40-hour, Monday-to-Friday policy.
Overtime is capped at 200 hours per year for employees, with higher pay multipliers on weekdays, weekends, and public holidays. Your EOR partner will calculate and administer exact overtime pay in line with local laws.
Leave entitlements are significant. Employees in Vietnam are entitled to at least 12 days of paid annual leave after one year of service. Vietnam has 11 paid public holidays each year, including the Tết holiday. Maternity leave in Vietnam lasts up to six months at full pay, funded through the social insurance fund.
Sick leave is also covered by social insurance. All of these entitlements must be reflected in EOR-managed contracts. Employers must pay a Tet bonus, typically one to three months' salary-this is a deeply embedded workplace norm, not a legal minimum, but employees expect it, and it is standard practice.
The total cost of a full-time employee in Vietnam is base salary plus employer-side mandatory contributions and payroll taxes. An EOR calculates and pays all of these locally, but Singapore decision-makers need to understand the structure to budget accurately.
Employer contributions total approximately 23.5% of gross salary. This covers social insurance (retirement, sickness, maternity, occupational accident), health insurance, unemployment insurance, and trade union fees.
Statutory contributions can add 30% to 35% to the base salary of local workers once all elements are included. These rates apply to the employee's salary up to a cap tied to 20 times the reference salary.
Employees also contribute from their salary-around 10.5% combined-comprising approximately 8% for social insurance, 1.5% for health insurance, and 1% for unemployment insurance.
Vietnam mandates a total social insurance contribution of 25.5% when both the employer and employee portions are combined. Social insurance contributions are mandatory for both employers and employees.
Personal income tax in Vietnam is progressive, with rates from 5% up to 35% for tax residents.
The updated PIT Law (Law No. 109/2025/QH15) takes effect in 2026, reducing the number of brackets from seven to five and increasing the standard deduction to VND 15,500,000 per month for the taxpayer.
Non-residents face a flat 20% rate on Vietnam-sourced employment income. Personal income tax PIT is withheld monthly by the EOR and remitted to tax authorities.
In practice, monthly payroll works as follows. Start from the agreed gross salary in VND. Subtract the employee's social insurance contributions (approximately 10.5%).
Deduct the standard personal income tax allowance and any dependent allowances. Apply the progressive personal income tax brackets to the remaining taxable amount. The result is the net pay deposited to the employee's bank account.
The minimum wage in Region I is VND 5,310,000 per month as of 2026 under Decree 293/2025, which serves as the legal floor and influences the bases for social insurance contributions.
For a foreign employee on EOR, the same framework applies, but with slightly different contribution rules-for example, no unemployment insurance in many cases-and careful residency and PIT tracking.
Singapore companies may place both Vietnamese nationals and foreign employees into Vietnam roles under an EOR. However, hiring foreign employees triggers immigration and work permit requirements that add time and documentation.
Work permits for foreigners must be processed before employment begins. The process involves several stages.
First, the local employer (the EOR entity) must file a demand justification with the provincial Department of Labour, Invalids and Social Affairs (DOLISA) at least 30 days before the intended start date.
Then, the work permit application is submitted; processing takes two to four weeks once the documents are complete. Employers must apply for work permits at DOLISA in Vietnam.
Foreign employees must obtain a work permit or exemption certificate to work in Vietnam. Eligibility categories include foreign experts, managers, and technical workers.
Typical documentation includes degree certificates, experience letters, police clearance, medical examination results, and legalised corporate documents. Work permits are valid for up to two years in Vietnam and can be extended.
Foreign workers then hold appropriate visas or temporary residence cards linked to their employer of record.
Certain foreign workers may qualify for work permit exemptions-for example, investors contributing capital above a set VND threshold, short assignments under 30 days per trip within annual limits, or spouses of Vietnamese nationals.
These exemptions should be reviewed on a case-by-case basis with Hyer Talents or local legal counsel.
The work permit and immigration file must run through the local employer (the EOR entity), not the Singapore parent. Getting this wrong leads to real penalties for both the employer and the employee, including possible deportation.
Vietnamese law draws a clear line between contractors and employees. Understanding this distinction matters, especially when you do not have a local company and are relying on an EOR or direct contractor engagement.
Independent contractors in Vietnam are governed by the Civil Code. They issue invoices or receipts, manage their own social and health insurance (if they opt in voluntarily), handle their own taxes, and do not receive statutory employment protections. Contractors typically work under service contracts, not labour contracts.
Full-time employees, by contrast, must be hired under a labour contract with mandatory benefits, social insurance contributions, paid annual leave, sick leave, and protection under the Labour Code 2019. Employees receive statutory benefits like paid leave and severance.
Misclassification is where the real risk sits. Local labour authorities may reclassify a "contractor" as an employee if the individual works fixed hours, under close supervision, using the company's tools, and exclusively for one client.
Employers face fines for misclassifying employees as contractors. Consequences include back taxes, unpaid mandatory social insurance contributions, penalties, and interest.
Hiring contractors makes sense for a short pilot project, a discrete consulting assignment, or ad-hoc specialist support. Hiring independent contractors carries lower cost but higher legal risk for ongoing roles.
An EOR-hired employee is the safer and more sustainable choice for any long-term role involving line management, access to internal systems, or daily collaboration with the Singapore team.
Hyer Talents can help convert high-value contractors in Vietnam into properly employed staff under the EOR model, reducing risk and improving retention without disrupting ongoing work.
For Singapore CFOs weighing the options, the comparison between EOR and entity setup comes down to total cost, time-to-hire, and operational flexibility at current scale.
EOR commercial models are typically structured as either a fixed monthly fee per employee or a percentage uplift on gross salary.
