When do you graduate from an EOR to your own Vietnam entity?

The calculation below uses USD 599 as the Teamed fee. VND figures depend on the USD/VND exchange rate at time of invoice. Teamed charges from $599 USD with zero FX mark-up.

All entity cost figures in this table are typical ranges. They cover outsourced payroll bureau, bookkeeping, tax compliance, and HR admin for a small Vietnam LLC with 1 to 15 employees. They are illustrative, not law figures. Actual costs vary with the scope of your business licence, the complexity of your benefits programme, and whether you use a Representative Office or a full LLC.

The crossover compresses faster at higher salaries. Employer social contributions at 21.5% apply on insurable earnings up to the statutory contribution ceiling. Above that ceiling the contribution is capped, so the effective cost rate on high-salary hires is lower. For senior tech hires earning above the ceiling, the crossover shifts toward 6 to 8 employees. For mid-market salaries it shifts toward 8 to 10.

Run the Crossover Calculator with your own headcount and salary band.

1. Calculate the EOR cost

   Multiply the Teamed fee (from $599 USD) by your planned Vietnam headcount. This is the fixed variable cost. It grows linearly as you hire.

2. Estimate the entity fixed overhead

   Typically USD 2,500 to 4,000 per month for a small Vietnam LLC. This covers payroll bureau, bookkeeping, tax filings, social insurance admin, and first-point HR. This cost does not grow much until headcount exceeds 15.

3. Find the crossover headcount

   The crossover is where EOR monthly cost equals entity monthly overhead. For most Vietnam tech salary bands in Ho Chi Minh City or Hanoi, this is around 6 to 10 employees. Use the Crossover Calculator for your own numbers.

4. Factor in non-financial triggers

   The maths gives you a headcount threshold. Regulated business licences, government contract eligibility, and PE substance requirements are separate questions that may override the cost crossover in either direction.

5. Plan the graduation date

   Allow 8 to 16 weeks for entity formation before the first payroll on your own entity. The Investment Registration Certificate and bank account are typically the gating steps. Start the GEMO process while EOR continues running.

These are typical ranges. They are not law figures. There is no law that sets what a Vietnam LLC costs to form. The range reflects real market rates for legal and corporate services. It varies significantly with the number of business activities you register and how much substance your structure needs.

Why the Investment Registration Certificate is the hidden bottleneck

Foreign investors must obtain an Investment Registration Certificate from the Ministry of Planning and Investment before they can register the enterprise itself. This two-step sequence, plus the need to negotiate your registered business activities list upfront, typically turns a simple company formation into an 8 to 12 week process. Bank accounts for foreign-owned entities add a further 4 to 8 weeks at many Vietnamese commercial banks. Plan for the sequence before you set your first payroll date.

These figures are typical market ranges for a small Vietnam LLC with 1 to 15 employees. They are illustrative. They are not law figures. Actual costs depend on whether you outsource or hire in-house, your registered business scope, and the complexity of your payroll and benefits programme.

Above 15 employees, dedicated Vietnam HR and accounting headcount typically become necessary. The cost band widens at that point. The annual statutory audit requirement for foreign-invested companies adds a recurring cost that domestic entities can sometimes avoid.

Most cost comparisons skip the legal-representative dimension because it is hard to put a number on. It is worth naming explicitly before you decide.

Personal legal representative duties

Under the Labour Code 2019 and the Law on Enterprises, every Vietnam LLC must have a designated Legal Representative who is personally responsible for the company's compliance with labour, tax, and social insurance obligations. A Legal Representative who signs payroll that under-declares social insurance contributions can face personal administrative fines. Repeat violations can trigger criminal liability under Vietnam's Penal Code.

The compliance treadmill

• Social insurance monthly declaration: by the last working day of each month. Late means an administrative penalty and interest on underpayments.
• Personal income tax withholding: provisional declaration and payment by the 20th of the following month.
• Quarterly CIT provisional return: within 30 days of quarter end.
• Annual audited financial statements: all foreign-invested entities must be audited annually.
• DOLISA labour reporting: annual report on employee headcount, wages, and working conditions to the provincial Department of Labour.
• Internal labour regulations: must be filed with the local DOLISA and updated when any material term changes.

