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Hiring in Vietnam
Background checks in Vietnam
Hire employees in Vietnam
Language in Vietnam
Payroll setup in Vietnam
Easily hire workers in Vietnam with CXC
Employer of record in Vietnam
Vietnam is quickly becoming one of Asia’s most dynamic hubs for global talent. With a young, tech-savvy workforce, rising English proficiency, and a growing digital economy, it is no wonder more companies are looking to Vietnam to expand their teams. But to tap into this opportunity, it is important to understand how hiring works locally and how to stay compliant while doing it.
When hiring in Vietnam, you will need to follow a few key regulations that ensure fair treatment of workers and protect your business. That includes setting up proper employment contracts, making social insurance contributions, and understanding the difference between employee types, such as regular staff, independent contractors, or agency workers. Each group is treated differently under Vietnamese law, so getting this right from the start matters.
In addition, employers are also responsible for contributing to social, health, and unemployment insurance. And there are salary caps and contribution limits to keep in mind. Vietnamese is the official language used in all legal documents and employment contracts, but in major cities like Ho Chi Minh City and Hanoi, English is widely spoken in business, making bilingual communication a big plus.
If you’re unfamiliar to the Vietnamese market, partnering with an employer of record in Vietnam like CXC can make your expansion seamless and efficient. With an EoR in Vietnam, you can hire and manage workers compliantly without the need to set up a local entity.
Whether you’re just exploring Vietnam or already gearing up to expand, CXC’s EoR solutions are built to support you every step of the way.
In this guide, we will talk about everything you need to know to hire local workers and how you can leverage EOR in Vietnam to hire quickly and compliantly.
Hiring in Vietnam
Recruiting in Vietnam presents both opportunity and complexity for employers expanding into this fast-growing Southeast Asian market. Whether you are sourcing local talent or engaging overseas professionals, compliance with Vietnam’s labour legislation is key to avoiding costly setbacks. Employers must be aware of contract requirements, tax obligations, and permitted work arrangements, particularly when onboarding new hires or choosing to hire contractors in Vietnam.
Hiring staff in Vietnam
When hiring staff in Vietnam, employers must issue a written labour contract detailing the employee’s role, salary, working hours, and entitlements. The standard Vietnamese work week is capped at 48 hours, with a maximum of 8 hours per day. Any overtime must be compensated in accordance with labour law.
Employers are obligated to register each new employee with the local Department of Labour, Invalids, and Social Affairs (DOLISA), maintain a personnel file, and submit labour reports. Additionally, companies must contribute to social insurance, health insurance, and unemployment insurance. These mandatory contributions apply to both Vietnamese and foreign employees, with varying rates depending on the type of insurance and employment status.
For foreign workers, a valid work permit is required unless exempt under specific conditions. Employers must also ensure compliance with local quotas on foreign employees.
Hiring contractors in Vietnam
Independent contractors offer more flexible arrangements, but they are not exempt from legal and tax obligations. In Vietnam, contractors are responsible for handling their own tax filings. However, foreign employers—especially those based in the United States—must request a completed IRS Form W-8 BEN from their Vietnamese contractors. This form ensures the contractor qualifies for foreign status and confirms any applicable tax treaty benefits.
US companies paying foreign contractors may also be required to file Form 1096 to report payments to the IRS. Employers should seek legal or tax advice to remain compliant with US and Vietnamese tax obligations.
Hiring cost per employee in Vietnam
The total hiring cost per employee in Vietnam includes more than just salary. Employers must factor in statutory contributions, recruitment expenses, training, and onboarding costs. Contributions to insurance funds are typically around 21.5% of an employee’s salary (17.5% for social insurance, 3% for health insurance, and 1% for unemployment insurance), though this can vary based on location and industry.
Additional expenses may include workspace costs, tools and equipment, and compliance-related administrative work. Employers considering the cost of job hiring in Vietnam should also account for the time spent processing work permits for foreign nationals, which can be both time-consuming and resource intensive.
To simplify the process of hiring in Vietnam while staying compliant, many companies partner with Employer of Record (EoR). An EoR manages local compliance, payroll, and employment contracts on behalf of the client, allowing businesses to focus on their core operations while mitigating employment risk.
Background checks in Vietnam
In Vietnam, employers are increasingly turning to pre-employment background checks to help ensure the reliability and integrity of new hires. While there is no single unified law mandating these checks across all sectors, verifying a candidate’s work history, qualifications, and in some cases, their criminal background, has become common practice among companies seeking to mitigate risk and protect their workforce.
Are employment checks common in Vietnam?
Yes, employment checks are common in Vietnam, particularly among foreign-owned companies and those operating in regulated sectors such as finance, healthcare, aviation, and education. The goal is typically twofold: to validate the accuracy of a candidate’s application and to reduce exposure to potential legal or reputational risks.
Employers may request personal details relevant to the role, including name, age, education, qualifications, professional skills, and health status. Although Vietnamese labour law does not mandate these checks for all industries, they are permissible under current legislation. According to the Labour Code 2019, certain sectors may require additional documentation or clearance.
