Two Major Compliance Pitfalls to Avoid

U.S. companies often make two costly mistakes when hiring in Vietnam:

• Misclassifying Employees as “Contractors”: This is the most common pitfall. If you treat a worker like an employee (e.g., set their hours, direct their work, provide tools), they are an employee under Vietnamese law, regardless of what your contract says. Misclassification can lead to significant fines, back taxes, and liability for unpaid benefits.
• Permanent Establishment Risk: If your remote worker’s activities generate revenue for your U.S. company in Vietnam, you could inadvertently create a “Permanent Establishment” (PE). This can subject your company to Vietnamese corporate income tax.

The Smartest, Safest Way to Hire: Employer of Record (EOR)

So, how do you hire in Vietnam without these risks? The answer is an Employer of Record (EOR) service. An EOR acts as the legal employer in Vietnam on your behalf. Here’s how it works:

• You find the talent, and we hire them onto our local, compliant entity.
• We handle all contracts, payroll, taxes, and benefits according to Vietnamese law.
• You manage their day-to-day work, while we manage the HR and legal compliance.

This model eliminates your misclassification and PE risk, allowing you to hire full-time employees safely and legally.

Final Thoughts: Global Hiring Is a Strategy, Not a Shortcut

Don't let legal complexities deter you from accessing Vietnam’s incredible talent pool. Hiring remote workers is a strategic advantage when done correctly. Using a trusted EOR partner like VietAssist is the simplest way to ensure you stay compliant, avoid risks, and focus on what matters most: building a world-class team.