Vietnam has emerged as one of Asia’s fastest-growing economies, strategically positioned as a manufacturing hub, technology outsourcing destination, and service economy. With a population of over 100 million and a median age of just over 32 years, Vietnam offers a young, skilled, and cost-competitive workforce that appeals to global employers.

Major cities like Ho Chi Minh City, Hanoi, and Da Nang are vibrant hubs for technology, finance, manufacturing, and shared services, while industrial zones in Binh Duong and Bac Ninh support Vietnam’s global supply chain leadership. The country has attracted multinational companies such as Samsung, Intel, LG, and Microsoft, highlighting its role in high-tech manufacturing and R&D.

At the same time, Vietnam’s labor laws are detailed and strictly regulated under the Labor Code of 2019, covering everything from contracts to severance obligations. Payroll compliance requires precision, with mandatory social insurance, health insurance, and trade union fees. Setting up a legal entity can take months, requiring local registration, licensing, and ongoing compliance management.

Many companies overcome these hurdles by partnering with an Employer of Record (EOR) in Vietnam. With Gloroots, businesses can hire employees in Vietnam quickly and compliantly—without the delays or risks of setting up their own entity. Gloroots manages contracts, payroll, and statutory contributions, enabling companies to focus on building strong teams and scaling in one of Asia’s most dynamic markets.

What are the key facts about Vietnam’s economy and workforce?

Vietnam is one of Asia’s fastest-growing economies, recording consistent GDP growth driven by manufacturing, exports, and services. The country has become a preferred destination for companies diversifying supply chains out of China, earning its place in the global value chain.

Institutions like Vietnam National University, Hanoi University of Science and Technology, and Foreign Trade University are producing a steady pipeline of STEM and business graduates. Multinationals such as Samsung, Intel, LG, Nike, and Foxconn have large operations in Vietnam, while the country is also cultivating a strong start-up ecosystem in fintech, e-commerce, and software development.

Vietnam’s workforce is young, tech-savvy, and increasingly proficient in English, especially in major cities. Employers can access a wide talent base in IT, engineering, finance, and manufacturing, with competitive salary levels compared to neighboring countries. This makes Vietnam an attractive hub for both manufacturing and white-collar outsourcing.

Data Snapshot: Vietnam’s Workforce

What is the work culture and talent pool like in Vietnam?

Narrative Overview

Vietnam’s work culture blends traditional values of collectivism and hierarchy with a growing emphasis on innovation, collaboration, and global outlook. Employees often show strong respect for authority and senior leadership, but younger professionals are more open to flat structures, merit-based progression, and cross-cultural teamwork.

Workplace communication in Vietnam tends to be indirect and relationship-driven (often referred to as “giữ thể diện”). Building trust and long-term relationships is crucial for employee engagement and retention. At the same time, the younger generation of professionals, especially in Ho Chi Minh City and Hanoi, is increasingly comfortable with global business practices, including direct feedback, agile project management, and remote collaboration.

Vietnam’s talent pool is deep and diverse, particularly in:

• Technology and IT outsourcing (Da Nang, Ho Chi Minh City)
• Finance, banking, and shared services (Hanoi, Ho Chi Minh City)
• Engineering and electronics manufacturing (Bac Ninh, Binh Duong, Hai Phong)
• E-commerce, fintech, and start-ups (urban innovation hubs)

This combination of cost efficiency, English proficiency, and technical skill makes Vietnam highly attractive for companies hiring both operational and white-collar roles.

Data Snapshot: Vietnam’s Talent Pool

Q. What is the process of setting up an entity in Vietnam?

Setting up a legal entity in Vietnam is possible but involves lengthy procedures, government approvals, and strict compliance requirements. The most common form for foreign businesses is a Wholly Foreign-Owned Enterprise (WFOE), though Joint Ventures (JVs) and Representative Offices (ROs) are also options depending on business needs.

Entity setup requires preparing investment registration documents, securing licenses, opening local bank accounts, and registering with tax and labor authorities. The process can take 3–6 months or more, depending on the industry, location, and complexity of approvals. Vietnam also enforces minimum capital requirements in certain sectors, which adds to the upfront investment burden.

