The rise in remote work & tougher visa regulations is creating a massive opportunity for businesses to hire remote contractors in emerging economies to meet their talent needs. With 52 million people are in working age, Vietnam boasts a rapidly growing workforce known for its strong work ethic and technical prowess. Its diverse beauty and low cost of living also make it an attractive location for remote working professionals and digital nomads.
A significant number of independent contractors in Vietnam can also speak English, making communication and collaboration with clients as smooth as possible.
If you’ve decided to hire independent contractors in Vietnam, you have to be aware of the unique challenges of hiring and paying contractors in the country. You have to understand local labor and tax laws and how they apply differently to independent contractors and employees. Finally, you have to set up a reliable payroll system to pay your contractors quickly and securely.
Read More: Incorp Vietnam’s Employer of Record Services
Why businesses are hiring in Vietnam
Vietnam offers the right mix of affordability, access, and talent, making it and ideal hub to hire contractors in Vietnam. Key advantages include:
- Lower labor costs than Thailand and the Philippines
- Central ASEAN location enables smooth access to regional markets
- Rising tech talent pool in IT, engineering, and business services
- Government-backed innovation push to lead in digital transformation by 2030
- Ideal for scaling teams in manufacturing, services, and technology sectors
In-demand contractor roles in Vietnam
Businesses commonly hire contractors in Vietnam in these high-demand sectors:
1. IT and Software Development:
- Examples: Software engineers, web developers, and mobile app developers.
- Qualities: Skilled in modern technologies like Python, JavaScript, and React.
2. Creative Roles:
- Examples: Graphic designers, video editors, and animators.
- Qualities: Procient in Adobe Creative Suite, Figma, and Canva.
3. Digital Marketing:
- Examples: SEO specialists, social media marketers, and PPC experts.
- Qualities: Knowledgeable in Google Analytics, SEMrush, and marketing automation tools.
4. Customer Support:
- Examples: Virtual assistants and technical support agents.
- Qualities: Effective communication and problem-solving skills.
5. Finance and Accounting:
- Examples: Bookkeepers, financial analysts, and accountants
- Qualities: Experienced with tools like QuickBooks and Xero.
Vietnam independent contractors vs. full-time employees
One of the key challenges when hiring independent contractors in Vietnam is understanding how Vietnamese law differentiates between a contractor and an employee.
Under the current Vietnamese Labor Code, an employee is defined as an individual who:
- Works under a contractual agreement (labor contract) with the employer
- Operates under the employer’s supervision or direct control
- Receives a regular salary from the employer
If all three conditions apply, the individual is legally classified as an employee. Conversely, if these conditions do not apply, the individual is considered an independent contractor (or freelancer), who is not bound by a formal labor contract and has greater autonomy in managing their work.
Differences between an employee and an independent contractor in Vietnam, include:
- Statutory Rights: Employees are entitled to statutory employment protections under Vietnamese law, while independent contractors are not.
- Contracts: Employment contracts are mandatory for employees but not required for independent contractors.
- Tax Obligations: Independent contractors must handle their own tax registration, filings, and payments. Employers do not file taxes on behalf of contractors.
Proper worker classification is critical. Misclassifying an employee as a contractor can expose your company to significant legal risks, including penalties, fines, and potential back payments for all statutory benefits the employee should have received since their start date.
Before hiring contractors in Vietnam: Understand compliance, costs, and other concerns
When you hire contractors in Vietnam, they are governed by the Civil Code of 2015 instead of the Labor Code. This means independent contractors are not classified as employees and are not eligible for statutory benefits as provided under Vietnamese labor law.
However, it is essential to understand the Labor Code if you plan to clearly distinguish between independent contractors and employees or consider transitioning contractors to full-time employees in the future.
Rights and Benefits
Under local labor regulations, employees are limited to 48 working hours per week, with a maximum of 8 hours per day. Any work beyond these limits qualifies for overtime compensation.
Employees can work up to 12 hours per day, including both standard and overtime hours.
Employees who work overtime receive:
- 150% of the hourly rate on weekdays
- 200% of the hourly rate on weekly days off
- 300% of the hourly rate on public holidays
All employees who work at night are provided with an additional amount for their work.
- Overtime during regular daytime hours: Overtime pay = Regular hourly rate x 210%
- Overtime during the night shift on weekly rest days: Overtime pay = Regular hourly rate x 270%
Employees working night shifts (between 10:00 PM and 6:00 AM) receive a 30% premium on their hourly wage in addition to applicable overtime rates. Employers must also ensure a minimum rest period of 12 consecutive hours following a night shift, unless otherwise agreed. For night shifts exceeding 8 hours, employers may need to provide additional rest periods or shortened subsequent shifts to meet occupational health and safety requirements.
Employers are also required to contribute 23.5% of the employee’s salary to social insurance, while employees must contribute 10.5%.
The maximum monthly salary subject to social insurance, health insurance, and trade union contributions is VND 46,800,000. Additionally, the minimum wage rate in Vietnam isn’t the same in every region.
