EOR or Labour Outsourcing in Vietnam: Which Is Better?
Introduction
Labour outsourcing in Vietnam is a regulated arrangement. The Labour Code caps each leased worker at 12 months, and a 2026 government resolution changed the rules on who can supply them.
That makes the choice between labour outsourcing and an EOR a practical one. If you’re planning headcount in Vietnam, your answer decides who employs your people and how long they stay.
What Is Labour Outsourcing in Vietnam?
Labour lease, the Labour Code’s term for labour outsourcing, is when a supplier company employs a worker and sends them to work for and under another employer. The supplier signs the employment contract and pays the wages, while your company directs the daily work.
Four ground rules apply:
- Under a 2026 government resolution, suppliers no longer apply for a labour lease licence. They notify the provincial Department of Home Affairs and keep a VND 2 billion deposit, and firms with a valid licence can keep operating.
- Under the Labour Code, leasing applies only to jobs on a government list.
- The Labour Code allows a worker to be leased for up to 12 months.
- Leasing is allowed only for set purposes: a temporary rise in workload, cover for staff on maternity leave or recovering from a work injury or illness, or demand for highly qualified workers.
Who Does What in a Labour Lease?
The supplier is the employer, but you still carry duties toward the worker day to day. This table follows the Labour Code’s rules for each side.
Area | Supplier | Your company |
Starting the lease | Supplies workers who meet your requirements and explains the contract terms | Agrees night or overtime work with the worker |
Pay and treatment | Pays wages no lower than yours for comparable work | Treats leased and own staff without discrimination |
Records and rules | Keeps records and reports to the provincial labour authority | Informs leased workers of internal rules |
Problems | Disciplines workers you return for breaches | Returns workers who breach discipline, with evidence |
In short, the supplier handles employment and pay, while you handle the daily work and treatment of the person.
What Does an EOR Handle in Vietnam?
An EOR employs the person you hire and takes on the employer’s paperwork. Galaxy APAC’s Vietnam EOR service lists these areas:
- The EOR processes payroll and taxes for the employee.
- Labour law and statutory compliance support is part of the work.
- Onboarding paperwork and orientation are covered.
- HR administration for the employment also falls to the EOR.
Ask your provider which of these sit with them and which stay with you. For a closer look at this route, see how to hire remote talent safely through an EOR in Vietnam.
Which Is Better for Your Vietnam Hiring Plan?
Neither is better in every case, because each fits a different need.
When Labour Outsourcing Fits
Labour outsourcing works for the set purposes the Labour Code allows, when your need is short and clearly defined:
- You need extra hands for a temporary rise in workload.
- You’re covering staff on maternity leave or recovering from a work injury or illness.
- The job appears on the government’s list of permitted jobs.
- The need will end within 12 months.
When an EOR Fits
An EOR suits hires you want to keep on your team:
- You want the person on your team for longer than 12 months.
- You have no Vietnam company yet and want a local employer in place.
- Your priority is having payroll, tax, and employee administration handled.
Labour outsourcing runs on a clock: each lease stops at 12 months, so plan for what happens in month 13.
Whichever route you take, check the pay. Vietnam sets regional minimum wages, and the Labour Code says leased workers must earn no less than your comparable employees.
What Should You Check Before Choosing Labour Outsourcing in Vietnam?
Before choosing labour outsourcing, check that the supplier is allowed to operate, the job is on the permitted list, the lease contract is in writing, and the end date is set. Each check keeps you inside the Labour Code and the 2026 resolution. Here are five things to cover before you sign, based on the Labour Code’s lease rules:
- Ask the supplier for proof it can operate, such as a valid licence or its notice to the Department of Home Affairs, and confirm its VND 2 billion deposit.
- Match your role’s actual duties against the permitted job list.
- Get a written lease contract that states the workplace, job, duration, working hours, and safety conditions.
- Agree the end date up front, since 12 months is the maximum.
- Don’t use leased workers to replace striking staff or employees dismissed for restructuring or economic reasons.
Confirm who can supply leased workers before you sign, because the licensing rules changed in 2026.
Frequently Asked Questions
1. Can I hire a leased worker directly when labour outsourcing ends?
Yes, with agreement. You can recruit a leased worker directly while the lease is still running if both the worker and the supplier agree. A worker can also negotiate to end the lease and sign a direct contract with you.
2. Which jobs can use labour outsourcing in Vietnam?
Only jobs on the government’s permitted list. The Labour Code leaves that list to the Government, so ask the supplier to show you the current list and match it to the role’s duties before you sign. If the role isn’t listed, compare an EOR or direct hiring instead.
3. Who is responsible if a leased worker is injured at work?
The lease contract must spell out liability for occupational accidents or diseases. Leasing isn’t allowed at all without a specific agreement on it, so settle this before the worker starts.
4. Will labour outsourcing cost less than hiring my own staff?
Not by paying workers less, because leased workers must be paid no less than your own comparable employees. Ask each provider for its fees in writing, then compare the total cost for the same role over the same period.
5. Can I move a leased worker to another company I run?
No. The Labour Code bars the hiring party from passing a leased worker to another employer. Plan one lease for each company that needs the worker.
Neither option wins on its own: labour outsourcing in Vietnam suits short, listed jobs that end within 12 months, and an EOR suits people you want on your team for longer. If you go the first way, verify the supplier’s status and the job list, then agree an end date. If you choose the second, ask your provider to name who handles payroll, compliance, and exits.
Galaxy APAC’s Vietnam pages cover EOR and staffing, so ask the team which fits your role. Talk to Galaxy APAC about Vietnam staffing and EOR support before you commit.
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Frequently Asked Questions
1. Is EOR Japan legal?
Yes. EOR arrangements operate under the Labour Contract Act, where the EOR becomes the statutory employer. No special government licence is required. This differs from worker dispatch (haken), which requires a licence and is subject to a three-year placement cap. An EOR isn’t a staffing intermediary. It’s the actual employer of record.
2. Can an EOR in Japan sponsor work visas for foreign national employees?
Yes, if visa sponsorship is included in the provider’s service scope. The EOR, as the registered employer, can file the Certificate of Eligibility with the Immigration Bureau and manage renewals. Confirm this is explicitly included in your agreement and check which visa categories they support. Not all providers handle this as a standard service.
3. Does using an EOR remove the complexity of Japan's dismissal protections?
No. The EOR handles the administrative execution of a dismissal: notice, documentation, and statutory process. But the foreign company’s performance management decisions are what determine whether a termination is defensible. Japan’s abuse of dismissal doctrine applies regardless of the employment structure. The EOR can execute compliantly; it can’t retroactively justify cause that wasn’t built through proper management.
4. What happens when a fixed-term employee reaches five years of service?
Under the Labour Contract Act’s five-year rule, once cumulative fixed-term service exceeds five years without a gap longer than six months, the employee can request conversion to an indefinite contract. The EOR can’t refuse. Employment terms stay the same; the contract simply becomes open-ended. International employers should factor this into workforce planning for roles initially scoped as project-based.
5. How long does onboarding through an EOR in Japan typically take?
Most providers complete onboarding in two to four weeks from signed agreement to first day of work. The main variables are whether the hire requires visa sponsorship, the complexity of the employment contract, and social insurance registration timelines. Providers with established Japan operations and pre-built compliant contract templates move faster.
