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SALARY PAYMENT IN Vietnamese Dong (VND, ₫)

CONTRACT LANGUAGES Vietnamese / English

PAYROLL TAX 21.50%

PAYROLL CYCLE Monthly

TIME TO HIRE 24 hours

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Hire Employees in Vietnam — Overview

Vietnam is an appealing option for companies looking to source talent overseas, due to its highly-skilled young workforce, low-cost of living, and large pool of remote workers. Companies looking to hire talent in Vietnam should carefully consider factors such as language capabilities, cultural differences, legal requirements and regional market dynamics before making any hiring decisions.

Here we explain the key things you need to know before hiring employees in Vietnam.

Facts & Stats

Population 

98.17M (55.1M labor force)

Capital City

Hanoi

Languages Spoken

Vietnamese

Currency

Vietnam đồng (VND)

GDP per capita

$3,694

Ease of Doing Business

70th in the world

Minimum Wage

VND 3.45M-4.96M/month, depending on region

Average Wage

3.45M VND/month

Paid Leave

12 days (14-16 days in some hazardous occupations)

Vietnam: Business Environment

Business outlook in Vietnam

Despite being one of the countries hit hardest by the COVID-19 pandemic, Vietnam ended 2021 with a GDP growth rate of 2.58%. This marked two consecutive years of growth since the onset of the pandemic in 2020, making it one of few global economies to experience such success. According to the latest figures from the World Bank, growth is expected to more than double in 2022 from 2.6% to 5.5%.

This growth has been actively nurtured by the Vietnamese Government which encourages foreign investment through tax incentives and significant infrastructure projects,

The economic position of Vietnam has also been solidified in recent years through various Free Trade Agreements (FTAs), as well as membership in the Association of Southeast Asian Nations (ASEAN).

Vietnam’s continued positive trajectory means it is one of the fastest growing nations in the region.

Business regulation in Vietnam

When it comes to business regulation, Vietnam’s employment regulations are the most laws for any global business to be aware of. The primary legal framework governing labor relationships in the country is the Labour Code 2019, which came into effect on 1 January 2021.

Under Vietnam’s labor laws, workers have rights to a safe working environment, maximum working hours and a minimum wage. The Labour Code permits three types of labor contracts: indefinite-term, fixed-term (12 to 36 months) and short-term or seasonal contracts (less than 12 months). Note, however, that indefinite-term contracts are not permitted for foreigners in Vietnam.

Collective bargaining agreements are also recognized. As a member of the International Labour Organization (ILO) and the World Trade Organization (WTO), Vietnam is committed to creating and maintaining safe, fair and equitable employment conditions.

Before hiring employees in Vietnam, it is important for employers to be aware of their obligations in order to ensure full compliance.

Business culture in Vietnam

Business culture in Vietnam has some similarities with business culture in other Asian nations. Important elements include:

  • Hierarchy. For example, in a business meeting people generally enter in order of importance – the highest ranking arrives first, and so on. This is also the order of introductions.
  • Trust focus. Third-party introductions are common in Vietnam business relationships, as people prefer to work with those they know and trust.
  • ‘Saving face’. As with other Asian cultures, where you disagree with someone may be preferable not to do so in public, as this can be seen as an affront to another’s dignity or reputation.

Recruiting employees in Vietnam

Recruiting employees in Vietnam – Overview

Recruiting in Vietnam has much in common with recruitment in other Asian nations — online applications and interviews are becoming the norm. Due to the emphasis placed on personal relationships in Vietnam business relationships, it can be quite common for new employees to be found via third parties and Vietnam recruitment agencies.

Most important recruitment tools in Vietnam

There are several job sites that you should consider using in your Vietnam talent search:

  • Vietnamworks
    Vietnamworks is Vietnam’s largest job platform, and a one-stop hiring shop, focused on the IT industry in Vietnam. This is an important site for any business looking on outsourcing its IT support to Vietnam
  • Indeed
    As in other countries, Indeed is a major site for advertising jobs in Vietnam.
  • Careerlink
    Careerlink is a professional jobs site, with a full suite of recruitment tools, including a CV builder.
If you need specialist support for your candidate search in Vietnam, you might also consider a specialist recruitment firm. Horizons provides such support to over 180 countries worldwide. Contact us for a free consultation and demo.