Because of these challenges, many global companies use Gloroots’s Employer of Record (EOR) solution to enter Vietnam faster. With Gloroots, employers can hire talent in 2–4 weeks without waiting months for entity registration.

Step-by-Step Process of Entity Setup in Vietnam

1. Choose Entity Type
   • WFOE (Wholly Foreign-Owned Enterprise): Full control; most common for international businesses.
   • Joint Venture (JV): Partnership with local investor, required in some restricted sectors.
   • Representative Office (RO): Limited to liaison and market research, cannot generate revenue.
2. Prepare Investment Registration Certificate (IRC)
   • Submit business plan, shareholder documents, and investment proposal to the Department of Planning and Investment (DPI).
3. Obtain Enterprise Registration Certificate (ERC)
   • Equivalent to business license; issued after IRC approval.
4. Register Tax and Accounting System
   • Mandatory registration with the General Department of Taxation.
   • Employers must also set up compliant bookkeeping and appoint a chief accountant.
5. Open Bank Accounts
   • Both local VND and foreign currency accounts required.
6. Social Insurance & Labor Registration
   • Employers must register employees with the Vietnam Social Security (VSS) authority for social, health, and unemployment insurance.
7. Operational Compliance
   • Annual reporting, audits, and corporate filings are mandatory.

Q. What are the main benefits of using Gloroots as an Employer of Record in Vietnam vs setting up your own entity?

Vietnam offers tremendous opportunities for global businesses, but establishing a legal entity comes with delays, upfront costs, and compliance risks. Setting up a Wholly Foreign-Owned Enterprise (WFOE) or Joint Venture requires months of preparation, significant capital, and ongoing interaction with government agencies. Once established, companies must also manage payroll, social insurance, labor registrations, and annual audits.

By contrast, an Employer of Record (EOR) like Gloroots provides a ready-to-use infrastructure that allows you to hire in Vietnam quickly and compliantly. Gloroots takes care of contracts, payroll, tax filings, and benefits administration — enabling companies to focus on growth while avoiding bureaucratic hurdles.

This makes Gloroots ideal for companies that want to test the market, build small-to-medium teams, or hire niche talent quickly, without committing to long-term entity ownership.

Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Choosing between a direct entity and an EOR in Vietnam comes down to speed, flexibility, and cost efficiency. While an entity makes sense for large, long-term operations, it is expensive and slow to establish.

With Gloroots as your EOR in Vietnam, you gain:

• Faster hiring timelines without bureaucracy.
• Lower costs and risks, since no upfront capital is required.
• Full compliance assurance with Vietnamese labor and tax laws.
• Scalability to adjust workforce size as market conditions change.

Gloroots makes hiring in Vietnam simple, compliant, and strategic.

Q: What are the key employment laws in Vietnam that employers should know?

Narrative Overview

Employment in Vietnam is governed by the Labor Code of 2019 and its implementing decrees, which regulate contracts, wages, working hours, benefits, and termination procedures. Vietnam’s laws are employee-protective and strictly enforced, meaning compliance is non-negotiable.

Employers must issue written contracts in Vietnamese (often bilingual with English), comply with working hour limits, and provide statutory benefits including social insurance, health insurance, and unemployment insurance. Leave entitlements are defined by law, and penalties apply for late payments, incomplete contracts, or violations of labor rights.

With Gloroots as your EOR, companies gain full compliance assurance — from legally valid contracts to correct leave administration and payroll processing — removing the burden from HR teams unfamiliar with local law.

