Third-party employment Vietnam Without a Legal Entity

Recruiting in Vietnam without a legal entity is a difficult problem that many international businesses face when they want to take their first steps into this potential market. Vietnam, with its remarkable growth rate, is an indispensable destination. However, building a market research team and establishing partnerships often falls into a dilemma, like the “chicken and egg” story: how can you recruit people through third-party employment Vietnam without establishing an official legal entity?

This poses a series of complex legal barriers. According to Vietnam’s Labor Law, a business must have legal status in Vietnam to sign labor contracts, register for social insurance, and fulfill tax obligations for employees. If the company deliberately circumvents the law by signing service contracts with individuals, it may face serious legal risks for both the business and the employee.

So what is the solution to this difficulty in a legal, quick and effective way? Fortunately, there are professional recruitment process outsourcing Vietnam services that have been established to help businesses solve this problem, opening the door to enter the Vietnamese market firmly and safely.

1. Understand the Risks of “Underground” Recruitment

Before going into the solution, it is important to be aware of the risks when a foreign company arbitrarily recruits personnel in Vietnam without a legal entity:

  • Violation of Labor Law: Enterprises cannot sign legal labor contracts. If the relationship is determined to be “disguised” labor, the company may face heavy fines.
  • Tax Risk: Both the company and the employee may be subject to personal income tax, corporate income tax and late payment penalties.
  • Non-compliance with Social Insurance: Failure to pay mandatory insurance (social, health, unemployment) is a violation of the law, depriving employees of their legitimate rights and subject to high interest rates.
  • Lack of engagement and stability: Employees working in an informal environment often feel insecure, unmotivated and have a high tendency to quit, wasting recruitment efforts.
  • Professional Solutions: EOR and Staffing Agency

To thoroughly solve the above problems, the two main solutions trusted by international businesses are Employer of Record (EOR) and Staffing Agency (Labor Subleasing Service).


Employing Easily Without a Legal Entity in Vietnam in 2025

2. Employer of Record (EOR) – Comprehensive Responsibility Delegation Solution

EOR (tentatively translated: Employer Responsibility Delegation Unit) is a third party with full legal status in Vietnam. They will perform all the legal responsibilities of an employer on behalf of your company. This is a strategic solution for businesses that want to build a long-term team.

How it works:

  • You choose the staff: Your company still has full authority to search, interview and select the most suitable candidate.
  • EOR signs the contract: The EOR unit will sign an official labor contract with the employee you have selected. Legally, that employee is an employee of EOR.
  • You manage the work: Although EOR manages the administrative side, you are still the person who directly assigns work, manages performance and runs the daily activities of the employee.
  • EOR handles all procedures: Workforce management Vietnam will be responsible for calculating and paying salaries, bonuses, paying social insurance, settling personal income tax and handling all issues related to labor law compliance.

Outstanding benefits of Outsourced HR solutions Vietnam:

  • Fast market penetration: You can have employees working legally in Vietnam in just a few days instead of spending months to establish a company.
  • 100% compliance with the law: Completely eliminate legal risks because all procedures are handled by a professional unit that understands local laws.
  • Optimize costs: Save a huge amount of money compared to having to establish and maintain a representative office or subsidiary.
  • Increase employee engagement: Employees who have signed official contracts with full benefits will feel more secure and committed, suitable for building a core team.

2. Staffing Agency

Staffing agency Vietnam, also known as labor leasing service, is a flexible solution where a service company (lessor) with a license to lease labor will sign a contract with the staff and then “lease” the labor of that employee to your company (lessee).

Expanding to Vietnam: How to Hire Employees without an Entity – EOR Asia

How it works:

  • Determine the need: You give the contract staffing services Vietnam company the requirements on the number, skills and time needed.
  • Staffing Agency provides the staff: The staffing company will search their database or recruit new staff to provide you with the personnel that match your requirements.
  • Sign a service contract: You will sign a service contract with the staffing company, which clearly stipulates the cost, time and terms of service.
  • Work and administration management: Similar to an EOR, you will manage the day-to-day work of your employees, while the staffing company takes full responsibility for the employment contracts, salaries, and legal procedures with the employees.

3. Recruitment Agency (Headhunt) – When You Only Need to Find Candidates

Besides EOR and Staffing, many international businesses also choose to cooperate with Recruitment Agencies (also known as Headhunt). These are professional units in searching, screening and introducing potential candidates according to the requirements of the business.

When is it appropriate? If you only need support in finding candidates, you do not need to sign a labor contract immediately.

  • The difference: Recruitment Agency only stops at recruitment, cannot sign contracts, pay salaries or handle insurance on behalf of the business.
  • Practical application: Often combined with EOR or Staffing to complete the process: Recruitment Agency helps you find the right person, then Temporary employment Vietnam/Staffing ensures that person works legally.

With S4B Vietnam, international businesses can find all human resources solutions in one place: from Headhunt to Staffing/Payroll Outsourcing. Thanks to that, international businesses can both legalize their staff and quickly access a source of quality candidates.

Entering a new market is always challenging, but legal barriers to human resources should not be a factor hindering your progress. By understanding and taking advantage of professional solutions such as EOR and Staffing, international businesses can completely solve the recruitment problem when they do not have a legal entity. This is a strategic and wise move, helping you save time, minimize risks and focus completely on the most important goal: developing your business and conquering the Vietnamese market.

>>>Employer of record Vietnam – Professional employer organization Vietnam 2025

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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