Overview
Vietnam adds ~23% employer cost (social, health, unemployment, plus a mandatory 2% trade union fee). Foreign-invested LLC setup often takes 3–6 months. Fixed-term contracts convert to indefinite after two renewals. An EOR usually beats entity formation under ~10–15 employees. Confirm all-in pricing, entity ownership, and offboarding terms in writing before you sign.
Mid-level developers in Ho Chi Minh City often land near USD 15,000–30,000/year, well below Singapore or Seoul, while statutory load sits near ~23–24% of gross. That is not the cheapest SE Asia employer % (Thailand is far lower), but the engineering pipeline compensates.
Foreign ownership is allowed in many sectors yet gated by investment certificates and sector caps (retail, education, media, telecom, logistics). Even unrestricted software LLCs need investment registration, tax registration, banking, and social insurance filings across agencies. Legal/admin setup commonly runs ~USD 5,000–15,000 before the first hire. EOR uses an existing Vietnamese entity, remits SI/HI/UI, withholds PIT (5–35% progressive), and can sponsor work permits.
For SE Asia operating detail, see eor.asia’s Vietnam guide.
Ho Chi Minh City and Hanoi dominate professional hiring; Da Nang appears for cost-sensitive pods with thinner senior depth. Vietnamese-language contracts govern, bilingual originals are fine, and internal labor regulations should be registered if you want performance-based exits to be defensible. Companies that skip ILR registration discover it only when they try to terminate.
Foreign-invested entity timelines of 3–6 months are not a paperwork myth: investment registration, enterprise registration, bank account, tax code, and social insurance enrollment each can stall independently. EOR compresses that to days for local hires and weeks for work-permit cases.
Key Employment Facts
| Item | Detail |
|---|---|
| Minimum wage | VND ~3,700,000–5,310,000/month by region (Region I highest; from 1 Jan 2026) |
| Working hours | 8 hrs/day, 48 hrs/week; OT caps ~40 hrs/month, ~200 hrs/year (~300 special cases) |
| Probation | 6–60 days by role (up to 60 days for college-degree roles) |
| Notice | 45 days indefinite; 30 days fixed-term 12–36 months; 3 days under 12 months |
| Severance | 0.5 month/year for pre-2009 service; post-2009 years generally via unemployment insurance |
| Paid leave | 12 days minimum; +1 day per 5 years’ service |
| Public holidays | 11 days including Tet (~5 days) |
| Employer costs % | ~17% SI + 3% HI + 1% UI + 2% trade union ≈ ~23% |
| Tet bonus | Not statutory; market expects ~1–2 months |
Employer Cost
| Contribution | Rate | Cap / Notes |
|---|---|---|
| Social Insurance (SI) | 17% | Salary + salary allowances; cap ~20× base salary (recently VND 36,000,000/month; verify) |
| Health Insurance (HI) | 3% | Same contribution base as SI |
| Unemployment Insurance (UI) | 1% | Cap ~20× regional minimum wage |
| Trade Union Fee | 2% | On total payroll; owed whether or not staff are union members |
Budget the 2% union fee. Foreign CFOs miss it constantly. Worked shape: on VND 40,000,000 gross, statutory employer lines alone approach ~VND 9.2M before EOR fees and before Tet bonus provisioning. Private medical top-ups (PVI, Bao Viet, etc.) often add VND 3–10M/employee/year for tech hiring competitiveness.
Cap effects matter for high earners: SI uses a contribution ceiling (verify current multiple of base salary), while the 2% trade union fee still applies on payroll. Model senior seats with ceilings so you do not over-accrue. Tet bonus cash timing (1–2 months before lunar new year) creates a working-capital spike your finance calendar should show explicitly.
Private health top-ups of a few million VND per year are small versus salary but large versus candidate perception. Public HI access alone rarely wins competitive tech offers in HCMC.
Statutory Benefits
SI (~17% employer / ~8% employee): sickness, maternity, pension, survivors. Sickness benefits are largely fund-paid after short employer bridges depending on tenure. Maternity: 6 months at 100% via the SI fund (employer cash-flow friendly vs countries where the employer carries full pay). Paternity ~5–14 days via SI.
HI (3% / 1.5%): public hospital access; private top-up expected in tech. UI (1% / 1%): after 12+ contribution months, involuntary exits can claim ~60% of recent average salary for 3–12 months depending on contribution history.
Annual leave: 12/14/16 days by working-condition class, plus tenure bumps. Payout on termination is mandatory for unused statutory leave. Tet bonus: if written into contracts or internal labor rules, it becomes enforceable.
