Why You Should Consider Hiring in Vietnam
Vietnam’s young, educated, and skilled workforce is one of the main reasons why businesses should consider incorporating an overseas company in Vietnam to hire locals in the country. The country has a population of over 97 million, with an abundance of talent in engineering, software development, design, and manufacturing, making it an attractive destination for companies looking to tap into Southeast Asia’s growing market.
Moreover, Vietnam’s economy is consistently expanding, with the country’s GDP growth rate among the highest in the world, presenting an excellent opportunity for businesses to expand and grow their operations. Whether it’s through outsourcing or establishing a local presence, hiring Vietnamese talent can provide companies with a competitive advantage in this fast-growing market.
This article will give you 02 main ways to employ Vietnamese talent in Vietnam
Two Ways to Employ Vietnamese Talents
As previously stated, Vietnam is an attractive market to enter due to its potential and relatively low labor costs compared to other markets. Therefore, it is a wise choice for businesses seeking to expand their operations.
However, to properly hire staff in Vietnam, you need an entity to sign labor contracts with them and fulfill the responsibility for Social Security payment as an employer. You can do this via your own business entity or through a third-party agency.
This article will explain how these two approaches work: establishing an entity in Vietnam or utilizing the services of an Employer of Records (EOR) provider. The advantages and disadvantages of each option will be further elaborated below.
Option 1: Incorporating a Foreign Company in Vietnam
The most straightforward approach is to incorporate a foreign direct investment (FDI) company in Vietnam to host your team directly. Depending on your needs, you may choose to form a company, branch, or representative office, each with varying establishment requirements, advantages, and disadvantages. Once your abroad company is incorporated, you will be able to hire your first employee in Vietnam in due time. It usually takes a minimum of 1 month to have a company successfully incorporated. Iris International provides services to help you with the setup and operations of your businesses in Vietnam from day 1.
However, it is worth noting that incorporating a company in Vietnam is a lengthy and expensive process for many companies, requiring various certifications and sub-licenses depending on your chosen business area, as well as location, personnel, and operational costs. While a strong commitment to entering the market is demonstrated through this route, failure to achieve success can result in significant losses.
If your only wish is to hire staff in Vietnam and not much into other business activities, you can consider the approach of hiring without incorporating a company. It means, you will have to find a third party, a local partner who can help you host your team under themselves, and you will manage and run your team under their payroll. This service is called the “Employer of Record” (EOR) service. This approach allows you to test the market, lower costs, and defer your final decision to incorporate a company until you have a better understanding of the local business environment.
Option 2: Using an Employer of Record (EOR) Service
As mentioned above, if you are considering entering the Vietnamese market but are unsure about its feasibility, incorporating a company in Vietnam may not be the most optimal option. Instead, we recommend utilizing an Employer of Record (EOR) service to manage a local team and test the market.
An EOR service is a comprehensive package of services provided by reputable business consultants or HR firms. They are designed to recruit and manage local teams in countries where clients may not have or do not want to establish an entity. With an EOR service, these firms handle employee recruitment, contract signing, and management on behalf of their clients. Additionally, they provide salary, benefits, and other administrative operations for an annual fee. Essentially, EOR services act as an extension of the client’s HR team.
This service is most suitable for companies that want to enter a foreign market but are not yet sure if it’s a good investment or companies that are in the experimental phase of testing the market’s potential before making a final decision. By utilizing an EOR service, companies can establish a visible presence in the market without spending time and money to set up an entity. Moreover, this service allows companies to withdraw from the market with very little risk.
Hiring Vietnamese employees requires a good understanding of local laws and regulations, such as types of contracts, taxes, obligations, required benefits, and more. As a new entrant to the market, it is better to have a local firm with strong human resource skills to help deal with these requirements beforehand. EOR services provide a cheaper business solution than hiring an entire HR department to work in the new entry market. By choosing an EOR service, companies can focus on their core business activities while ensuring compliance with local regulations and laws.
How Iris International Can Assist You
Iris International is a top choice for companies looking to incorporate a company in Vietnam or a reliable and efficient Employer of Record (EOR) service provider in Vietnam. Our team of experts is dedicated to ensuring that all aspects of managing your employees are taken care of, allowing you to focus on growing your business. With our professional and rich experience in this field, we have gained the trust of thousands of partners all over the world. Whether you are a small startup or a large corporation, we have the expertise to help you succeed in Vietnam’s dynamic and competitive business environment. Contact us today to learn more about how we can help your business thrive.
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