Key Employment Law Provisions in Vietnam

• Employment Contracts
  Must be in writing, in Vietnamese (bilingual versions allowed), and specify job role, salary, benefits, working hours, and termination clauses.
• Working Hours
  Standard: 48 hours per week, capped at 8 hours/day.
  Employers may apply flexible arrangements, but overtime caps apply.
• Overtime
  Overtime cannot exceed:
  • 40 hours/month
  • 200 hours/year (can be extended to 300 in special sectors)
    Overtime pay rates:
  • 150% of hourly wage for workdays
  • 200% for weekends
  • 300% for public holidays
• Minimum Wage
  Set regionally (updated annually). For 2023, it ranged from VND 3,250,000 to 4,680,000/month depending on the region.
• Maternity & Paternity Leave
  • Maternity leave: 6 months, extended for multiple births.
  • Paternity leave: 5–14 days depending on delivery type.
• Annual Leave
  • Minimum 12 days per year, increasing with seniority (1 extra day for every 5 years).
• Sick Leave
  Paid through the social insurance fund; duration depends on tenure and illness severity (up to 30 days for <15 years of service, 40–70 days for longer tenure or hazardous work).

Employment Law Compliance: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Vietnam’s labor laws are detailed and strictly enforced, with fines and liabilities for employers who fail to comply. Managing these laws directly requires deep local expertise.

With Gloroots as your EOR in Vietnam, you gain:

• Fully compliant bilingual contracts.
• Automated payroll with correct wages, overtime, and leave.
• Reduced risk of penalties from labor authorities.

Gloroots ensures your workforce in Vietnam is hired and managed legally, fairly, and seamlessly.

Q: What are the types of work visas in Vietnam, and how can Gloroots help with immigration?

Vietnam is one of Southeast Asia’s fastest-growing economies, attracting foreign professionals in technology, manufacturing, finance, and renewable energy. While local hiring is straightforward, foreign nationals must secure a work visa and work permit to be legally employed in Vietnam.

The immigration process requires sponsorship by a Vietnam-registered employer and involves approvals from the Department of Labor, Invalids and Social Affairs (DoLISA). Employers must demonstrate that the foreign hire is filling a role that cannot be filled by a Vietnamese national, though exemptions apply for investors, short-term projects, and intra-company transfers.

With Gloroots as your Employer of Record (EOR), immigration is simplified. Gloroots acts as the legal sponsor, securing work visas and permits for your employees and ensuring full compliance with Vietnamese labor and immigration law. This allows you to hire global talent in Vietnam without setting up a local entity.

Common Work Visa Types in Vietnam

• LD Visa (Work Visa)
  • Issued to foreign nationals employed in Vietnam.
  • Typically valid for the duration of the employment contract.
• DN Visa (Business Visa)
  • For foreign nationals entering Vietnam for business meetings, negotiations, or short-term assignments.
  • Does not permit direct employment.
• DT Visa (Investor Visa)
  • For foreign investors and business owners.
  • Validity depends on investment capital.
• VR Visa (Visiting Relatives/Dependents)
  • For family members of foreign employees in Vietnam.
• Work Permit
  • Required for foreign employees working longer than 3 months.
  • Issued by DoLISA and tied to employer sponsorship.

How Gloroots Supports Immigration

• Work Visa Sponsorship: Acts as the official employer, enabling LD visa issuance.
• Work Permit Management: Secures and renews DoLISA work permits.
• Compliance Oversight: Ensures hiring meets Vietnam’s labor localization rules.
• Renewals & Extensions: Tracks visa/work permit expirations and manages renewals.
• Dependent Support: Assists with visas for spouses and dependents.
• Integrated EOR Services: Combines immigration with payroll, benefits, and HR compliance.

Why This Matters

Vietnam’s immigration system is sponsor-based and compliance-heavy, requiring precise coordination with DoLISA and immigration authorities. Without a Vietnam entity, companies cannot sponsor visas directly, creating barriers for foreign hiring.

With Gloroots as your EOR in Vietnam, you can:

• Secure compliant work visas and permits for employees.
• Avoid delays and penalties from improper sponsorship.
• Combine immigration with payroll and HR for seamless workforce management.

Gloroots makes Vietnam immigration fast, compliant, and risk-free.

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Q: What are the risks of misclassification in Vietnam?

Narrative Overview

In Vietnam, distinguishing between an employee and an independent contractor is crucial. If a company misclassifies employees as contractors to avoid paying statutory benefits or social contributions, it risks financial penalties, back payments, and legal disputes.

