Vietnam is one of Southeast Asia’s fastest-growing investment destinations, attracting Singaporean companies across technology, manufacturing, finance, and professional services. With a workforce of 53 million, a labor participation rate near 69%, and tech hiring demand rising 30% YoY, Vietnam offers strong potential for regional expansion.
However, Singaporean businesses still face several challenges when entering the market.
1. Complex regulatory framework
Vietnam’s labor regulations, tax rules, and HR procedures differ significantly from Singapore’s. Mandatory SHUI (social, health, and unemployment insurance) contributions total 34% of salary (23.5% employer + 10.5% employee). Non-compliance can result in fines, back payments, or unexpected payroll liabilities.
2. Lengthy entity setup
Registering a local company can take 3–6 months, requiring capital contribution, annual audits, and ongoing administrative management—burdens that many early-stage companies may not be prepared to handle.
3. Hiring and retention challenges
Competition for skilled talent is intense. Top candidates often accept offers within days, not weeks, making slow hiring cycles costly. Benefits and workplace expectations also differ from Singapore, requiring localized HR strategies to attract and retain talent.
4. Foreign worker permitting
Vietnam strengthened work-permit regulations in 2025, increasing documentation requirements and verification steps. Delays are common without strong local HR support.
To overcome these challenges, many Singaporean companies rely on Cake Vietnam’s Employer of Record (EOR) service. Cake manages compliance, payroll, contracts, SHUI contributions, and onboarding – allowing businesses to hire local talent without setting up a legal entity.
Discover how Cake Vietnam helps Singaporean firms expand confidently and compliantly HERE.
