Business culture in Vietnam
Business culture in Vietnam
Business culture in Vietnam is characterized by relationship-building, respect for hierarchy, and indirect communication that shape workplace interactions. Unlike Western business cultures that often value directness and quick results, Vietnamese business relationships develop slowly and require patience. Understanding these cultural elements helps international managers build trust and avoid misunderstandings with Vietnamese colleagues.
Communication
In Vietnam, business communication tends to be indirect with an emphasis on harmony and saving face. Vietnamese professionals often avoid saying "no" directly and may use phrases like "we will try" or "it might be difficult" instead of outright refusal. Non-verbal cues such as slight nods or smiles may signal disagreement, so pay attention to body language.
Hierarchy
Workplace hierarchy in Vietnam typically follows a top-down structure which influences decision-making and reporting relationships. Senior leaders make most decisions, and employees show great respect to those in authority. Age and experience are highly valued, so younger managers may need to work harder to establish credibility.
Relationships
Professional relationships in Vietnam are built through shared meals, social gatherings, and patient relationship development. Business partners often spend time getting to know each other before discussing business matters. Trust is essential and often comes before contracts or formal agreements.
Practical applications
When working with colleagues in Vietnam, international managers should invest time in relationship-building to establish trust. Schedule informal meals or coffee meetings before jumping into business discussions. Allow extra time for decisions, as Vietnamese teams may need to consult with senior leaders before committing. Show respect by addressing people using their title and last name until invited to use first names. These adaptations will help you develop productive and respectful working relationships with your Vietnamese colleagues.
Market insights for Vietnam
Vietnam employment market overview
The Vietnam employment market is characterized by rapid growth, digital transformation, and evolving skill demands that shape hiring opportunities and challenges. Vietnam's job market is growing in technology, manufacturing, and renewable energy sectors, with a 2.3% unemployment rate. Companies are expanding recruitment efforts, with 57% planning to hire new employees in Q2/2025.
Talent availability
Skilled professionals in Vietnam are abundant in manufacturing and sales but limited in specialized tech roles with only 400,000 IT workers against growing demand. The talent gap is most pronounced in emerging fields like AI, cybersecurity, and sustainable development.
Key industries
Vietnam's strongest employment sectors include technology, manufacturing, renewable energy, and retail which offer opportunities for international companies. Industrial hubs like Bac Giang, Hai Phong, and Binh Duong are seeing large-scale recruitment due to factory relocations by global companies.
Hiring seasons
The post-Tet period represents Vietnam's peak hiring season with over 50% of workers seeking new opportunities. Companies typically increase recruitment budgets during this time to address workforce shortages and compete for available talent.
Hiring implications
Companies hiring in Vietnam should partner with local recruitment agencies to access skilled professionals faster in competitive sectors. Businesses should also develop comprehensive training programs to address skill gaps while enhancing retention rates among current employees.
Companies hiring in Vietnam should offer competitive compensation packages with 5-6% salary increases and enhanced bonuses to attract and retain talent in a market where job mobility is high.
EOR benefits in Vietnam
What are the benefits of using an EOR in Vietnam?
The key benefits of using an Employer of Record (EOR) in Vietnam include quick market entry, simplified compliance, cost reduction, access to local expertise, and risk mitigation.
Here are the 5 benefits of using an EOR in Vietnam:
Quick market entry. An EOR lets you hire workers in Vietnam in just days or weeks. You don't need to set up your own company there, which can take months. This means you can start doing business in Vietnam much faster and test if the market works for your business.
Simplified compliance. Vietnam's labor laws are tricky and change often. An EOR handles all the complex rules about hiring, paying, and benefits for your workers. They make sure everything follows Vietnamese laws about contracts, taxes, and social security, so you don't get in trouble or face fines.
Cost reduction. Setting up your own company in Vietnam costs a lot of money for office space, legal fees, and staff. With an EOR, you only pay for the services you use. This saves you money, especially when you're just starting out or only need a few employees in Vietnam.
Local expertise access. EORs know how business works in Vietnam. They understand the culture and can help you avoid common mistakes. They also know how to find good local workers, especially in tech and manufacturing where Vietnam has many skilled people.
Risk mitigation. The EOR becomes the legal employer in Vietnam, not you. This means they handle any problems with work permits, employee disputes, or termination rules. If something goes wrong, the EOR deals with it, protecting your business from legal issues and keeping your reputation safe.
Unique compliance considerations in Vietnam
Key compliance challenges
What are the compliance challenges when hiring in Vietnam?
The key compliance challenges when hiring in Vietnam include complex labor regulations, strict contract requirements, detailed termination procedures, mandatory benefits and insurance, and data protection compliance.