Authorities assess the nature of the working relationship rather than the contract label. If a contractor is performing work similar to an employee — with fixed hours, ongoing duties, and company integration — labor inspectors or courts may reclassify them as employees.

With Gloroots as your EOR, companies can eliminate this risk. Gloroots ensures workers are correctly classified, provides legally valid employment contracts, and manages payroll and contributions in compliance with Vietnamese labor law.

Criteria That Lead to Misclassification in Vietnam

A contractor may be deemed an employee if:

• They work under the employer’s direct supervision.
• They have fixed working hours or report regularly like staff.
• They use company equipment and tools.
• They provide services exclusively to one company.
• They are compensated monthly rather than per project/milestone.
• They perform work integral to the company’s operations.

Penalties for Misclassification

Employers found guilty of misclassification may face:

• Back payment of wages and benefits (social, health, and unemployment insurance contributions).
• Late payment fines and interest on missed contributions.
• Severance or compensation claims from misclassified workers.
• Labor inspection penalties under the Labor Code of 2019.
• Increased scrutiny from authorities, risking business continuity.

Misclassification Risk: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Misclassification in Vietnam is a high-risk compliance issue. Authorities prioritize protecting workers’ rights, and companies that misclassify employees face significant liabilities.

With Gloroots as your EOR in Vietnam, you can:

• Avoid the risk of misclassification entirely.
• Ensure all statutory contributions are paid.
• Focus on business growth with confidence in compliance.

Q: How does an EOR help you run payroll in Vietnam?

Running payroll in Vietnam requires compliance with the Labor Code of 2019 and tax regulations issued by the General Department of Taxation. Employers must calculate gross-to-net salaries, withhold Personal Income Tax (PIT), and make mandatory contributions to social insurance, health insurance, and unemployment insurance. Contributions and filings are city-specific, and reporting deadlines are strict.

Payroll is processed monthly, and payments must be made in Vietnamese Dong (VND) through a registered bank account. Employers must also issue payslips detailing wages, deductions, and contributions, while ensuring compliance with annual tax reconciliation requirements.

An Employer of Record (EOR) like Gloroots simplifies this process by managing end-to-end payroll operations: contracts, salary payments, deductions, social insurance, tax filings, and compliance reporting. This ensures employees are paid correctly and on time, while businesses remain fully compliant with Vietnamese law.

Key Payroll Compliance Requirements in Vietnam

• Payroll Cycle
  Salaries are typically paid monthly, on a date agreed in the employment contract.
• Currency Requirement
  Wages must be paid in Vietnamese Dong (VND) through a local bank account.
• Tax Withholding
  Employers must calculate and withhold Personal Income Tax (PIT) using progressive tax brackets (monthly/annual).
• Mandatory Contributions (Employer + Employee)
  • Employer Contributions (~21.5%): Social insurance (17.5%), Health insurance (3%), Unemployment insurance (1%).
  • Employee Contributions (~10.5%): Social insurance (8%), Health insurance (1.5%), Unemployment insurance (1%).
• Reporting & Filing
  Employers must file monthly payroll reports with tax and insurance authorities, and complete annual PIT reconciliation.
• Payslips & Transparency
  Employees must receive payslips showing gross pay, deductions, and net pay.

Payroll Management: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Payroll in Vietnam is compliance-intensive, with multiple reporting obligations and strict penalties for delays or errors. Employers must also adapt to frequent updates in contribution rates and tax rules.

With Gloroots as your EOR in Vietnam, companies can:

• Pay employees accurately and on time.
• Ensure full compliance with payroll tax and social insurance laws.
• Provide employees with a professional, transparent payroll experience.

Gloroots makes payroll in Vietnam seamless, compliant, and worry-free.

Q: How does tax compliance work in Vietnam?

Vietnam’s tax compliance framework is governed by the Law on Personal Income Tax (PIT) and enforced by the General Department of Taxation (GDT). Employers are legally required to act as tax withholding agents, calculating and remitting employees’ PIT, along with employer and employee contributions to social, health, and unemployment insurance.

