Understanding Vietnam’s labor laws is essential for any foreign company looking to hire or expand into the country. With ongoing regulatory updates and stricter enforcement, compliance has become a top priority for international employers operating in Vietnam.
As of 2025, employers must account for social insurance, health insurance, and unemployment insurance, which together can total over 32% of an employee’s salary (21.5% employer contribution + 10.5% employee contribution). Incorrect calculations or delayed submissions may lead to administrative penalties.
Personal income tax (PIT) compliance remains another key challenge. Under current regulations, late PIT filings can incur fines up to 25 million VND, in addition to 0.03% daily interest on overdue tax amounts. Foreign companies unfamiliar with the system often face delays, rejections, or costly corrections during tax finalization.
For companies hiring foreign nationals, Vietnam’s updated work-permit rules also require closer attention. The latest guidelines emphasize stricter document verification, job-position justification, and clearer proof of professional qualifications—creating potential bottlenecks for employers without localized HR expertise.
Contract management and termination procedures require equal caution. Vietnam mandates specific notice periods, sick-leave entitlements, severance obligations, and strict conditions for lawful termination. Failure to follow required steps may lead to disputes, back payments, or legal claims.
For global companies seeking to manage these complexities with confidence, Cake Vietnam provides an effective solution. Cake handles labor-law compliance, payroll, tax filings, contracts, and work-permit requirements -ensuring employers stay fully compliant while focusing on growth.
Discover how Cake Vietnam’s EOR service simplifies hiring and compliance for foreign employers HERE.
