{"id":14160,"date":"2026-08-19T11:01:23","date_gmt":"2026-08-19T04:01:23","guid":{"rendered":"https:\/\/thesentry.com.vn\/?p=14160"},"modified":"2026-08-19T11:01:23","modified_gmt":"2026-08-19T04:01:23","slug":"vietnam-labor-law-for-foreign-companies","status":"publish","type":"post","link":"https:\/\/thesentry.com.vn\/en\/vietnam-labor-law-for-foreign-companies\/","title":{"rendered":"How to Hire Your First Employees in Vietnam: Labor Law Basics for Foreign Companies"},"content":{"rendered":"

Hiring your first employee in Vietnam involves more than writing an offer letter. Vietnam’s Labor Code applies the same way to a five-person startup as it does to a multinational, and foreign companies who skip the paperwork usually find out the hard way, through a labor inspection or a back-payment demand from the social insurance authority.\u00a0<\/span><\/p>\n

Compliance here is detailed rather than complicated, and most of it comes down to following the right sequence rather than solving anything genuinely difficult.<\/span><\/p>\n

This guide covers Vietnam labor law for foreign companies from the ground up, from what has to happen before you sign anyone, through contracts, wages, working hours, and what to do if the employment relationship ends.<\/span><\/p>\n

Setting Up to Hire: What Comes Before Your First Employee<\/b><\/h2>\n

A foreign company cannot legally hire staff in Vietnam without a registered presence first. That usually means a wholly owned local entity, though a growing number of companies now use an Employer of Record to skip that step entirely.<\/span><\/p>\n

Entity vs Employer of Record<\/b><\/h3>\n

The two paths lead to very different timelines and levels of control, and the right choice usually comes down to how confident the company is in its Vietnam headcount plan for the next year or two.<\/span><\/p>\n\n\n\n\n\n
Approach<\/b><\/td>\nSetup time<\/b><\/td>\nWho is the legal employer<\/b><\/td>\nBest fit<\/b><\/td>\n<\/tr>\n
Local entity<\/span><\/td>\n3 to 6 months<\/span><\/td>\nYour own Vietnamese company<\/span><\/td>\nTeams of 10 or more, long-term operations<\/span><\/td>\n<\/tr>\n
Employer of Record<\/span><\/td>\n1 to 2 weeks<\/span><\/td>\nThe EOR provider, on your behalf<\/span><\/td>\nSmall teams, fast market testing<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

An entity gives full control over contracts, branding, and how the team is structured, but it comes with registered capital requirements and ongoing corporate governance.\u00a0<\/span><\/p>\n

An<\/span> Employer of Record<\/span><\/a> can typically get a first hire started within days, since the provider already holds the local registrations needed to run payroll and file social insurance.<\/span><\/p>\n

Registrations You Need Before Day One<\/b><\/h3>\n

Once the entity is in place, two separate registrations have to happen before any employee starts.<\/span><\/p>\n