PEO in Vietnam – A Door to the Next Top Market | INS Global
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PEO in Vietnam

Hire Globally, Pay Locally, Expand Effortlessly


Vietnam is a rapidly expanding country that’s usually tipped to be the next big target market for companies worldwide. Since the 1980’s its economy has opened, and many companies now seek to enter Vietnam to make the most of the massive opportunities it presents.  

While the growth has been impressive, regulatory and administrative hurdles still exist and pose a significant difficulty for prospective businesses. That is why many turn to local PEOs to aid their market entry and give themselves a sense of assurance regarding regulatory compliance.  

A PEO (Professional Employer Organization) is a services provider with a local presence who can hire employees and manage HR responsibilities for your staff on your behalf. This service allows you to avoid the hassles of setting up and establishing a new company internationally.  

INS Global is your PEO services provider of choice, offering you all the HR outsourcing services in Vietnam that you need to succeed.   

PEO in Vietnam - Summary

5 Benefits a Vietnam PEO Can Give You

Legal Regulatory Compliance

A PEO allows you access to a team of legal experts specialized in your target market, meaning you’re covered from day one from any potential regulatory problems 

Flexibility

By using a PEO service, you massively reduce your initial setup time and costs, allowing you far more freedom to approach operations in Vietnam in the way you see fit  

Support Whenever/Wherever

Receive support and guidance 24/7 from your single point of contact who’s only ever a phone call or email away wherever you are in the world 

Accelerated Market Entry

Company Incorporation in a new market can take months, but a PEO requires only a few days to begin operations 

A Range of Potential Services

PEOs offer HR support for whatever you need, including payroll, recruitment, tax compliance, contractor management, etc. 

Why Choose a PEO Over Company Incorporation?

Establishing a new company in a foreign market can be a seriously troublesome prospect. More than a hassle, the potential delays and costs come at a time when you need to be thinking first and foremost about your success. 

A PEO in Vietnam allows you to get your employees started in a matter of days, so you don’t have to spend months understanding complex and unfamiliar local business and labor regulations.  

  • Gives you a sense of security that comes from assured legal compliance 
  • Gets you started in your target market in a matter of days 
  • Increases your ability to avoid fines and fees 
  • Provides you with a partner that understands the target market 
testimonial from Manuel Ramos

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting in a market like China. Understanding the market doesn’t mean you need to set up a company immediately. 

5/5

How Does a PEO Work?

INS Global’s PEO/EOR solution gives you access to vital HR services in 4 simple steps: 

  1. Meet with an INS PEO/EOR expert to discuss your requirements and choose from a range of potential services 
  2. We provide you with access to our local entity in Vietnam through which we can hire your employees 
  3. We organize and manage every element of payroll and HR that you desire for your employees in Vietnam 
  4. You and your employees operate as usual on the tasks you need to succeed 

How Do PEOs and EORs Differ?

PEOs are often seen as identical to EORs (Employer of Record). Typically in many countries, the two function identically, but there may be some differences in the services they offer.  

  • A PEO provides HR services to the employees of a client company 
  • These services can include employment contract management and compliance assurance, tax and social contribution calculation, payroll management, payslips, annual/sick leave organization, etc.  
  • The PEO makes a contract with the client company for these services 
  • An EOR legally and officially hires employees on behalf of a client company 
  • The EOR is liable for all elements of an employee’s HR as they are the official employer 
  • A contract is made directly with the employee, as instructed by the client company 

 

In Vietnam, INS offers the full range of services available to both as your global PEO and EOR services partner 

Labor Law in Vietnam

Employment Contracts In Vietnam

Labor law in Vietnam is regulated by the Labor Code, which was amended in 2021. It includes most of the regulations regarding the treatment of employees, and employers face harsh penalties if they are found to be infringing these regulations.  

Employment contracts in Vietnam must be written to avoid costly labor disputes or the possibility of problems down the line. Locals must be paid in Vietnamese Dong, while non-Vietnamese can be paid in foreign currencies. 

Contracts can be for definite or indefinite periods. A fixed period contract can be up to 36 months. Contracts with foreigners can be up to 24 months due to visa restrictions.  

Probation periods in Vietnam can be quite long, depending on the situation. The longest available option is 180 days.  

Vietnam has a minimum wage, with the amounts set depending on the region.  

Working Hours and overtime

A working week should consist of no more than 48 hours or 8 hours per day.  

Overtime should be no more than 4 hours per day or 40 per month. Employers may petition for a temporary extension to the maximum amount of overtime in the case of an emergency with 15 days’ notice.  

Overtime is paid at 1.5x standard salary for extra hours, 2x standard salary for additional hours on the weekend, or 3x standard salary for hours during a public holiday or paid annual leave.  

Holidays and Annual Leave

Employees in Vietnam are eligible for a minimum of 14 days paid annual leave and 11 public holidays. Employers are expected to make additional arrangements in cases where public holidays fall on a weekend.  

Foreign employees also gain two days of paid leave for their country’s traditional New Year and National Day.  

Sick Leave

Employees who have paid less than 15 years of premiums in the Social Insurance Fund are entitled to 30 days of paid sick leave. 

Sick leave is paid at 75% standard rate by the Social Fund, not by the employer. The amount of sick leave rises to 40 days if the employee has paid between 15-30 years of premiums, and 60 days for 30+ years of payment.   

Employees in hazardous jobs or specific regions may be entitled to more sick leave.  

Maternity Leave

Maternity leave allowance is 6 months in Vietnam, paid at 100% standard salary by the Social Fund.  

New mothers are also eligible for a payment of 2 months’ full salary after giving birth.  

Paid Paternity leave is 5 days. 

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FAQs

No, it is necessary to use a local entity abroad to comply with each country labor law.

Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.

The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.

Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.

In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.