Employer of record for tech companies in Vietnam
In recent years, Vietnam has become an attractive destination for international technology companies due to its potential market, high-quality human resources and increasingly open business environment.
However, expanding operations in Vietnam is not always easy, especially when faced with complicated legal regulations and administrative procedures. Therefore, many businesses have chosen EOR for SMEs
to recruit personnel and operate their businesses without having to establish a legal entity in Vietnam.
Have you ever wondered why EOR for enterprise has become the top choice of technology companies when entering the Vietnamese market? Let’s find the answer through the following article by S4B Vietnam!
1- Challenges for technology companies when expanding into Vietnam
Technology companies expanding into the Vietnamese market is not simple. They face various challenges in terms of law, administrative procedures and many other issues.
Here are the most common challenges:
1.1- Legal barriers
Vietnam has a relatively strict labor and business law system to protect workers’ rights and ensure transparency in business operations. However, these regulations create many difficulties for foreign technology companies when they want to expand their operations.
Technology businesses will have to strictly comply with labor laws, register for operating licenses and ensure legal tax obligations. If they do not understand these regulations, businesses may face the risk of violating the law, leading to fines or difficulties in operations.
Employer of Record Services: Optimal Workforce Expansion
1.2- High operating costs
Setting up an office in Vietnam requires foreign technology companies to invest in infrastructure, calculate rental costs, recruit staff and comply with labor regulations.
In addition, operating costs also include other expenses such as corporate taxes, social insurance fees for employees and other administrative costs. All of these costs can become a significant financial burden for a technology company that is new to the Vietnamese market.
1.3- Recruiting the right staff
Technology companies often look for highly skilled staff in the fields of software, data and artificial intelligence. However, businesses face many difficulties in recruiting suitable staff in Vietnam for the following reasons:
- Fierce competition between large companies and startups in the technology industry.
- Requirements for skills and experience are not easy to meet.
- Differences in working culture between foreign companies and local staff. Without a clear recruitment strategy, businesses can take a long time to build a team that meets their development needs.
1.4- Complicated administrative procedures
Complicated administrative procedures are one of the biggest challenges for technology businesses when expanding into the Vietnamese market.
In reality, they will have to face many problems such as registering legal entities, applying for work permits for foreign employees to implement social welfare regimes.
The above problems all require businesses to invest a lot of time and resources to ensure compliance with regulations. Therefore, not having a legal team and specialized personnel can make it difficult for businesses to manage these procedures.
2- How does EOR help technology companies minimize risks and expand rapidly?
Faced with difficulties and challenges when entering the Vietnamese market, technology companies have chosen employer of record for tech companies as an important solution to ensure legal compliance as well as stabilize the business development process.
Below are some examples of how EOR service for SaaS has supported technology businesses:
2.1- Reduce legal burden
Expanding operations in Vietnam comes with many complicated legal procedures related to labor law, corporate tax and personnel contracts. However, by using EOR services, businesses will not have to directly handle these issues.
Because the EOR service provider will take on all legal responsibilities, businesses can quickly recruit personnel, operate their business effectively and ensure full compliance with Vietnamese law.
Employer of record for tech companies in Vietnam
>>>Read more: DIFFERENT APPROACHES TO HUMAN RESOURCES SERVICES FOR VIETNAMESE AND FOREIGN ENTERPRISES
2.2- Saving operating costs
To operate in Vietnam, foreign technology companies need to establish their own legal entities, open representative offices and invest in infrastructure. This comes with many fixed costs, social insurance, corporate income tax and human resource management.
Choosing EOR services helps companies significantly reduce these costs, optimize their budgets while still being able to operate in the Vietnamese market.
2.3- Flexible recruitment
The technology industry requires a high level of flexibility in recruitment, especially when businesses need to expand rapidly or test the market. With EOR services, businesses do not need to set up a complex human resource management system but can still recruit talent in Vietnam.
In addition, because EOR for startups units can support the entire process from searching for candidates, signing labor contracts to ensuring compliance with working regimes, businesses will have the opportunity to access high-quality human resources without encountering legal barriers.
2.4- Support effective human resource management
In addition to undertaking the recruitment process, employer of record for tech companies also helps businesses fulfill their obligations to employees such as social insurance, personal income tax, welfare regimes and other labor requirements. Thanks to that, businesses can focus on core business activities.
To overcome legal barriers and effectively manage human resources, EOR has become an optimal solution, helping foreign technology enterprises quickly enter the Vietnamese market without having to establish a separate legal entity.
In addition, freelancer employer of record also helps technology companies minimize legal risks, optimize operating costs, recruit flexible staff and ensure compliance with local regulations. This helps them develop sustainably and create favorable conditions for accessing technology talent in Vietnam.
Hopefully, the above sharing of S4B Vietnam has helped readers understand why technology companies choose employer of record for NGOs when entering the Vietnamese market. Moreover, applying this service strategically also helps them quickly adapt and develop strongly.
S4B Vietnam
- Address: Unit 701B – 701C, Tower A, Handi Resco Towers, 521 Kim Ma Street, Giang Vo Ward, Hanoi, Vietnam
- Tel: +84 24 3974 4181
- Email: service@s4b.com.vn
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