Interviewing candidates in Vietnam

Recruiting employees in Vietnam – Overview

While interviewing candidates in Vietnam has much in common with interviewing elsewhere, keep in mind features of Vietnam business culture that willl play into the process:

  • Formality — both candidates and interviewers will be expected to be in business dress and managers should be addressed formally.
  • Hierarchy — the most senior interviewers will lead the interview, and be introduced first.
  • ‘Saving face’ — interviewers should be aware that candidates may be reluctant to say ‘no’, and communicate disagreement in more subtle ways.

 

While interviewing candidates in Vietnam has much in common with interviewing elsewhere, keep in mind features of Vietnam business culture that willl play into the process:

  • Formality — both candidates and interviewers will be expected to be in business dress and managers should be addressed formally.
  • Hierarchy — the most senior interviewers will lead the interview, and be introduced first.
  • ‘Saving face’ — interviewers should be aware that candidates may be reluctant to say ‘no’, and communicate disagreement in more subtle ways.

Can I ask the candidate’s previous salary in Vietnam?

There is no prohibition on doing so in Vietnam.

What is the typical salary increase at a new job in Vietnam?

Many candidates in Vietnam would expect a 10-20 percent increase when starting a new job. However, it depends on the industry. Those in the high-demand IT industry can often request more.

Onboarding employees in Vietnam

Onboarding employees in Vietnam – Overview

The process of onboarding new employees in Vietnam is similar to elsewhere in southeast Asia, but with a special focus on applicable aspects of Vietnam labor law. Employees need a compliant, written employment contract, and businesses should ensure that all necessary benefits are in place.

Note also, that as of January 1, 2021, Vietnam’s Labor Code was updated to include a new definition of employee: “employee” is a person who works for an employer under an agreement, and is paid, managed, and supervised by the employer.

This means that in Vietnam, someone who might have been classified as a ‘contractor’ when being onboarded, may actually be an employee. You should seek professional advice to ensure that you don’t engage in this employee misclassification.

You can read more about this issue at What is the difference between an employee and an independent contractor?

Best remote working tools to use in Vietnam

As a major location for IT professionals, tools that dominate in that industry are also popular in Vietnam. 

For communication and project management, Slack, Trello, and Github are popular tools. 

In addition to the standard communication tools, such as Skype and Teams that are popular elsewhere, Zalo is the most popular chat tool within the country. 

Holidays in Vietnam

In Vietnam, there are 9 public holidays each year. The Tet Lunar New Year is a week long holiday. Public holidays are as follows:
Date Holiday name
1 Jan Monday International New Year’s Day
2 Jan Tuesday  Day off for International New Year’s Day
8 Feb-14 Feb Thursday-Wednesday Tet Holiday
9 Feb Friday Vietnamese New Year’s Eve
10 Feb Saturday Vietnamese New Year
18 Apr Thursday Hung Kings Festival
30 Apr Tuesday Liberation Day/Reunification Day
1 May Wednesday International Labor Day
2 May Thursday Day off for Liberation Day/Reunification Day
2 Sep Monday Independence Day
3 Sep Tuesday Independence Day Holiday

What is the typical salary increase employees in Vietnam expect?

Currently, the expected salary increase is six percent annually.

FAQs

Both are options, depending on the needs of your business. Do be aware, however, that Vietnam’s labor law has an expansive definition of ’employee’, that could cover some of the professionals you seek to hire as a contractor.

One option is to hire all workers in Vietnam through a Vietnam Employer of Record solution, where a third party hires all staff and processes payroll and benefits on your behalf.

Yes, it is possible to hire foreigners in Vietnam. The best cities to target for hiring foreigners in Vietnam are Hanoi and Ho Chi Minh city.

The process for opening a Vietnam subsidiary is: 

1. Apply for an Investment Registration Certificate from the Ministry of Planning and Investment. 

2. Apply for a Business Registration Certificate (BRC), sometimes known as a Enterprise Registration Certificate (ERC).

3. Register for tax.

4. Make your initial Capital contribution. While there is no minimum across, the board, minimums do apply in particular industries. This amount must be submitted within 90 days. 

5. Apply for special licenses or permits, if applicable. Some industries requires specific licenses or permits. Check whether that applies in your industry. 

There are two key options: Either set up a subsidiary in Vietnam and directly hire employees from that entity. Or, engage a Vietnam EOR solution, like Horizons, where the EOR becomes the legal employer of your Vietnam workforce and takes care of payroll, benefits and compliance on your behalf.

Setting up a subsidiary can make sense if you have broader business operations in Vietnam (e.g., if you want to enter into local business contracts with Vietnamese companies). If your focus is simply hiring staff in Vietnam, an EOR solution usually makes more sense.

Hiring in Vietnam, Made Easy

Your business can easily hire employees in Vietnam without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

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