Each filing is individually manageable. Stacked across a year, they consume real management attention from your Legal Representative. An EOR carries all of these on its own entity.

• Under 6 Vietnam employees at typical tech salaries: EOR is cheaper and faster every month. The entity overhead has nothing to amortise against.
• Market validation phase: you are hiring 1 or 2 people to test commercial fit. Entity setup commits capital and management attention before you know whether Vietnam will deliver.
• Project-based hires: 6 to 18 month engagements where the formation cost and timeline will not amortise before the project ends.
• No Investment Registration Certificate bandwidth: the two-step IRC plus ERC process requires real legal capacity. If you have no Vietnam-experienced legal team yet, the process will consume disproportionate management time.
• Acquired team you may divest: post-acquisition holding patterns where adding a Vietnam entity creates wind-up complexity later. Dissolving a Vietnam LLC requires a full tax and SI audit before the authorities close the file.

• Sustained headcount above 8 Vietnam employees at typical tech salaries: the entity overhead amortises across enough people that per-head cost falls below the EOR fee.
• Regulated business activities: if your business in Vietnam requires a sector-specific licence (fintech, education, healthcare, logistics), the licence must be held by an entity in which you hold investment rights. An EOR cannot hold this for you.
• Government contracting and procurement: Vietnamese public-sector contracts typically require the supplier to be a registered legal entity in Vietnam with a local tax code. EOR employment alone does not satisfy this.
• Permanent establishment substance: some cross-border tax structures need actual Vietnam substance (employees in your own entity, registered address, banking) to avoid deemed PE issues. EOR employment in a third-party entity does not count as your substance for this purpose.
• Transfer of technology or IP registration: registering technology transfer agreements or IP licences in Vietnam typically requires a local legal entity as the registered party.

The technical mechanic is contract novation: the employment contract transfers from Teamed's partner entity to your new Vietnam LLC on a specified effective date. All terms carry across. Salary, social insurance contribution history, leave entitlement, and the continuous service date all remain unchanged. The employee sees a different employer name on their payslip and social insurance records. Nothing else changes.

What we do operationally:

• Assist with your Vietnam entity formation through GEMO, typically 8 to 16 weeks, while EOR continues running in parallel.
• Register the new entity's social insurance account with the Vietnam Social Insurance Agency (VSS).
• Novate every active employment contract on a single effective date.
• Migrate ongoing social insurance, health insurance, and unemployment insurance contributions without any lapse in the employee's accumulation history.
• File final EOR-period SI declarations and open new SI registrations on the entity from the novation date.
• Provide the same People Ops specialist as the post-graduation primary contact.

The Graduation Model exists because every other EOR makes this hard. We treat the move as something we help you plan for from the day you hire your first employee through us. Given the 8 to 16 week Vietnam formation timeline, starting the entity process at 5 or 6 employees is better than waiting until you have already crossed the cost threshold.

Your Vietnam hires are handled by real HR and legal experts, from the first offer letter through every monthly social insurance declaration and annual PIT finalisation. You get an actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Every employer cost passes through at cost, itemised on every invoice. You see the social contribution line at 21.5% and the leave accrual for 12 days per year. Nothing is hidden inside the management fee.

Vietnam folds retirement, health insurance, and unemployment insurance into a single employer contribution rate of 21.5%. There is no separate employer pension scheme. On both sides of the comparison, this rate applies on insurable earnings up to the statutory ceiling. The entity side also carries formation costs and ongoing compliance overhead that do not appear in the contribution rate itself.

EOR payroll, contractor onboarding, and entity setup all live on one platform. Run the Crossover Calculator to see the month the model flips. Start from the Vietnam hiring overview. Key sources: Vietnam Labour Code 2019 and PwC Vietnam Social Insurance summary.