Here are the 5 compliance challenges companies face when hiring in Vietnam:
Labor law compliance. Vietnam's Labor Code is detailed and frequently updated. Companies must follow specific rules for working hours (maximum 8 hours per day, 48 hours per week), overtime limits, and mandatory rest periods. Non-compliance can result in fines and legal disputes with employees.
Employment contracts. Written contracts are mandatory in Vietnam and must be in Vietnamese. Contracts need specific terms like job description, work location, salary, and working hours. Companies must register employment contracts with local labor authorities within 30 days of signing.
Termination procedures. Ending employment in Vietnam requires following strict rules. Employers must provide proper notice periods (30-45 days depending on contract type) and valid legal grounds for termination. Improper termination can lead to reinstatement orders and compensation payments of up to 2 months' salary.
Mandatory benefits and insurance. Employers must contribute to social insurance (17.5%), health insurance (3%), and unemployment insurance (1%) for Vietnamese employees. Additional benefits include 13th month bonuses and paid leave (minimum 12 days annually). These costs must be factored into total employment expenses.
Data protection. Vietnam is updating its data protection laws with stricter rules for handling employee information. Companies must obtain consent before collecting personal data and implement security measures to protect employee information. Cross-border transfers of employee data require additional compliance steps.
An Employer of Record (EOR) can handle these compliance challenges, taking on the legal responsibility and ensuring your hiring practices adhere to Vietnam's regulations.
Employment basics
Essential employment information and regulations for hiring in Vietnam.
Working hours
Employment protection
Compensation Standards
Minimum Wage
1500 USD
Currency
USD
Pay Frequency
monthly
Benefits & leave
Comprehensive overview of employee benefits and leave policies in Vietnam.
Leave Policies
Annual Leave
Days per year: 20
Payment: 100%
Notice period: 2 weeks
Ref: Employment Act Section 15
Sick Leave
Days per year: 14
Payment: 100%
Ref: Employment Act Section 16
Maternity Leave
Days per year: 98
Payment: 100%
Flexible return-to-work arrangements available Protection from dismissal during pregnancy Right to return to same or similar position
Ref: Employment Act Section 17
Paternity Leave
Days per year: 14
Payment: 100%
Can be taken in two separate weeks Multiple births do not increase leave duration
Ref: Employment Act Section 18
Employee Benefits
Employee benefits
Vietnam provides a comprehensive benefits package for employees that includes both mandatory and optional benefits. These benefits are designed to ensure employee welfare and comply with local regulations.
Mandatory Benefits
Non-Mandatory Benefits
Public Holidays
Vietnam observes 6 public holidays throughout the year. Most holidays are paid at 100% of regular salary.
| Date | Holiday | Status |
|---|---|---|
| January 1 | New Year's Day | Mandatory |
| January 29 | Lunar New Year | Mandatory |
| April 7 | Hung Kings Commemoration Day | Mandatory |
| April 30 | Reunification Day (Victory Day) | Mandatory |
| May 1 | Labor Day | Mandatory |
| September 2 | Independence Day | Mandatory |
Taxes & payroll
Comprehensive tax structure and payroll requirements for employers and employees in Vietnam.
Tax Structure Overview
Important Tax Information
When using an EOR in Vietnam, your EOR provider will handle all tax calculations, withholdings, and submissions to local authorities. This ensures full compliance with local tax laws.
Tax overview
Key tax considerations when employing in Vietnam:
| Tax type | Paid by | Rate | Notes |
|---|---|---|---|
| {"name":"Personal Income Tax","type":"income Tax","paid By":"employee","period":"annual","notes":"Progressive tax system with three brackets"} | employee | Varies | Standard {"name":"personal income tax","type":"income tax","paid by":"employee","period":"annual","notes":"progressive tax system with three brackets"} rates apply in Vietnam. |
| {"name":"Social Security Contributions","type":"social Security","paid By":"shared","employer Contribution":12.5,"employee Contribution":7.5,"period":"annual","notes":"Calculation base: Gross salary up to maximum threshold"} | employee | Varies | Standard {"name":"social security contributions","type":"social security","paid by":"shared","employer contribution":12.5,"employee contribution":7.5,"period":"annual","notes":"calculation base: gross salary up to maximum threshold"} rates apply in Vietnam. |
| {"name":"Healthcare Levy","type":"healthcare","paid By":"shared","employer Contribution":1,"employee Contribution":1,"period":"annual","notes":""} | employee | Varies | Standard {"name":"healthcare levy","type":"healthcare","paid by":"shared","employer contribution":1,"employee contribution":1,"period":"annual","notes":""} rates apply in Vietnam. |
Payroll Requirements
Payment Details
Pay Frequency: monthly
Currency: USD
Minimum Wage: 1500 USD
13th Month Bonus: Required