EOR, Outsourced Payroll, Your Own Entity or Contractors? How to Employ People in Vietnam

A business that wants people working in Vietnam has four common routes:

1. An Employer of Record (EOR) employs the people for you. You need no Vietnam company.
2. Your own Vietnam entity, with payroll run by your own team.
3. Your own Vietnam entity with Outsourced Payroll Services: your company is the employer, and a provider runs payroll, personal income tax (PIT) and statutory insurance.
4. Independent contractors work for you under a service contract, not an employment contract.

Each suits a different situation. The right one depends less on the fee than on four questions: what you will actually do in Vietnam, how independent the work is, whether you already have an entity, and how many people you expect to employ, for how long.

The four routes at a glance

Question 1: What will you actually do in Vietnam?

Start here, because it can settle the question before cost comes into it.

An EOR covers employment only. It lets you employ people in Vietnam; it does not give your business a presence of its own there. If you plan to sign contracts with Vietnamese customers, issue invoices, import goods, lease premises in your own name or carry on an activity that needs a licence, you will need your own entity, whatever the size of the team.

If the people you employ will support your business from Vietnam (engineering, design, customer support, regional sales support, operations), an EOR can be enough, at least to start.

Two points to check with your advisers before relying on an EOR for a longer period:

• Tax presence. Depending on what your people do, activity in Vietnam can create a taxable presence for your company. Roles that negotiate or conclude contracts for you deserve a closer look. This is a tax question for a qualified tax adviser, not an employment one.
• Intellectual property. Under an EOR, the employment contract is between the EOR and the employee. Check that both the service agreement and the employment contract deal with confidentiality and the transfer of work product and intellectual property to your company.

Question 2: Is the work genuinely independent?

Contractors look like the cheapest route: no employer contributions, no payroll and no employment contract. The relationship has to be real, though.

Under Article 13 of Vietnam's Labour Code, an agreement under which a person works for pay, under the management and supervision of the other party, is treated as an employment contract whatever it is called. A document titled "service contract" does not change that.

The arrangement is more likely to be employment if the person:

• works fixed hours set by you;
• reports to one of your managers and follows your instructions on how to do the work;
• receives a regular monthly amount rather than payment for defined deliverables;
• uses your equipment, email and systems as a member of your team; and
• works only for you, with no end date.

If a relationship that is employment in substance is treated as a contract for services, the business can be required to pay the statutory insurance that should have been paid, may face administrative penalties, and the person can claim the protections of the Labour Code, including on termination.

A contractor arrangement fits work that is independent and project-based: a defined deliverable, the contractor's own methods and tools, an end date, and freedom to work for others. Two practical points:

• PIT withholding. When you pay a resident individual without a labour contract, PIT is generally withheld at 10% on payments of VND 2,000,000 or more. Your Vietnam entity, if you have one, handles this; a foreign company paying from abroad should take tax advice on its own position.
• Foreign nationals. A foreign national working in Vietnam generally needs a Work Permit, or confirmation that an exemption applies, whatever the contract is called.

Question 3: Do you already have a Vietnam entity?

If you do, an EOR is usually not the right tool: your entity can employ people directly. The question becomes who runs payroll.

• In-house suits larger teams with an HR and payroll function that keeps up with changes to PIT, statutory insurance and labour rules.
• Outsourced Payroll Services suit entities that would rather not build that function. Your company remains the legal employer. Depending on the agreed scope, Truzand prepares the monthly payroll, payslips, PIT and statutory-insurance administration, payroll reports and employee records, on a schedule agreed with you. Truzand's Outsourced Payroll starts from US$20 per employee per month.

Outsourced payroll is not labour supply: the employees are yours, under contracts with your entity.

If you are setting up an entity now, see our HR and payroll setup checklist for a new foreign-invested company.

Question 4: How many people, and for how long?

If you have no entity and the work is employment, the choice is between an EOR and setting up your own company. Here the numbers matter.

With an EOR, you pay a monthly fee per employee and nothing to set up. Truzand's fee is 8% of the monthly cost to employ (gross salary plus employer statutory contributions), between US$80 and US$250 per employee per month, with no setup fee. VAT applies to the fee.

With your own entity, you pay set-up costs once and then fixed running costs every month, whether you employ two people or twenty. Typical running costs include:

• a registered office;
• bookkeeping, tax declarations and annual financial statements;
• an annual audit: foreign-invested enterprises are among the businesses whose annual financial statements must be audited under the Law on Independent Audit;
• investment and statutory reporting;
• payroll and HR administration, in-house or outsourced; and
• a bank account and its charges.

A worked example: five employees on a gross salary of US$2,000 a month each.