Employment history checks in Vietnam
Verifying employment history in Vietnam generally involves contacting past employers to confirm roles, responsibilities, and tenure. While there is no central employment verification system, local employers often maintain detailed personnel files, which can support this process. Candidates may also be asked to provide copies of contracts or letters of reference. Employers should obtain the applicant’s consent before contacting previous employers, in line with personal data protection principles.
For foreign employees, employers are legally required to seek prior written approval from the provincial People’s Committee via the Department of Labour, Invalids, and Social Affairs (DOLISA) before proceeding with a hire. A valid work permit must also be obtained, unless the individual qualifies for an exemption, such as being married to a Vietnamese national.
Medical background check in Vietnam
While not universally required, medical checks in Vietnam are often conducted as part of the onboarding process. These checks are especially important in roles involving physical labour, healthcare, or food handling. Companies may request a general health certificate issued by a recognised medical institution, which includes an assessment of the candidate’s overall physical condition and any underlying health issues.
The Labour Code allows employers to ask for medical information relevant to the role. However, any request for such data must be reasonable and limited to job-related concerns. Excessive probing or discriminatory practices based on health conditions could violate anti-discrimination provisions in Vietnamese law.
Criminal background checks in Vietnam
Criminal background checks in Vietnam are permissible but not legally required in most industries. That said, employers hiring for positions involving financial responsibility, sensitive data, or vulnerable individuals often conduct these checks as standard procedure. Candidates may be asked to provide a judicial record (also known as a criminal record certificate or “Phiếu lý lịch tư pháp”), which can be requested through the Ministry of Justice or authorised local agencies.
For foreign hires, criminal records from their country of origin may also be required as part of the work permit application process. The time it takes to obtain these records varies depending on the issuing authority—typically, one to three weeks for Vietnamese nationals, and potentially longer for foreign citizens depending on their country of origin.
Employers asking how long to get a background check from Vietnam should plan for at least two to four weeks to complete all relevant checks, especially if dealing with international documentation or government approvals.
Getting a pre-employment background check in Vietnam can be a straightforward process when aligned with the legal framework and role-specific requirements. While not all types of checks are mandatory, they are increasingly seen as a best practice, particularly for employers operating in competitive or regulated industries. Whether you are verifying employment history, requesting medical certificates, or obtaining judicial records, ensuring transparency and candidate consent throughout the process is key to maintaining compliance and building trust.
Hire employees in Vietnam
Employers exploring how to hire employees in Vietnam have several options, each with different legal and operational implications. Whether engaging full-time staff, short-term contractors, or agency workers, the structure of the relationship directly affects tax, social insurance obligations, and compliance with Vietnam’s Labour Code. It is important to consider the distinctions carefully, as improper classification can result in penalties.
Regular employees in Vietnam
Most employers opt for regular employment contracts governed by Vietnam’s Labour Code. These contracts fall into two main categories: definite-term and indefinite-term. A definite-term contract allows employment for up to 36 months with a clearly specified end date. Indefinite-term contracts, meanwhile, do not set an expiry date and are often used after the renewal of a definite-term contract or for long-term employment needs.
Employees under either arrangement are entitled to full statutory benefits, including social insurance, health insurance, unemployment insurance, paid leave, and severance entitlements. Employment relationships must be documented with a written contract that outlines job scope, salary, and working conditions, ensuring both compliance and transparency.
Independent contractors in Vietnam
Some businesses may choose to engage individuals as independent contractors in Vietnam, particularly for project-based or specialised work. Independent contractors typically operate under civil contracts governed by Vietnam’s Civil Code and do not qualify for employee benefits. However, the use of such contracts requires caution.
The 2019 Labour Code provides safeguards to prevent misuse of service or consultancy contracts in lieu of employment agreements. If a service contract includes terms on work scope, compensation, and oversight by the hiring party, it may be reclassified as an employment contract by labour authorities, especially if the individual does not have household business registration. Reclassification may result in back payments for social insurance and other employer obligations.
Agency workers in Vietnam
Another hiring route involves agency workers or individuals employed by a licensed labour outsourcing agency but placed at a client company. Labour outsourcing is restricted to specific roles approved by the government, and the maximum duration for outsourced employment is 12 months.
The agency is responsible for the employment contract, salary payments, and social insurance contributions, but the client company manages the worker’s day-to-day duties. Importantly, agency workers must receive equal pay and conditions compared to employees in equivalent roles at the host company. Discrimination between permanent staff and agency workers is prohibited.
Language in Vietnam
Vietnam is a dynamic and linguistically rich country where communication plays a key role in building effective business relationships. For employers looking to establish or expand their presence in the country, it helps to be aware of how language functions in legal, social, and workplace settings. While no statutory language requirements govern day-to-day business practices, the legal system defaults to Vietnamese in disputes, making it vital that all documentation be made available in the official language when necessary.
Official language in Vietnam
Vietnamese is the de jure and de facto national language. It is the language of government, public administration, court proceedings, and education. For employers, this means that employment contracts, company policies, and compliance documents are typically required to be written in or translated into Vietnamese. In case of legal disputes, the courts will only consider Vietnamese-language documents.
