Employer Of Record in Vietnam

We make it easy and painless to expand your business into Vietnam. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.

Accelerate your growth into Vietnam Compliantly and hassle-free

At Serviap Global we handle all employee onboarding, payroll, compliance, risk, mitigation and benefits, so you can focus on what matters most – your business.

How we can help you expand in Vietnam

As your EOR in Vietnam we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.

Your candidate is hired by a PEO in Vietnam provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

Expand to Vietnam with Serviap Global

Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity.

In just a few days, you can easily and safely build a presence in Vietnam being sure that your staff will be hired in compliance with labor and tax regulations.

Quick Facts

Currency:
Vietnamese Dong (VND)

Capital:
Hanoi

Payroll Cycle:
Monthly

Language(s):
Vietnamese

Vietnam Country Facts

Vietnam was inhabited as early as the Paleolithic age, with the first known nation forming in the first millennium BC. Many other countries ruled Vietnam at one time, which has contributed to the various influences over the country’s policies and culture. War ravaged the country in the mid-1900s, with different countries ruling and influencing fighting.

The country was reunified as a socialist state in 1976 many reforms were necessary in the 1980s, though, after poor decisions ravaged the economy. Today, it’s growing fast and is emerging among other developed nations.

The Economy

Vietnam’s economy is traditionally based in agriculture. Its main crop is wet rice. Mining is also an important industry, with Bauxite — vital in the production of aluminum — being mined in the center of the country.

In 1986, the country instituted a socialist-oriented market mechanism. The reforms allowed Vietnam’s economy to grow at an annual GDP rate of 8% from 1990 through 1997. Since 2000, the country has opened up its trade channels and is now growing fast. Goldman Sachs has estimated that Vietnam’s economy could become the 21st-largest in the world in the next few years.

The Importance of Small and Medium-sized Companies

Small and medium-sized companies (SMEs) are very important to Vietnam’s economy. They account for roughly 98% of all businesses in the country. They contribute 40% of the GDP and employ roughly 1.2 million people, which represents roughly half of all jobs. The country has almost 600,000 businesses, according to the Ministry of Finance, and nearly 500,000 of them are SMEs.

Population Characteristics

Vietnam’s population has grown exponentially since 1979, from 52.7 million that year to 95.5 million in 2018. Much of the population lives in rural areas, with only 34.4% living in what would be termed urban areas. A majority of the population (85.32%) is made up of the Viet or Kinh ethnic group. At the same time, there are 54 officially recognized ethnic groups in the country.

Economic Opportunities

Vietnam has successfully navigated out of the pandemic with its economy strong. Its main strength is derived from manufacturing, so much so it drove economic growth by 2.9% during the pandemic in 2020. In terms of foreign investment, many high tech companies invest here in Vietnam, alongside banking, and medical industries.

Key Sectors of the National Economy

While agriculture is the main driver of the Vietnamese economy, science and technology is also a big sector. Residents have made significant contributions to the fields of mathematics and science in recent years. Tourism is also a main sector of the economy, as it contributes roughly 7.5% to the country’s total GDP.

Human Talent

The Vietnamese government is pushing its students to study STEM fields. The country’s Fourth Industrial Revolution in 2017 also included new initiatives that would increase STEM education at both the high school and junior school levels.

Ho Chi Minh City, the “Silicon Valley of Vietnam”

Vietnam is planning three districts in Ho Chi Minh City that will help it become the Silicon Valley of Vietnam. It includes substantial planning and expenditures from the city, both of which are being supported by the Vietnamese government.

The overall plan will create an “innovative urban area” that will be home to high-tech enterprises. This will capitalize on the already existing District 9 high-tech park, as well as the university district in Thu Duc.

Technological Ecosystem

Vietnam has emerged in recent years as a hub for startups. In 2020 alone, there was an increase of $400 million USD in investments. Tech startups got a lot of investment, particularly between 2016 to 2019. Robust technical ecosystems have emerged in the sectors of information technology, food-tech, artificial intelligence, enterprise solutions and FinTech.