The EOR fee is about US$11,800 a year for the team, before VAT. Compare that with your own entity's set-up costs and annual running costs, plus payroll support if you outsource it. With a handful of people, the EOR is usually simpler and cheaper. As the team grows, and once you need an entity for other reasons anyway, your own entity tends to make more sense.

The salary and employer contributions are the same on both routes. Use the Employment Cost Calculator for the exact contributions at any salary, and ask any provider for a full written breakdown: the pricing gaps worth checking apply to every EOR proposal.

A simple way to decide

1. Will you trade, invoice, import or need a licence in Vietnam? If yes, you need your own entity. Use an EOR for your first hires while it is being set up, if timing matters.
2. Is the work genuinely independent and project-based? If yes, a contractor can be appropriate. If the person will work like a member of your team, treat it as employment.
3. Do you already have an entity? If yes, employ directly and decide whether to run payroll in-house or use Outsourced Payroll Services.
4. No entity, and employment is the right model? Use an EOR while the team is small or the market is being tested. Review the case for your own entity as headcount and plans grow.

The Vietnam Expansion Pathway asks six to eight short questions about your plans and suggests a route.

Setting up your own entity

Setting up a foreign-invested company involves investment and enterprise registration, a bank account for capital contribution, tax registration and any sector licences. Since 1 March 2026, the new Law on Investment (No. 143/2025/QH15) allows a foreign investor to establish the company before the investment registration certificate procedure, provided the market-access conditions for foreign investors are met (Article 19). The right sequence depends on the project and its sector, so this stage is for a licensed legal or investment adviser.

Truzand does not register companies. Once the entity exists, our HR Compliance & Setup support covers the employment side: employment contract templates, internal labour regulations, statutory registrations, payroll set-up and Work Permit, Visa and TRC coordination, depending on the agreed scope.

Combining routes, and moving from EOR to your own entity

The routes are not exclusive. A business can employ its core team through its own entity, use an EOR for people in another city or during a transition, and engage contractors for defined projects.

Many businesses start with an EOR and move the team to their own entity later. The move involves new employment contracts with your entity, the employees' agreement, a decision on how service with the EOR is recognised, the transfer of statutory insurance and PIT records, and, for foreign employees, a new Work Permit for the new employer. Plan it around a payroll cut-off so that no month is paid twice or missed.

Frequently asked questions

Can I hire employees in Vietnam without my own company?

Yes, through an EOR. The EOR's Vietnam entity is the legal employer; you choose the person and direct their work. An EOR does not, however, let your company trade, invoice or hold licences in Vietnam.

Who is responsible for compliance under an EOR?

The EOR, as the legal employer, carries out the employment obligations covered by the service agreement: the employment contract, payroll, PIT withholding, statutory insurance and employee records. You direct the work and provide accurate information on hours, pay changes, leave and performance matters. The service agreement should set out this division clearly.

Can I hire contractors in Vietnam instead of employees?

Yes, for genuinely independent work. If the person works under your management, on your schedule, for a regular wage, the Labour Code treats the relationship as employment, whatever the contract says.

Is Outsourced Payroll the same as an EOR?

No. With Outsourced Payroll Services, your own Vietnam entity is the employer and Truzand runs payroll within the agreed scope. With an EOR, the EOR's entity is the employer. Outsourced Payroll needs your own entity; an EOR does not.

When should we move from an EOR to our own entity?

When you need an entity for other reasons (trading, invoicing, licences, premises), or when the EOR fees for a growing team exceed what your own entity would cost to run. Allow time for the company set-up and the transfer of each employee.

How Truzand can help

Truzand supports all three employment routes in Vietnam: EOR (Employer of Record) when you have no entity yet, Outsourced Payroll Services when you do, and HR Compliance & Setup for the HR side of a new entity. Under each, the scope and fee are agreed in writing before work begins.

What this does not cover

This article is general information, not legal or tax advice. Requirements depend on your business activities, the people concerned, the competent authorities, current rules and the agreed scope. Company registration, investment licensing and tax-presence questions need a licensed legal or tax adviser. Fees and figures reflect Truzand's published pricing and the parameters in its Employment Cost Calculator as of October 2026.

Official sources

• Labour Code No. 45/2019/QH14: Article 13 (employment contracts) and Article 20 (contract types).
• Law on Investment No. 143/2025/QH15, effective 1 March 2026: Article 19 (establishing an economic organisation).
• Decree 219/2025/NĐ-CP on foreign workers, effective 7 August 2025.
• Ministry of Finance answer on mandatory audits, citing Article 37 of the Law on Independent Audit.