The fee covers payroll coordination, statutory filings, HR support, and ongoing workforce management. There is no upfront incorporation cost, no minimum capital requirement, and no need for a local director or annual audits.
Establishing a wholly foreign-owned enterprise in Vietnam involves registering with the authorities, meeting minimum capital requirements (industry-dependent), appointing local representatives, setting up accounting and payroll systems, and conducting annual audits.
Realistic lead times are three to six months, sometimes longer if the sector requires additional licensing. The ongoing cost of maintaining a local legal entity-accounting, compliance, office lease, local management-adds up quickly when you have fewer than ten staff.
Consider a practical example: a Singapore SaaS company wants to hire a three-person sales pod in Ho Chi Minh City to test the Vietnamese market over 18 months. Using an EOR, the team can be operational within weeks.
Total monthly cost is gross salary plus employer contributions plus EOR fee, invoiced in SGD. There is no entity setup, no local audit, and no wind-down cost if the pilot does not scale.
If the team grows and revenue justifies it, Hyer Talents can support an orderly migration to a local entity and direct employment.
Using an EOR lowers hiring and setup friction during the first one to ten hires. Lower labour costs in Vietnam already make the market attractive; avoiding premature entity setup preserves that advantage.
Permanent establishment (PE) is a tax concept that matters to every Singapore company hiring in Vietnam without a subsidiary. If Vietnam's tax authorities determine that your activities create a PE, your company may owe corporate income tax at 20% on profits attributable to Vietnam.
Common PE triggers include maintaining a fixed place of business in Vietnam, having employees or agents with authority to conclude contracts on behalf of the foreign company, and long-running projects on the ground.
If your Vietnam-based staff sign client contracts, accept orders, or issue invoices on behalf of Singapore HQ, those activities could create PE exposure.
Using an EOR does not automatically remove PE risk. What reduces risk is how authority, contracts, invoicing, and negotiations are structured and documented.
Key safeguards include avoiding the delegation of formal signing authority for client contracts to Vietnam-based staff, routing all revenue contracts through the Singapore entity, and ensuring the local team's role is clearly operational rather than representative.
Hyer Talents works with clients' tax advisers to structure roles and documentation in a way that is commercially practical while mindful of Vietnam's employment regulations and PE rules. This is not a topic for generic templates-it requires local expertise and case-specific analysis.
Hyer Talents operates as a boutique Vietnam workforce and EOR partner with executive-search discipline-not a generic volume recruiter or a self-service platform.
If you are a Singapore founder, GM, or HR lead ready to move, here is what to focus on in the next 30 days.
Start with an initial planning call to define role scope, location (Ho Chi Minh City, Hanoi, or elsewhere), reporting line, and target start date. Clarify whether the hire is a Vietnamese national or a foreign national, as this significantly affects timelines.
Build a clear cost estimate showing gross salary in VND, employer-mandated contributions, estimated withholding of personal income tax, and the EOR service fee, converted to SGD terms so finance can approve a single line item.
Align internal stakeholders-finance, tax, legal-on PE considerations, contract authority limits, and whether this is a one-off pilot or part of a broader Vietnam strategy. Tax incentives for certain sectors may also be worth exploring with your advisers.
Once internal approval is in place, Hyer Talents can support recruitment or take over only the employment and payroll layer if the Singapore company already has a preferred candidate.
Using an EOR allows hiring of Vietnamese nationals in about a week once contracts are signed and documents are ready.
Prioritise clean documentation and realistic timelines. Good execution on the first hire sets the standard for everything that follows.
The following questions address issues commonly raised by Singapore-based leaders that are not fully covered in the main sections above.
No. The Singapore or US company does not need a Vietnamese bank account, tax code, or labour registration when using an EOR. Hyer Talents, as the local company and legal employer, holds all required registrations and interfaces with local authorities.
The employee is paid in VND from the EOR's bank account. The Singapore entity pays Hyer Talents a single consolidated invoice, typically in SGD or USD, under the service agreement.
For a Vietnamese national with documents ready, expect one to two weeks from final offer to start date. For hiring foreign employees, allow four to eight weeks due to work permit and visa processing.
Recruitment, time-sourcing, and interviewing are separate and can add two to six weeks, depending on role seniority and market competition, particularly for technology and commercial roles in Ho Chi Minh City.
Yes. Equity incentives from a Singapore or global plan are commonly layered on top of a Vietnam labour contract. The equity plan is governed by Singapore (or parent company) rules, while cash salary, mandatory benefits, and annual leave run through the EOR payroll.
Employees may have separate PIT reporting obligations for equity gains in Vietnam, and Hyer Talents can coordinate with your tax advisers to ensure employees receive clear guidance on their own tax obligations related to equity.
Probation terms comply with the Labour Code 2019 and are set out in the EOR contract. For specialist roles requiring a college degree, probation can last up to 60 days; for certain managerial positions, up to 180 days.
During probation, salary is typically at least 85% of the official rate, and either side can end the relationship with shorter notice. Hyer Talents manages documentation and compliance, while the Singapore manager leads performance feedback.
Employees can be transitioned from the EOR to your new Vietnamese entity through a structured process: resignation from the EOR, new contracts with the subsidiary, and continuity of social insurance records where possible.
Hyer Talents can plan this migration to minimise disruption, align effective dates, and avoid gaps in social insurance contributions or employment history for your Vietnamese employees. Many foreign businesses start with EOR and graduate to their own entity once the team and local revenue reach a scale that justifies the investment.
A practical Vietnam offshoring checklist for Singapore founders and CTOs covering structure, compliance, hiring, tax, costs and scaling.
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