HANOI - As multinational companies accelerate hiring in Vietnam, many are bypassing the lengthy process of establishing local subsidiaries and instead turning to employer of record services to onboard workers quickly and compliantly.
The shift reflects a practical reality: setting up a legal entity in Vietnam can take three to six months and requires navigating complex labor regulations, mandatory social insurance contributions, and evolving tax obligations. For companies looking to hire five, ten, or fifty engineers in Ho Chi Minh City within weeks, that timeline is untenable.
Demand for EOR Services Surges Across Southeast Asia
Employer of record providers, firms that serve as the legal employer on behalf of a foreign company and handle payroll, contracts, tax filings, and statutory benefits, have seen a sharp rise in demand. Aniday's employer of record service in Vietnam reported that inquiries from international technology firms increased 58% in the second half of 2025, with the majority coming from companies based in the United States, Japan, and Western Europe seeking to hire software engineers and AI specialists.
The trend is part of a broader reconfiguration of how global companies access talent in Southeast Asia. Vietnam's Ministry of Information and Communications estimates the country's IT workforce reached 1.5 million in 2025, yet roughly 150,000 technology positions remain unfilled, a gap that is drawing foreign employers into direct competition with domestic firms for experienced developers.
"The conversation has shifted from whether to hire in Vietnam to how fast companies can do it compliantly," said Toan Nguyen, a human resources services specialist with over a decade of experience advising international firms on workforce expansion across Asia. "Employer of record has gone from a niche solution to a standard market entry strategy for companies that cannot afford to wait six months for entity setup."
Global Players Expand Operations in Vietnam
LinkedIn's Economic Graph research identified Vietnam and the Philippines as two of the fastest-growing markets for cross-border technology hiring last year. Samsung, Intel, and Grab have all expanded engineering operations in the country over the past 18 months, though these larger firms typically establish their own legal entities rather than using employer of record arrangements.
For mid-sized companies, the calculus is different. Establishing a foreign-owned enterprise in Vietnam requires a minimum capital contribution, a registered office, and compliance with the country's Labor Code, which mandates 13th-month salary payments, social insurance contributions of up to 21.5% of gross salary from the employer, and specific termination procedures that differ significantly from those in the United States or the European Union.
Employer of record services absorb that complexity. The foreign company directs the employee's work while the EOR provider manages the legal and administrative obligations. Workers receive compliant contracts, statutory health insurance, and local benefits. The hiring company, in turn, avoids the cost and delay of entity establishment.
Regulatory Questions Remain Unanswered
The model is not without scrutiny. Vietnam's Ministry of Labor, Invalids, and Social Affairs has signaled interest in clarifying the regulatory framework around employer of record arrangements, particularly regarding the distinction between labor leasing, which requires a specific license in Vietnam, and EOR services, which operate in a less clearly defined legal space.
"Labor leasing under Vietnamese law is tightly regulated and capped at 12 months," said Tran Minh Duc, a partner at a Hanoi-based law firm specializing in foreign investment. "Employer of record is a different structure, but the regulatory lines are not yet fully drawn. Companies need to ensure their arrangements are defensible."
What Comes Next for Vietnam's EOR Market
Despite the legal ambiguity, demand continues to grow. The Asian Development Bank projects that Southeast Asia will need an additional 675,000 technology workers by 2028, and Vietnam is positioned to absorb a significant share of that demand. For foreign companies unwilling to wait months for entity registration, employer of record services have become the fastest path into the market.
Industry observers expect the sector to consolidate over the next two years, as larger global payroll and workforce companies acquire regional EOR providers to strengthen their Southeast Asia coverage. Whether Vietnam's regulatory framework evolves to formalize and support the model or tighten restrictions around it may determine how quickly that consolidation unfolds.
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