Guide · Tax risk
Permanent establishment risk in Vietnam.
When people working for you in Vietnam could make your company taxable there, and how to keep the risk low.
Updated 22 October 2026 · General information, not legal or tax advice
Short answer
Does hiring through an EOR create a permanent establishment in Vietnam?
Not by itself. Employing staff through a Vietnamese employer of record keeps the arrangement as ordinary local employment by a licensed Vietnamese company, which helps. But whether a foreign company has a taxable permanent establishment in Vietnam depends on what the worker does, not on who employs them. The risk is highest for sales staff and country managers who habitually negotiate or conclude contracts on behalf of the overseas company, because a dependent agent with that authority can create a permanent establishment. Engineers, designers, support agents and operations staff who deliver work under direction carry little of this risk. The double-tax treaty between Vietnam and your home country sets the exact test, so take tax advice before hiring a senior sales lead.
Risk by role
Which roles carry the risk.
| Role | Risk | Why |
|---|---|---|
| Software engineers, designers, analysts | Low | Deliver work to the client; do not sell |
| Customer support, operations | Low | Serve existing customers under direction |
| Marketing and business development | Medium | Low if they only promote; higher if they negotiate |
| Sales representatives | Higher | May negotiate and close contracts |
| Country manager | Higher | Often has authority to bind the company |
Safeguards
How to keep the risk low.
- Keep contract signing and final price approval with people outside Vietnam.
- Describe the role accurately in the employment documents, without authority to bind the company.
- Do not give the employee a power of attorney to sign for the overseas company.
- Invoice Vietnamese customers from outside Vietnam, or set up an entity if local sales grow.
- Check the double-tax treaty with your home country and take tax advice for senior commercial roles.
Related: hiring by role and EOR or your own entity.
General information, not tax advice.
Questions
Permanent establishment in Vietnam: frequently asked questions
What is a permanent establishment?
A taxable presence of a foreign company in another country, for example through a fixed place of business or a dependent agent who concludes contracts for it.
Does an EOR remove permanent-establishment risk?
It helps, because the worker is employed by a Vietnamese company, but the risk depends on what the worker does. Sales staff who conclude contracts can still create it.
Are software developers a permanent-establishment risk?
Generally low, because they deliver work under direction rather than negotiating or concluding sales.
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