Vietnam Expansion Spotlight: Market Entry & Salary Benchmarks

Why Vietnam Is a Fast-Rising Expansion Destination

Expanding into Vietnam presents compelling opportunities—but also key challenges. With attractive growth, a young workforce, and ASEAN proximity, Vietnam is becoming a strategic hub for regional operations. Yet regulatory complexity, payroll compliance, and efficient talent acquisition often hold back companies. This guide—aligned with AYP Group’s expertise—unpacks:

• 📈 Vietnam’s economic growth and expansion potential
• 💰 Salary benchmarks, minimum wage, and payroll considerations
• 🧭 Step‑by‑step setup via entity or Employer of Record (EOR)
• ⚖️ Labour law compliance and risk mitigation
• 🚀 Entry‑mode decision framework and timelines

By the end, HR, sales and operations leaders will have a confident roadmap for hiring in Vietnam using compliant, cost-effective strategies.

Vietnam’s Economic Growth & Market Opportunity

Vietnam’s Growth Trajectory

Vietnam’s GDP growth rate has averaged 6–7% annually over the past decade, with the World Bank projecting 6.5% growth in 2025—far outpacing many developed economies. Economic diversification across manufacturing, tech, and services continues to drive new demand for talent in B2B sectors, supply chain support, and software-enabled services.

Emerging Business Opportunities

• Manufacturing & supply chain: With rising labour costs in China, Vietnam is gaining traction as a preferred manufacturing switchboard in Southeast Asia. 
• Digital services & IT: A young, digitally literate population (median age ~32) fosters local tech talent and growing software development hubs in cities like Ho Chi Minh and Da Nang. 
• Consumer B2B market: Rapid domestic growth opens regional sales channels for tech, finance, and logistics providers aiming to tap into Vietnam’s urbanizing economy. 

Key takeaway: Vietnam’s accelerating growth and competitiveness mean fast-moving, high-impact expansion possibilities.

Salary Benchmarks & Labour Cost Framework

Average Salary & Income

Vietnam’s average income was around US$1,730 in 2024, with urban regions typically yielding 15–30% higher compensation (WorldData).

Minimum Wage

The national minimum wage in Vietnam ranges from ₫4.5 million to ₫7.0 million per month (~US$185–288), varying by region. Ho Chi Minh and Hanoi fall into the highest tier (Vietnam Government Decree 38/2022/NĐ-CP).

Total Cost Considerations

Beyond base salary, employers are responsible for mandatory contributions:

• Social insurance: ~17.5% (employer portion)
• Health insurance: ~3%
• Unemployment insurance: ~1%

Additional expenses include paid leave, onboarding, and local recruitment fees. A comprehensive payroll and cost model—through our Vietnam Employer of Record service—enables realistic budgeting, full compliance, and operational visibility.

Company Setup vs. EOR: Choosing Your Entry Mode

Direct Entity Formation

Pros:

• Full operational and brand control
• Suited for long-term market investment

Cons:

• Legal registration and tax filing complexity
• Requires charter capital and Vietnamese legal presence
• Setup timeline: 3–6 months 

Employer of Record (EOR) Approach

Pros:

• Fast hiring: onboard employees in 1 day 
• No entity setup required
• Compliance with Vietnam labour law, payroll, and statutory benefits
• Streamlined HR administration through AYP’s platform

Cons:

• Legal employer is the EOR (not direct entity)
• Service fees apply

For companies focused on speed to market, EOR enables compliant onboarding within 24 hours, helping your team hit expansion milestones faster and without legal risk.

Navigating Vietnam Labour Law

Employment Contracts

All employment contracts must:

• Be written in Vietnamese
• Include role description, probation, wages, termination rules
• Clearly define working hours and social insurance coverage

Working Hours & Leave

• Standard workweek: 48 hours, 8 hours/day 
• Paid leave: 12 days annually, plus public holidays 
• Overtime: paid at 150–200% depending on timing
• Maternity leave: 6 months (extendable), fully paid via social insurance

Termination & Notice

• Probation: up to 2 months; 3-day notice for termination
• Fixed-term contracts: 3–5 days’ notice
• Permanent contracts: 30 days’ notice
• Severance pay may apply based on tenure (ILO Vietnam)

Non-compliance with notice, severance, or contract terms can result in penalties or employment disputes, making accurate HR guidance essential.

End-to-End Expansion Framework

1. Assess resource capacity
   • Do you have HR/legal support and expansion buy-in internally?
2. Define hiring goals
   • Choose functions (tech, ops, sales), size, and locations
3. Compare entry options
   • Evaluate entity setup vs. EOR trade-offs
4. Plan for compliance
   • Ensure proper contracts, payroll setup, leave tracking
5. Onboard talent
   • EOR can start immediately; entity hires begin post-registration
6. Monitor & scale
   • Use KPIs like time-to-hire, retention, and cost-per-hire to evaluate expansion ROI

Timelines & Speed to Market

Companies looking to capture growth windows or pilot Vietnamese operations often prefer the EOR model for its zero-delay hiring, scalable payroll compliance, and simplicity in exiting if needed.

Explore our Vietnam EOR service to see how we support your business with onboarding, benefits, and ongoing payroll management.

Case Example: Scaling Software Talent via EOR

A regional SaaS provider entered Vietnam to establish a local development team. By using the EOR model, they were able to:

• Onboard six software engineers in under 24 hours 
• Fully comply with local labour law and payroll obligations
• Test the market with low upfront investment and minimal admin

After six months, they saw strong product localization results and chose to expand headcount through the same model while keeping their operations agile.

Accelerate Your Hiring in Vietnam with Confidence

Vietnam’s strong economic outlook, rising digital infrastructure, and competitive workforce offer an attractive pathway for companies expanding in Asia. Whether you’re targeting a lean test market entry or long-term strategic growth, the right setup—backed by compliant hiring and payroll—will define your success.

Ready to hire in Vietnam?

👉 Speak to an EOR expert today and take your Vietnam hiring plans forward with speed and confidence.