Compliance in Vietnam can be complex because PIT uses progressive tax brackets, while contribution rates vary depending on salary levels and caps. Employers must submit monthly payroll filings, remit contributions, and complete annual PIT reconciliation.

For foreign businesses, this creates administrative challenges. With Gloroots as your Employer of Record (EOR), companies can ensure error-free tax compliance, as Gloroots manages all calculations, filings, and remittances on your behalf.

Personal Income Tax (PIT) in Vietnam

Vietnamese residents are taxed on worldwide income; non-residents are taxed only on Vietnam-sourced income.

Monthly PIT Brackets for Residents:

Employer & Employee Contributions

Employer Contributions (~21.5%)

• Social Insurance: 17.5%
• Health Insurance: 3%
• Unemployment Insurance: 1%

Employee Contributions (~10.5%)

• Social Insurance: 8%
• Health Insurance: 1.5%
• Unemployment Insurance: 1%

Contribution caps apply, based on the base salary ceiling defined by the government each year.

Tax Compliance: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Tax compliance in Vietnam is administratively heavy. Withholding errors, incorrect filings, or missed deadlines can trigger audits and penalties. Employers must also navigate contribution caps and city-specific rules.

With Gloroots as your EOR in Vietnam, you can:

• Guarantee accurate PIT calculations and remittances.
• Ensure employer and employee contributions are made correctly.
• Simplify annual reconciliations and reduce audit risks.

Gloroots makes tax compliance in Vietnam smooth, reliable, and worry-free.

Q: What benefits and entitlements do employees in Vietnam receive?

Employees in Vietnam are protected by the Labor Code of 2019, which guarantees a wide range of statutory benefits and entitlements. Employers must contribute to social, health, and unemployment insurance, and provide paid leave, public holidays, and statutory allowances. Additionally, severance pay is mandatory in certain termination scenarios.

In competitive labor markets like Ho Chi Minh City and Hanoi, employers often go beyond statutory benefits, offering supplementary health insurance, meal allowances, training programs, and performance bonuses to attract and retain top talent.

With Gloroots as your EOR, businesses can deliver both statutory entitlements and additional perks while ensuring compliance with Vietnam’s labor laws.

Statutory Employee Benefits in Vietnam

• Social Insurance (Employer + Employee)
  Covers pensions, sickness, maternity, and occupational accidents.
• Health Insurance
  Provides access to public healthcare services.
• Unemployment Insurance
  Offers financial support to employees who lose their jobs.
• Annual Leave
  Minimum of 12 days per year, increasing with seniority (1 additional day for every 5 years of service).
• Public Holidays
  11 national holidays annually, including Tet (Lunar New Year), Vietnam’s most significant holiday.
• Maternity & Paternity Leave
  • Maternity leave: 6 months, extended in cases of multiple births.
  • Paternity leave: 5–14 days, depending on delivery type.
• Sick Leave
  Funded by social insurance, duration depends on years of service and health condition (30–70 days per year).
• Severance Pay
  Required when employees are terminated (except for misconduct). Employees are entitled to half a month’s salary per year of service.

Benefits & Entitlements: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Employee benefits in Vietnam are mandatory and strictly enforced. Failing to provide the correct entitlements exposes companies to penalties and labor disputes. At the same time, top employers offer additional perks to remain competitive in Vietnam’s growing talent market.

With Gloroots as your EOR, companies can:

• Guarantee compliance with statutory benefits.
• Offer additional perks to boost employee satisfaction.
• Deliver a seamless HR experience without administrative burden.

Q: What’s involved in hiring and onboarding employees in Vietnam?

Hiring in Vietnam is regulated under the Labor Code of 2019, which requires written contracts in Vietnamese (bilingual contracts with English are common for international employers). Employers must clearly define job roles, compensation, benefits, working hours, and termination terms. Contracts must also comply with probation limits and social insurance registration requirements.