Facilities for Foreign Investment

Many reforms in Vietnam have focused on payment of taxes and access to credit. The government has been working hard to make it easier to do business in the country, and that has resulted in it climbing the World Bank rankings. Its recent Doing Business 2020 report ranked Vietnam as 70th among 190 world economies for the ease of doing business.

Business Culture in Vietnam

Vietnamese people prefer to conduct business in person rather than over the phone or online. They also prefer not to be cold called, but rather be introduced through a third-party or a common acquaintance.

The people there expect for meetings to have an agenda, even the first few meetings, which are typically more informal and are a get-to-know-you style. Be prepared to go through moments of silence during meetings. This is considered a period when people reflect on what’s being said. It’s considered rude to interrupt during these periods of silence.

Vietnam Gastronomy: regional and traditional cuisines

Vietnamese cuisine revolves around the “elements” of taste, which include sour, salty, sweet, spicy and bitter. The country’s common ingredients include soy sauce, fresh herbs, vegetables and fruit, shrimp paste, fish sauce and rice. Vietnamese cuisine is known for its use of fresh ingredients, with little to no use of oil, especially on vegetables.

General Highlights

Year	2022
Country	Vietnam
Capital	Hanoi
Num. States / Province	63 provinces
Principal Cities	Ho Chi Minh City (Saigon) Hanoi Da Nang Hoi An Nha Trang Mui Ne and Phan Thiet
Language	Vietnamese
Local Currency	Dong (VND)
Major Religion	Folk (45.3%)
Date Format	DD/MM/YYYY
Thousands Separator Format	999.999.999,99
Country Dial Code	+84
Time Zone	Vietnam Standard Time (UTC +7)
Population	96,208,984 (15th most)
Border Countries	North: China; West: Laos and Cambodia
Continental surface	331,699 KM2 (66th most)
Fiscal Year	January 1 to December 31
VAT %	10%
Minimum Wage	Minimum wage varies by region. There are four regional salaries, going from 3,070,000 VND to 4,420,000 VND
Taxpayer Identification Number Name in the country	Tax Code
Current President	Nguyen Xuan Phuc
Current General Secretary	Nguyen Phu Trong

What you need to know about employing personal in Vietnam:

Laws and Agencies that regulate labor relationships

Laws	Brief Description
Constitution of the Socialist Republic of Vietnam	Adopted in 2013, this is the document that contains all rules and regulations for how the government and its people run.
Labor Code	The document that dictates all the rules and regulations for employment in Vietnam. It was modified in 2021 to provide better protection for employees.
Tax Code	The law that governs how individuals and businesses are taxed in Vietnam.
Social Security	The overarching program that provides social security systems, including health insurance, unemployment insurance and social insurance.

Key Tax and Labor Authorities

The Ministry of Finance

The government entity responsible for all finances in Vietnam, including its tax revenue, national financial reserves, finances of state businesses and managing the budget.

Law on Social Insurance (Law No. 58/2014/QH13)

The law that dictates all social insurance programs in the country.

Labor Contracts

Labour Code 2019

(Also Decree 152/2020/ ND-CP)

The rules that dictate all employment activities in Vietnam for both residents and non-residents.

Contracts

Contracts can be either fixed-terms or indefinite. There’s no minimum for fixed-term, but they can’t be longer than 36 months.

Parties can only have two successive employment contracts that are fixed-term. If they want to continue with employment after this point, they must enter into an indefinite contract.

Work Hours

Employees in “normal working conditions” can’t work more than 8 hours

each day and 48 hours per week.

Employees in “hazardous, extremely heavy or toxic working conditions” are limited to 6 hours per day and 36 hours per week.

Basic Requirements

Labor Code dictates contracts must contain:

Employer’s name and address
Name and position of the person signing on behalf of the company
Full name, identity card number, passport number, date of birth, place of residence and gender of employee
Description of the work to be performed, including the job location and the term
Wages
Working hours, holidays and rest breaks
Personal protective equipment provided to the employee
Social, unemployment and health insurance provided to the employee
Training and skills improvement programs provided to the employee

Payroll

There are no specific rules that set how salaries must be paid. There must be an agreement between the em- ployee and employer, though. All salaries have to be made directly to the employee, in full and on time.