For example, in an area like Ho Chi Minh, the minimum wage rate is 4,960,000 VND per month. Similarly, in the region with the provinces of Bac Giang, Bac Ninh, Hai Duong, and Vinh Phuc, the minimum wage rate is 3,860,000 VND per month.
Another regulation of the labor law for employees is that they are all entitled to a paid annual leave after working for 12 straight months. Independent contractors are not entitled to any of these benefits. Providing these benefits to a contractor may result in misclassification risks.
Read More: How Vietnam Labor Costs Attracts Foreign Companies?
Taxes
Vietnam applies a progressive personal income tax ranging from 5% to 35%, based on the employee’s salary. Employers are responsible for withholding personal income tax (PIT) and filing tax returns on behalf of employees.
In contrast, independent contractors must register directly with the tax authorities, file their own taxes, and handle all related reporting. Employers are not responsible for filing taxes for independent contractors.
How to pay independent contractors in Vietnam:
Although you are not required to provide statutory benefits when hiring independent contractors in Vietnam, you must still ensure payment compliance. InCorp Vietnam can support you by managing timely and accurate disbursements.
If you choose to pay contractors directly, you must:
- Gather all necessary documentation to comply with Foreign Contractor Withholding Tax (FCT) regulations.
- Keep detailed records of all payments, invoices, and tax-related documents.
For businesses hiring contractors in Vietnam, here are payment options, each with its own advantages and limitations:
| Method | Advantages | Disadvantages |
| Direct Bank Transfer | Standard method and simple setup | Currency conversion charges |
| International Wire Transfer | Large payments and infrequent transfers | High fees, long processing times |
| Digital Payment Platforms like Paypal, Wise | Convenient and fast | High per-transaction fees |
| Third-party payroll Services like InCorp Vietnam | Total compliance and reduced workload | May incur platform use fees |
How EOR Services Help You Hire Contractors in Vietnam Safely
A recruitment and Employer of Record (EOR) agency as InCorp Vietnam eliminates liability for businesses hiring independent contractors in Vietnam by acting as the official employer, managing payroll taxes, legal contracts, and compliance with local labor laws, such as the Civil Code of 2015 for contractors and the Labor Code for employees. By handling tax obligations, including Foreign Contractor Tax (FCT) withholding (up to 20% for foreign contractors), drafting compliant service agreements, and maintaining accurate records, they reduces the risk of misclassification, penalties, and audits. This allows businesses to hire skilled talent without establishing a local entity, streamlining operations and ensuring adherence to Vietnam’s employment regulations while minimizing legal and financial risks.
Leading contractor recruitment agencies in Vietnam
To hire contractors in Vietnam, businesses can partner with leading recruitment agencies that ensure compliance with local laws, such as the Civil Code of 2015, and streamline talent acquisition and payroll management. These agencies excel in sourcing skilled professionals in IT, digital marketing, finance, and more, enabling efficient hiring without a local entity.
- InCorp Vietnam: Stands out as a leading agency to hire contractors in Vietnam, offering expertise in sourcing top talent, ensuring compliance with Foreign Contractor Tax (FCT), and providing end-to-end recruitment and payroll solutions.
- Navigos Search: Sources contractors in IT and finance with a vast database.
- JAC Recruitment Vietnam: Focuses on talent for technology and hospitality.
- Robert Walters Vietnam: Provides contractors across diverse sectors.
- Adecco Vietnam: Offers recruitment services for manufacturing and IT.
- ManpowerGroup Vietnam: Supports contractor hiring in technology and logistics.
How InCorp Can Assist?
In 2025, navigating Vietnam’s competitive talent landscape requires more than just job postings as it demands a strategic approach to recruitment. InCorp Vietnam supports businesses by offering end-to-end recruitment solutions tailored to local market dynamics. From executive search to contract staffing and contingency hiring, we help companies identify, attract, and retain the right talent across industries. Our in-depth understanding of regulatory compliance, salary benchmarking, and cultural nuances enables us to streamline hiring processes, reduce time-to-fill, and ensure workforce alignment with long-term business goals. Whether you’re scaling a startup or expanding an established enterprise, InCorp is your trusted HR partner in Vietnam.
Learn the Right Setup for Business
Expansion in the Vietnam
FAQs
What defines an independent contractor in Vietnam?
- Independent contractors, governed by the Civil Code of 2015, work independently without employer supervision, are not bound by labor contracts, and manage their own tax filings, unlike employees who receive benefits under the Labor Code.
What industries are best suited for hiring contractors in Vietnam?
- Vietnam’s talent pool excels in IT (e.g., software development), digital marketing, creative roles (e.g., graphic design), finance, and customer support, with contractors skilled in tools like Python, Figma, and Google Analytics.
How much do independent contractors make in Vietnam?
- It depends on their skills, experience, and project budget. Experienced contractors make more than the junior ones.
Do businesses need a local entity to hire contractors in Vietnam?
- No, businesses can hire contractors without a local entity by using an Employer of Record (EOR) like InCorp Vietnam, which handles contracts, payroll, and compliance.