Onboarding is equally structured, involving employee identity verification, tax registration, and social insurance enrollment. Employers are also expected to communicate workplace policies, rights, and obligations during induction. Failure to comply with these steps can expose businesses to disputes or penalties.

With Gloroots as your EOR, all hiring and onboarding requirements are handled seamlessly. From drafting compliant contracts to registering employees with authorities and ensuring payroll integration, Gloroots enables a fast and compliant onboarding process in Vietnam.

Hiring & Onboarding Steps in Vietnam

1. Employment Contracts
   • Must be in writing and in Vietnamese (bilingual contracts permitted).
   • Types: Indefinite, definite (1–36 months), or seasonal/project-based (<12 months).
2. Probation Periods
   • Up to 180 days for managerial roles.
   • 60 days for technical and professional roles.
   • 30 days for skilled workers.
   • 6 days for unskilled roles.
3. Employee Documentation
   • National ID/passport.
   • Academic/qualification certificates.
   • Tax Identification Number (TIN).
4. Social Insurance Registration
   • Mandatory within 30 days of employment start.
5. Payroll & Tax Setup
   • Employee registered with the tax authority for PIT withholding.
   • Payroll processed in VND with payslip issuance.
6. Onboarding & Orientation
   • Employers must introduce internal regulations, health & safety policies, and employee rights under the Labor Code.

Hiring & Onboarding: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Hiring and onboarding in Vietnam are documentation-heavy and time-sensitive. Late contracts, incorrect probation periods, or missed social insurance registrations can result in disputes or penalties.

With Gloroots as your EOR, companies can:

• Hire quickly with legally compliant contracts.
• Ensure smooth integration into payroll and benefits.
• Deliver a professional and compliant onboarding experience for employees.

Q: How do you successfully manage a workforce in Vietnam?

Managing a workforce in Vietnam requires balancing strict compliance with labor laws and an understanding of the country’s workplace culture. Employers must ensure timely payroll, social insurance contributions, and compliance with leave entitlements. Equally, they must recognize cultural values like respect for hierarchy, collectivism, and relationship-driven engagement (known locally as “giữ thể diện” or saving face).

Younger professionals in urban hubs like Ho Chi Minh City, Hanoi, and Da Nang are increasingly drawn to merit-based progression, training opportunities, and global work practices. Retention strategies that combine compliance, competitive benefits, and career development are essential for attracting top talent in a competitive market.

With Gloroots as your EOR, companies can manage their Vietnamese workforce smoothly — ensuring compliance with the Labor Code while providing employees with a professional, transparent, and engaging work experience.

Best Practices for Managing a Workforce in Vietnam

1. Ensure Compliance First
   • Issue valid bilingual contracts.
   • Register employees for tax and social insurance on time.
   • Track leave, overtime, and benefits accurately.
2. Respect Work Culture
   • Understand hierarchical norms and show respect to seniority.
   • Build long-term relationships and trust with employees.
   • Communicate clearly, balancing professionalism with cultural sensitivity.
3. Offer Competitive Benefits
   • Provide statutory benefits and add perks such as private health insurance, meal allowances, and wellness support.
4. Focus on Development & Retention
   • Younger professionals value training, upskilling, and career mobility.
   • Recognition and clear career paths reduce attrition.

Workforce Management: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Vietnam’s workforce is young, dynamic, and competitive. To succeed, employers must comply with regulations and create an engaging workplace culture. Non-compliance risks penalties, while weak retention strategies lead to high turnover.

With Gloroots as your EOR in Vietnam, companies can:

• Manage compliance effortlessly.
• Align workforce management with cultural expectations.
• Retain top talent through smooth HR experiences and competitive benefits.

Q: What are the key steps and requirements in terminating employees in Vietnam?

Termination in Vietnam is strictly regulated under the Labor Code of 2019, and the law strongly favors employee protection. Employers cannot terminate at will — they must have valid legal grounds, follow due process, and provide severance where applicable. Any misstep can result in labor disputes, penalties, or reinstatement orders.