Work Visas and Immigration
Almost all foreign employees need a work permit. Narrow exemptions exist (certain investors, diplomats, very short visits). Process:
- Labour needs assessment (Báo cáo nhu cầu) with provincial SLĐTBXH (~5–10 working days).
- Work permit filing with authenticated degree, police clearance, local medical check, contract (~15–25 working days).
- Temporary residence card after permit (~5–7 working days).
| Step | Authority | Time |
|---|---|---|
| Labour needs assessment | Provincial SLĐTBXH | ~5–10 working days |
| Work permit | Provincial SLĐTBXH | ~15–25 working days |
| Temporary residence card | Immigration Police | ~5–7 working days |
Plan ~6–10 weeks offer-to-start for foreign nationals. Local nationals through EOR typically onboard in ~5–7 business days. Contracts over 1 month must be written; Vietnamese text governs bilingual versions.
Fixed-term limit: max two consecutive terms up to 36 months each, then automatic indefinite conversion. Changing EOR does not reset the clock.
Choosing an EOR for Vietnam
Onboarding SLAs and work-permit ops differ sharply by partner quality. See Best EOR for Vietnam. Regional provider context: eor.asia.
Termination Rules
Labour Code 2019 lists exhaustive unilateral termination grounds. Outside those grounds, dismissal is wrongful regardless of “business need.”
Typical permitted grounds: repeated failure to complete work as defined in registered internal labor regulations; long illness beyond statutory thresholds; force majeure workforce cuts after exhausting remedies; restructuring/technology change with proper process; 5+ consecutive unauthorized absence days.
Notice: 45 days (indefinite), 30 days (12–36 month fixed-term), 3 working days (under 12 months).
Severance (trợ cấp thôi việc): 0.5 month per year for pre-1 Jan 2009 service. Post-2009 years are generally covered through UI compliance rather than classic severance. Most hires under 40 have zero pre-2009 tenure.
Wrongful dismissal: reinstatement plus ≥2 months’ salary, or if reinstatement is impractical, ≥2 months plus notice pay plus ordinary severance. A botched exit on a USD 2,000/month, 5-year employee can clear USD 4,000+ compensation quickly once notice and fees stack.
No termination during SI-covered sick leave (within limits), maternity leave, or occupational disease/injury treatment.
Wrongful dismissal math is asymmetric. Reinstatement plus at least 2 months’ pay, or cash substitutes when reinstatement is impractical, plus notice, plus any pre-2009 severance, adds up fast relative to Vietnamese wages. That is why mutual terminations with clear payment schedules are common once relationships sour.
Track fixed-term renewal counts in HRIS. The second renewal is a decision gate: convert knowingly or separate before indefinite status attaches. EOR changes do not reset the statutory clock.
Frequently Asked Questions
Can I terminate for poor performance?
Only with a paper trail tied to registered internal labor regulations: documented failures, warnings, and a real improvement window. “Not a culture fit” is not a legal ground. Expect 2–3 months to build a defensible file. Your EOR should own the dossier format.
How should I budget Tet and 13th-month pay?
Assume 1–2 months’ salary in cash timing before Tet for competitive tech offers. If the contract or ILR promises it, it is owed. Missing Tet pay is a retention event, not a soft perk discussion.
When does a Vietnamese LLC beat EOR?
Around 10–15+ employees with a multi-year plan, especially if you want high-tech park incentives (corporate tax can fall to ~10% for qualifying projects). Below that, 3–6 month setup and monthly SI/PIT choreography rarely beat EOR fees. Compare cost/talent shape with Philippines and Thailand.
Do fixed-term contracts avoid indefinite protection forever?
No. After two lawful fixed terms, the next engagement is indefinite. Do not try to “reset” via a new EOR entity. Track renewal #2 dates explicitly.
What is the real all-in % versus Thailand?
Vietnam’s ~23% statutory stack (including union fee) is much heavier than Thailand’s single-digit employer social burden. Vietnam often still wins on available engineering volume at a given English/product-engineering bar. Run total cost per merged PR, not headline social %.
Vietnam vs Philippines for English-first product support?
Philippines usually wins pure English customer support. Vietnam often wins engineering volume at a given cost for mobile and web delivery when Vietnamese-language management is available. Employer percentage is higher in Vietnam (~23% including union fee) than many PH social stacks, so compare fully loaded cost per successful hire, not headline wages. See Philippines.
Sources
Related Decision Pages
- Deel Review : Vietnam and SE Asia coverage
- Remote Review : Owned-entity compliance model
- Multiplier Review : SE Asia specialization
- Hiring in Thailand : Lower employer % alternative
- Hiring in Philippines : English-speaking APAC alternative
- Compare EOR providers
- Hiring your first international employee
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