Guide · Compare options
EOR, entity, PEO or contractor?
The four ways a foreign company can engage people in Vietnam, side by side, and how to pick the one that fits your stage.
Updated 22 October 2026 · General information, not legal or tax advice
Short answer
EOR, your own entity, a PEO or a contractor: which fits?
For a foreign company hiring its first people in Vietnam, an employer of record is usually the fastest and lowest-risk route: there is no company to set up, a Vietnamese national can start as soon as the contract is signed, and every employer obligation sits with a licensed local company. Your own entity becomes cheaper once you employ enough people for long enough, because it replaces per-employee fees with fixed overheads, but it takes about one to three months to incorporate. A US-style PEO has no clean basis in Vietnamese law, which recognises one employer per labour contract. An overseas “contractor” who works under your direction is legally an employee under Article 13 of the Labour Code, and reclassification brings back-dated insurance of about 32% of gross pay plus tax and fines.
Side by side
Four ways to engage people in Vietnam.
| Employer of record | Your own entity | PEO (co-employment) | Independent contractor | |
|---|---|---|---|---|
| Legal employer | The EOR's Vietnamese company | Your subsidiary | Shared — not recognised in Vietnamese law | None, on paper |
| Vietnamese entity needed | No | Yes | Yes, in practice | No |
| Time to first hire | Days (Vietnamese nationals) | About 1–3 months to incorporate | Depends on your entity | Immediate |
| Who carries compliance | The EOR | You | Unclear | You, if reclassified |
| Monthly cost | Salary, contributions and a fee per person | Salary, contributions and fixed overheads | Payroll fee on top of your entity | Fee only — until reclassified |
| Best for | Testing the market, small and mid-sized teams | Large permanent teams, local revenue | Payroll help for an existing entity | Genuinely independent, short projects |
How to decide
Pick by stage, not by habit.
- One to a few hires, or testing Vietnam: an EOR. No setup, no fixed cost, and you can leave by ending a service agreement.
- A large team you will keep for years, or local customers to invoice: your own entity, often after starting with an EOR.
- You already have an entity and want help with payroll: a payroll service, which is what most “PEO” offers in Vietnam really are.
- A short, self-directed project delivered against an outcome: a genuine contractor — only if you do not manage their day.
Each option has its own guide: EOR or your own entity, PEO in Vietnam and contractor or employee.
Sources: Labour Code 2019, Article 13; Law on Investment 2020 and Law on Enterprises 2020.
Questions
Choosing how to hire in Vietnam: frequently asked questions
What is the fastest way to hire in Vietnam?
An employer of record. A Vietnamese national can usually start within days of signing, with no company to set up.
Is a PEO the same as an EOR in Vietnam?
No. A PEO shares employer duties, which Vietnamese law does not recognise. In practice “PEO Vietnam” offers are either an EOR or a payroll service for an existing entity.
Can I hire people in Vietnam as contractors?
Only if they are genuinely independent. If you direct their daily work, Article 13 of the Labour Code makes it employment.
When does my own entity become cheaper than an EOR?
When the per-person EOR fees for your team exceed the fixed cost of running a company — accounting, a chief accountant, audit and filings — and you expect to stay for years.
Hiring in Vietnam? We handle all of this as your employer.
Nhân Kiệt employs your team, runs payroll, insurance, tax and work permits. Fee: US$99–199 per employee a month, plus VAT.
Request a quote