Grounds for termination include redundancy due to restructuring, poor performance (with documented proof of training and support), prolonged illness, or disciplinary reasons. In most cases, termination requires prior notice and severance pay. For probationary contracts, the rules are more flexible, but employers must still comply with notice requirements.

With Gloroots as your EOR, companies can manage employee exits in Vietnam lawfully and smoothly. Gloroots ensures compliance with notice periods, severance calculations, and documentation, reducing the risk of disputes.

Key Termination Rules in Vietnam

• Termination Process
  • Must be based on statutory grounds (economic reasons, performance, redundancy, misconduct).
  • Written notice required; consultation with trade union may be necessary.
• Notice Periods
  • Indefinite contract: 45 days.
  • Definite contract (12–36 months): 30 days.
  • Seasonal or <12-month contract: 3 days.
  • Probationary contracts: 3–7 days, depending on job type.
• Severance Pay
  • Required for employees with at least 12 months of service.
  • Half a month’s salary per year of service, excluding misconduct cases.
• Probationary Termination
  • Employers may terminate with short notice (3–7 days).
  • Still requires lawful reasoning; discriminatory or arbitrary termination is prohibited.
• Unlawful Termination Consequences
  • If termination is deemed unlawful, employees may demand reinstatement or compensation (often double the severance amount).

Termination: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Termination in Vietnam is employee-protective and process-heavy. Employers must document valid grounds, comply with notice rules, and calculate severance correctly. Failure to do so may lead to reinstatement orders or costly penalties.

With Gloroots as your EOR in Vietnam, companies can:

• Conduct terminations lawfully and transparently.
• Ensure severance and notice compliance.
• Reduce disputes and safeguard employer reputation.

Q: What is the offboarding process in Vietnam?

The offboarding process in Vietnam is a compliance-driven procedure regulated by the Labor Code of 2019. It ensures that the employment relationship is formally concluded, with proper clearance, settlement of wages and benefits, and issuance of mandatory documentation. Employers must also deregister employees from social, health, and unemployment insurance with the Vietnam Social Security (VSS) authority.

Failure to follow offboarding rules — such as delaying final pay or failing to issue termination documents — may lead to employee disputes, administrative fines, or claims for compensation.

With Gloroots as your EOR, businesses benefit from a structured, compliant offboarding process that ensures timely settlements, proper documentation, and respectful closure of employment relationships.

Key Phases of the Offboarding Process in Vietnam

1. Notice of Resignation or Termination
   • Employees resigning must provide statutory notice (30–45 days depending on contract).
   • Employers terminating must provide lawful notice or payment in lieu.
2. Exit Clearance
   • Return of company assets (laptops, phones, ID cards).
   • Confirmation of project handovers and departmental approvals.
3. Final Settlement (F&F)
   • Includes unpaid wages, overtime, unused annual leave, bonuses (if applicable), and severance pay.
   • Final wages must be paid within 7 working days (extendable to 30 in special cases).
4. Social Insurance Deregistration
   • Employers must deregister employees from VSS to stop further contributions.
5. Certificate of Employment
   • Employers must issue a certificate stating job title, employment duration, and contributions.
   • This is essential for employees when applying for new jobs or social benefits.
6. Exit Documentation & Tax Compliance
   • Provide PIT records to employees for annual tax filings.
   • Submit termination reports to local labor authorities, if applicable.

Offboarding: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

Offboarding in Vietnam is time-sensitive and compliance-heavy. Employers must process settlements quickly, deregister insurance, and provide proper documentation. Mishandling exits risks disputes, fines, and reputational harm.

With Gloroots as your EOR in Vietnam, companies can:

• Ensure on-time settlements and documentation.
• Handle social insurance and tax deregistrations seamlessly.
• Deliver a professional offboarding experience that protects both employee and employer.

Q: What costs and financial planning do you need with an Employer of Record in Vietnam?