Languages spoken in Vietnam
Aside from Vietnamese, the country is home to over 50 ethnic minority groups who speak a variety of indigenous languages. However, these are largely used in informal, community settings. In business environments, Vietnamese dominates. Employers will find that most employees, government officials, and service providers operate almost exclusively in Vietnamese, especially outside of major urban centres. The variety of languages spoken in Vietnam reflects its diversity, but in the workplace, this has minimal impact unless you are working in remote areas or with indigenous communities.
Language policies in Vietnam
Vietnam’s government promotes the use of Vietnamese in all official capacities. There are no mandatory bilingualism or translation laws for business use, but companies operating in foreign languages must ensure that key documents—such as contracts or policies—are available in Vietnamese. This approach reflects the language policy in Vietnam, which aims to preserve national identity while accommodating global integration. Misunderstandings arising from untranslated documents can lead to complications, especially in the case of labour disputes.
English language in Vietnam
While Vietnamese remains the main business language in Vietnam, English is widely taught in schools and universities and is gaining traction in the corporate sector. Younger professionals, particularly in sectors like IT, finance, and hospitality, often have a working proficiency in English. However, fluency is not guaranteed, especially in smaller cities and government offices. The use of English language in Vietnam tends to be informal and context dependent.
That said, international employers may still benefit from hiring bilingual staff or using professional translation services. For internal operations, some companies maintain dual-language documents, especially when working across regional offices or with foreign teams.
Business language in Vietnam
Effective business in Vietnam is not just about the language—it is also about cultural fluency. Vietnamese communication often values politeness, indirectness, and deference to hierarchy. Learning a few basic Vietnamese phrases and showing respect for these norms can go a long way in building trust. While there is no law requiring use of the official languages in Vietnam in private communication, employers should plan around Vietnamese being the default in any formal or legal context.
For employers, language is not just a tool—it is part of the regulatory and cultural framework. Preparing accordingly helps minimise risk and enhances working relationships in Vietnam.
Payroll setup in Vietnam
Setting up payroll in Vietnam can be complex, particularly for foreign employers unfamiliar with the country’s employment laws and regulatory systems. While Vietnam offers a growing talent pool and competitive labour costs, the nuances of local tax rules, social insurance contributions, and payroll caps require careful navigation. Employers must also comply with evolving labour regulations and ensure that all withholdings and contributions are accurately calculated and remitted. Below is a guide for employers on navigating payroll setup in Vietnam.
Vietnam’s payroll system
Vietnam has a structured and well-regulated payroll framework. However, a foreign company cannot directly hire Vietnamese staff unless it has a licensed legal presence in the country. For businesses without a registered entity, working with a local partner or Employer of Record (EoR) is typically required.
Employers must register employees with the Social Insurance Fund and fulfil monthly contributions. For Vietnamese employees, this includes contributions to:
- Social insurance: 17.5% by the employer, broken down into 14% for the retirement and survivorship fund, 3% for sickness and maternity, and 0.5% for work-related injury and disease.
- Health insurance: 3% by the employer.
- Unemployment insurance: 1% by the employer.
- Trade union fees: 2% by the employer, if applicable.
In addition, employers must withhold employee contributions:
- Social insurance: 8%.
- Health insurance: 1.5%.
- Unemployment insurance: 1%.
- Trade union fees: 1%, if the employee is a union member.
The base salary used to calculate contributions is capped at 20 times the general minimum monthly salary, currently set at 1,490,000 VND (approximately 64 USD).
For foreign employees with a valid work permit and a contract of one year or more, the employer must also contribute 17.5% to social insurance and 3% to health insurance. Employee contributions for foreign workers include 8% for social insurance and 1.5% for health insurance. The same salary cap applies.
Best practices when setting up payroll in Vietnam
Employers should conduct a compliance audit before onboarding staff to ensure payroll practices align with local law. One recommended step is to engage a local payroll provider familiar with Vietnam’s payroll system, especially when managing multi-location teams or multiple tax zones.
It is also important to budget correctly for gross-to-net salary calculations. Employers are responsible for deducting and remitting personal income tax from employee wages and must submit declarations to the tax office on a monthly and annual basis. Finalisation of tax obligations often falls to the employer.
Additionally, establishing strong internal processes for time tracking, payslip issuance, and contract review can prevent legal or financial disputes. Employers should also monitor statutory updates, as rates for social insurance or the minimum salary may change yearly.
Accurate, timely payroll not only supports legal compliance but also builds employee trust. A solid payroll foundation is critical for any organisation planning long-term operations in Vietnam.
Easily hire workers in Vietnam with CXC
Hiring workers in Vietnam typically requires setting up a legal entity, a process that can be both expensive and time-consuming. But there is a simpler way.
With CXC as your Employer of Record (EoR), you can hire in Vietnam and beyond without the complexity of local compliance. We take care of the essentials such as payroll, benefits, employment contracts, and more. This way, you can focus on what matters most: growing your business.
Compliantly hire workers anywhere with CXC
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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