Legal Benefits in Vietnam

Profit sharing
Paid time off
Training and skills improvement
Health and social insurance
Retirement benefits
Personal protective equipment

Minimum Wage

Minimum wage varies by region. There are four regional salaries, going from 3,070,000 VND to 4,420,000 VND.

Untrained workers can’t be paid lower than these minimum wages. Trained

workers have to be paid at least 7% more than these minimums.

Wages

There are no specific guidelines for how payment must be made to the

employee.

Overtime

Overtime is capped at 40 hours per month, or 200 hours per year. Overtime pay is determined based on the following:

• On regular working days: at least 1.5 times the normal rate

• On the weekend: At least 2 times the normal rate

• On paid public holidays or paid annual leave days: At least 3 times the normal rate

Vacations or PTO

All employees are entitled to at least 12 days of annual leave that is paid, in addition to public holidays. Those working in toxic environments must get at least 14 days of paid leave annually.

Employees are also given an additional day of paid leave for every five

years that they work for an employee consecutively.

Leaves of Absence

Employees have the right to paid absences for the following things:

All employees are entitled to sick leave that is paid. The number of days available varies depending on how long the employee has paid into the social insurance premiums.

• Less than 15 years: 30 days

• 15-30 years: 40 days

• 30+ years: 60 days

All employees are paid 75% of their salary for paid sick leave.

Employers Contribution or Labor Cost
Employers are subject to taxes and other costs for having employees. Employers cannot recover these costs.

Annual Taxable Income
Vietnam has a progressive personal income tax that tops out at 35%. Non-residents are taxed at a flat rate of 20%.

Over this amount	Not over this amount	Tax % on Excess
0 VND	60,000,000 VND	5%
60,000,000	120,000,000	10%
120,000,000	216,000,000	15%
216,000,000	384,000,000	20%
384,000,000	624,000,000	25%
624,000,000	960,000,000	30%
960,000,000		35%

Corporate Tax Rates

Industry	Tax Rate
General corporate income tax	25%
Gas, oil and other precious natural resources	32% to 50% (project-dependent)

Types of Disabilities

Vietnamese residents must be assessed at a loss of work capacity of at least 61% to qualify for disability benefits. In addition, they must not qualify for a pension through social insurance.

Maternity Leave
Females are entitled to maternity leave of six months. Those who give birth to two or more children are enti- tled to one additional month of leave for each child from the second. Employees who adopt a child are also entitled to maternity leave until that child reaches 6 months old. The maternity leave payment will come in the form of a lump-sum that’s equal to two times their basic salary.

Fathers can take a leave as well. Within the first 30 days after birth, husbands can take a leave between 5 to 14 working days, depending on a number of conditions.

Public Holidays

Date	Holiday Name
January 1	New Year’s Day
January 31 to February 4	Tet
April 10	Hung Kings Commemoration Day
April 11	Hung Kings Commemoration Holiday
April 30	Reunification Day
May 1	Labor Day
May 2	Reunification Day Holiday
May 3	Labor Day Holiday
September 2	National Day

Termination

The Labor Code outlines rules for termination of an employment contract:

Type of Termination

Brief Description

No cause

Employers must provide notice to employees they intend to terminate. The time period is dependent on the type of contract.

Indefinite term: 45 days’ notice Fixed-term: 30 days’ notice

Contracts less than 12 months: 3 working days’ notice

Employee resigning

Employees who intend to resign also must submit notice to their employer.

Other forms of compensation upon termination include

Severance pay grades are based on the following table

Length of Employment	Severance Amount
At least 12 months	1.5 month’s wages for each year of employment

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Serviap was identified as a Professional Employment Organization that could hire an individual who has Mexican Customs and World Customs Organization experience and familiarity with the region. They were able to do so in short order, meeting our needs, our customer’s needs, and the expectations of the new employee.

Serviap has helped us in the most comprehensive and professional possible way, managing to adapt to the times that the company needs, collaborating with exceptional needs and always having the best disposition and relationship with the internal points of contact.

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