Professional Employer Organization (PEO) in Vietnam

What is a PEO?

A PEO is a professional employer organization. It’s a service for companies looking to outsource their HR responsibilities.

A PEO can manage your onboarding, benefits packages and payroll, whilst also ensuring that your business complies with labor and tax laws wherever in the world your employees are based.

This makes it much easier for SMEs to expand their operations globally. You no longer need a dedicated in-house HR team and you don’t have to spend time on complex HR and compliance issues.

With a PEO partner, you can hire the best talent in Vietnam and beyond, building a global team and exploring new opportunities around the world.  

Want to start hiring in Vietnam? Find out if a PEO in Vietnam is right for your business by chatting to one of the Skuad team today.

What are the benefits of using a PEO provider in Vietnam?

Hire the best talent in Vietnam (and the rest of the world)

Managing a remote team has never been easier. We have the tech and communication tools to make it happen. So why not expand your talent pool globally?

Labor and skills shortages become a thing of the past when you recruit beyond your local geographic area. You can find and hire the very best talent – no matter where they live in the world.

In Vietnam, the population is young, with 1 million young adults entering the labor market each year. What’s more, over the past few decades, the government has invested heavily in STEM education. This makes the country a great place to source young tech talent.

If your ideal employees happen to live in Vietnam, a PEO can help you to hire and pay them, dealing with all the red tape and keeping your business on the right side of Vietnamese labor laws.

Avoid setting up your own legal entity in Vietnam

If you want to hire employees in Vietnam and you don’t choose to work with a PEO service in Vietnam, you have one other option – to set up a subsidiary in Vietnam.

This means going it alone – working with teams of lawyers and trying to understand Vietnamese employment laws and tax requirements.

It’s a complex, costly and time-consuming process. You have to consider incorporation costs as well as the expenses involved in traveling to and from Vietnam as you set up your satellite office.

With a PEO in Vietnam, you get to skip this step. Pick the right PEO partner and they’ll already have an owned entity in Vietnam. This means they can legally hire Vietnamese employees on your behalf.

They take on all HR responsibilities, leaving you to focus on getting the most out of your new employees.

Want to know how much it costs to hire employees in Vietnam with the help of a PEO? Take a look at Skuad’s straightforward pricing structure.

Maintain hiring flexibility

If you choose to invest in a Vietnamese subsidiary for your business, you’ll want to get your money’s worth.

That might mean hiring a large Vietnamese team and committing to doing business in Vietnam over the long term. But what if you want to hire just one standout Vietnamese talent? Or what if you find that the market isn’t quite the right fit for your enterprise?

When you partner with a PEO, you don’t have to set up a subsidiary because your PEO service in Vietnam has already done it for you.

This means you maintain flexibility – to hire as many or as few Vietnamese employees as you like, to hire in Vietnam and other countries, and to exit those countries if they stop proving an asset.   

Become a globally competitive employer

When you work with a PEO, it’s easier to outpace your competition.

You can:

• Hire globally – finding the very best talent and making the most of distributed teams
• Gain cultural awareness – with the help of a local Vietnamese team, you get to know your new market inside out
• Save on unnecessary costs – by avoiding the investment of company incorporation in Vietnam
• Stay agile – don’t commit to the one location – hire and explore new markets around the world

Ensure that your business complies with statutory requirements in Vietnam

Companies operating in Vietnam face fines, penalties and even business bans if they fail to comply with tax and employment laws in Vietnam.

But a PEO service in Vietnam is already up-to-speed on exactly what you need to do to keep your operations 100% compliant.

A team of local employment experts will ensure that you meet your statutory requirements as an employer, and pay all relevant taxes and contributions too.

Here are just some of things you need to know when hiring in Vietnam:

Payroll in Vietnam

The local currency is the Vietnamese Dong (VND).

The minimum wage in Vietnam is set according to the region or zone in which your employees live. Zone 1 covers big urban areas, including Hanoi, Ho Chi Minh City and Hai Phong.

You can expect to pay the following salary minimums per month:

• Zone 1: 4,420,000 VND (193 USD)
• Zone 2: 3,920,000 VND (171 USD)
• Zone 3: 3,430,000 VND (150 USD)
• Zone 4:  3,070,000 VND (134 USD)

Employers in Vietnam usually pay a 13^th month bonus at the end of each year.

An employee shouldn’t work more than 48 hours per week. Employees can work overtime, but no more than 200 overtime hours per year. Overtime pay is calculated at 150% on weekdays, 200% on weekends and 300% on public holidays.

Tax and employer contributions in Vietnam

Employee tax contributions

In Vietnam, income tax rates for employees are as follows:

• Up to 5,000,000 VND – 5%
• 5,000,001 VND - 10,000,000 VND - 10%
• 10,000,001 VND - 18,000,000 VND – 15%
• 18,000,001 VND - 32,000,000 VND – 20%
• 32,000,001 VND - 52,000,000 VND – 25%
• 52,000,001 VND - 80,000,000 VND – 30%
• 80,000,001 VND and above – 35%

Employee payroll contributions

Employees must contribute 10.5% of their salary to cover social insurance, health insurance and unemployment insurance.

Employer payroll contributions

Employers must contribute 21.5% of an employee’s salary to cover social insurance, health insurance and unemployment insurance.

Corporate tax in Vietnam

In Vietnam, the corporate tax rate is 20%.

Paid leave in Vietnam

Public holidays: There are 13 paid public holidays in Vietnam.

Sick leave: Employees are entitled to 30 days of paid sick leave per year.

Maternity leave: Women are granted a minimum of six months maternity leave. Breastfeeding mothers are also entitled to a paid 60 minute break each day to nurse a child, for up to 12 months after the child’s birth.

Paternity leave: Men are entitled to between 5 and 14 days paternity leave.

Parental leave: Parents are entitled to up to 20 days parental leave per year until their child is aged 3. They are then entitled to up to 15 days parental leave per year until their child is aged 7.

Bereavement leave: All employees are entitled to three days paid leave following the death of a family member.

Marriage leave: All employees are entitled to three days paid leave when they get married.

Skuad can take care of all employment law and tax compliance – so you don’t have to. Book a platform demo to find out more.

What does it cost to build a team in Vietnam?

The cost of building a team in Vietnam depends upon which of the following two options you decide to take.

Company incorporation in Vietnam

In Vietnam, company registration costs an international business tens of thousands of dollars. You also have to factor in:

• legal costs
• travel costs
• office space costs
• banking costs
• HR training costs

Your time is also valuable – and you’ll spend lots of it navigating the complex legal requirements involved in setting up a business in Vietnam.

Partnering with a PEO in Vietnam

If you’re an SME, you probably don’t have the same budget as a huge enterprise. You might also prize your business agility. If this sounds familiar, a PEO in Vietnam is a much better option than company incorporation.

By working with a PEO, you get to hire, pay and manage Vietnamese employees for a fraction of the cost, whilst still retaining flexibility.

The cost of a PEO service in Vietnam depends upon the provider and the package you choose.

Here at Skuad, prices start from $199 per employee per month. For this flat fee, our clients get an employer of record service along with payroll, benefits, onboarding and compliance management.

A few added benefits? You can make your first hire for free, make global payments free of charge and cancel at any time.

We can also get you up and running quickly. Work with us and you can be hiring in Vietnam within a matter of days.

Ready to start onboarding and paying employees in Vietnam? Schedule a Skuad demo and one of our experienced team will be happy to talk you through the platform and our service.