Narrative Overview

Expanding into Vietnam requires careful financial planning, as costs go beyond salaries. Employers must budget for mandatory social insurance contributions, health and unemployment insurance, severance liabilities, and payroll compliance costs. For those setting up a legal entity, costs multiply — including registered capital requirements, incorporation fees, office lease expenses, local accounting staff, and annual audits.

By contrast, using an Employer of Record (EOR) like Gloroots allows companies to avoid heavy upfront costs. Instead of investing months of time and significant capital into establishing a local entity, employers pay a predictable monthly EOR fee per employee. This fee covers payroll, statutory contributions, tax filings, and compliance, making budgeting simpler and market entry more efficient.

Key Cost Considerations in Vietnam

• Entity Setup & Maintenance
  • Setting up a Wholly Foreign-Owned Enterprise (WFOE) can take 3–6 months, requiring legal fees, registered capital (sector-specific), and annual audits.
  • Closing an entity can take 12+ months, adding further costs.
• Employer Payroll Contributions (~21.5%)
  • Social insurance, health insurance, and unemployment insurance, paid monthly.
• Employee Costs
  • Salaries in Tier 1 cities (Ho Chi Minh City, Hanoi) are higher than in Tier 2/3 cities.
  • 13th-month salary is not mandated by law but is a widely expected practice.
• Severance Liabilities
  • Employers must pay half a month’s salary per year of service (except for misconduct).
• EOR Fees
  • A flat monthly fee per employee that includes: compliant contracts, payroll processing, benefits administration, tax withholding, and social contributions.
  • Eliminates the need for local HR and compliance infrastructure.

Costs: Direct Entity vs Gloroots EOR (Vietnam)

Why This Matters

For foreign companies, operating in Vietnam through a direct entity is capital-heavy, compliance-intensive, and inflexible. By contrast, Gloroots’s EOR model provides:

• Predictable monthly costs with no hidden liabilities.
• Faster entry into Vietnam’s market without heavy investment.
• Scalability, enabling companies to test and expand teams flexibly.

Gloroots makes financial planning in Vietnam simpler, leaner, and more efficient.

Q: What challenges might you face, and how do you solve them using an EOR in Vietnam?

Vietnam offers a young workforce, competitive costs, and strategic market opportunities, but expanding into the country comes with hurdles. Employers face strict labor laws, complex payroll requirements, and region-specific regulations. Setting up a local entity takes months and requires significant upfront investment.

Other challenges include navigating employee misclassification risks, ensuring compliance with social insurance contributions, and meeting employee expectations for benefits and a 13th-month salary. Missteps in these areas can lead to fines, disputes, or reputational damage.

With an Employer of Record like Gloroots, businesses bypass these obstacles. Gloroots provides an already-compliant entity, enabling immediate hiring, streamlined payroll, and complete labor law compliance. This allows companies to focus on growth and talent engagement, rather than administrative and legal complexity.

Common Challenges & EOR Solutions in Vietnam

Why This Matters

Vietnam’s business environment is promising but highly regulated. Without local HR and compliance expertise, companies face delays, penalties, and workforce risks.

With Gloroots as your EOR in Vietnam, you can:

• Hire quickly and compliantly without entity setup.
• Ensure error-free payroll, taxes, and contributions.
• Avoid misclassification and termination disputes.
• Scale up or down with minimal financial risk.

Gloroots makes expansion in Vietnam fast, compliant, and flexible.

Conclusion

Vietnam is one of Asia’s most dynamic growth markets, offering a young, skilled, and cost-competitive workforce across industries from technology and outsourcing to manufacturing and finance. At the same time, Vietnam’s labor laws, payroll rules, and compliance obligations are strict and time-consuming to manage. Setting up an entity requires months of effort and significant upfront investment.

With Gloroots as your Employer of Record (EOR) partner, you can hire employees in Vietnam quickly, compliantly, and without risk. From bilingual contracts and payroll processing to benefits administration and offboarding, Gloroots takes care of all employment responsibilities so you can focus on business growth.

For companies looking to expand into Vietnam, Gloroots provides the fastest, most compliant, and most cost-efficient path to accessing world-class talent.

Gloroots makes global hiring simple and compliant.