Use an EOR when you need staff in Vietnam within days, you have fewer than about 25 people, or you are testing the market. Set up your own company when you must invoice Vietnamese customers, need a sector licence, or run a team large enough that the fixed cost of a company is lower than per-employee fees.
EOR and own entity compared
| Employer of Record | Your own company | |
|---|---|---|
| Time to first compliant hire | 3–5 working days | 2–4 months |
| One-time cost | None | US$15,000–45,000 (InCorp estimate) |
| Yearly running cost | A fee per employee | US$60,000–110,000 (InCorp estimate) |
| Statutory employer cost | About 23.5% on top of gross salary | The same 23.5% |
| Legal employer | The EOR | Your company |
| Invoicing Vietnamese customers | Not through the EOR | Yes |
| Sector licences | Not through the EOR | Yes, where foreign investors qualify |
| Leaving Vietnam | Lawful offboarding, in weeks | Formal dissolution, often 6–12 months |
Eor.vn figures are ours. Company cost ranges are estimates by InCorp Vietnam, listed under sources. Real costs depend on your sector, city and advisers.
What setting up a company in Vietnam involves in 2026
The Law on Investment 2025 (No. 143/2025/QH15) and Decree 96/2026 changed the order for foreign investors: you can now register the company first and obtain the investment certificate afterwards.
- Check market access. Some sectors limit foreign ownership or need conditions met first.
- Get the Enterprise Registration Certificate (ERC). This creates the company: name, office, legal representative and charter capital. At least one legal representative must live in Vietnam.
- Get the Investment Registration Certificate (IRC) within 12 months. The company may only carry out its investment project after the IRC is issued.
- Open the capital account and pay in charter capital within 90 days of the ERC.
- Register for tax, e-invoicing and social insurance, appoint an accountant, then sign labor contracts.
Advisers quote from 6–10 weeks to 2–3 months for a simple case. We plan for 2–4 months, because a lease, a bank account and capital transfers are what usually run late.
When does an entity become cheaper than an EOR?
Statutory insurance and tax are the same under both, so leave them out. Compare the EOR fee with the fixed yearly cost of a company. This table uses US$199, the top of our fee range. A lower fee pushes break-even higher.
| Employees | EOR fee per year at US$199 | Compared with a company at US$60,000–110,000 a year |
|---|---|---|
| 5 | US$11,940 | EOR is cheaper |
| 10 | US$23,880 | EOR is cheaper |
| 20 | US$47,760 | EOR is cheaper |
| 30 | US$71,640 | Depends on your company cost |
| 50 | US$119,400 | Company is cheaper at this fee |
At US$199, the two meet at about 25 employees if a company costs US$60,000 a year, about 36 at US$85,000 and about 46 at US$110,000. One-time setup cost is not included, and it moves break-even later still.
Why other guides say 12–25 employees. InCorp puts break-even at 12–25 employees over three years, because it compares against EOR fees higher than ours. Run this sum with the fee you are actually quoted.
When your own company is the right choice
- You need to sign contracts with Vietnamese customers and issue local invoices.
- Your business needs a Vietnamese sector licence, or you plan to import, retail or hold property.
- You expect to keep more than about 30 people in Vietnam for years.
- You have someone able to run accounting, tax, payroll and inspections, or a budget to buy that in.
When an EOR is the right choice
- You want your first hire working in days, not months.
- You are testing Vietnam and do not want to commit capital, a lease and a legal representative yet.
- Your staff serve your company abroad, so you have no need for local revenue.
- You have 1 to about 30 people and want one monthly invoice.
What an EOR cannot do
An EOR employs people. It does not give you a Vietnamese business. You cannot sell in Vietnam through it, hold licences through it or own assets through it, and you still direct the daily work yourself. If any of those matter, plan for a company.
Moving from EOR to your own company
Starting with an EOR does not lock you in. When your company is ready, staff can move to it under a new contract with their service recognised as agreed. We help clients make that transfer with no exit fee. Staff costs are explained on the pricing page, and contracts and insurance in the hiring guide.
Sources
- DFDL: changes under Decree 96/2026
- Apolat Legal: establishing a foreign-invested company under the 2025 Law on Investment
- InCorp Vietnam: EOR vs entity setup in Vietnam (cost estimates)
- Law on Enterprises 2020: charter capital within 90 days and a resident legal representative
