Two ways to put human resources into operation in Vietnam
When expanding operations to Vietnam, foreign businesses often have two options: (1) hire personnel in Vietnam through EOR (Employer of Record) services like Nhân Kiệt, or (2) send personnel from the parent company abroad to work directly in Vietnam. These two directions are completely different in terms of cost, implementation time and level of legal risk.
Cost problem when hiring personnel in Vietnam via EOR
When hiring personnel in Vietnam through EOR, businesses only pay a fixed service fee per person/month, including salary, social insurance - health insurance - unemployment insurance, personal income tax and labor contract administration. No need to establish a legal entity, no need to open a corporate bank account in Vietnam, no need for a separate human resources - accounting department. Implementation time is usually only 1-2 weeks from closing candidates.
Costs when sending personnel from the parent company to Vietnam
On the contrary, when sending personnel from the parent company, businesses have to bear a series of hidden costs: air tickets, housing, living allowances (especially when hiring personnel in Ho Chi Minh - where housing and living costs are among the highest in the country), international health insurance, applying for work permits and temporary residence cards for foreigners. There is also a risk if personnel cannot adapt to the market and have to be replaced midway.
Legal risks if there is no legal entity in Vietnam
One point businesses often miss: if they have not yet established a legal entity in Vietnam but still let their personnel (including those sent by the parent company) sign labor contracts or operate regularly here, the business may face risks of unclear tax and labor obligations. This is the reason why the EOR model was born - allowing businesses to legally hire personnel in Vietnam without having to set up a company, because Nhân Kiệt signs the labor contract in their name and is responsible for complying with the law.
When should you choose EOR, when should you send someone directly?
- If the goal is to test the market, the scale is less than 20 people, or need to deploy quickly in a few weeks: EOR is the optimal choice in terms of cost and speed.
- If the business has a long-term investment plan and needs a senior management position to fully represent the parent company: it is possible to combine sending 1-2 key personnel, while the rest still hire personnel in Vietnam through EOR to optimize operating costs.
Is EOR applicable to senior management positions? Yes. Nhân Kiệt has supported both branch director and chief representative positions through the EOR model, as long as that position does not require a legal name as the legal representative of a legal entity in Vietnam.
Is the cost of hiring personnel in Vietnam through EOR higher than recruiting yourself? EOR service fees usually only account for a small percentage of total personnel costs, while helping businesses save significantly compared to hidden costs when sending people from abroad or operating their own human resources - accounting apparatus.