Establishing a Representative Office (RO) in Vietnam is a strategic, low-risk way for foreign businesses to explore the market, build partnerships, and manage communications, without forming a full company. However, employment within an RO is tightly regulated. This guide outlines the legal framework, hiring practices, and compliance obligations for operating an RO in Vietnam.
What is a representative office in Vietnam
A Representative Office is defined under Decree No. 75/2014/NĐ-CP and the Law on Commerce 2005 as a dependent unit of a foreign enterprise without independent legal personality. It is limited to non-commercial functions.
Permitted activities:
Conducting market research
Promoting products or services of the parent company
Supervising contract execution
Liaising with local partners and government authorities
Restrictions:
Cannot engage in direct profit-making activities
Cannot issue VAT invoices or sign commercial contracts
Cannot offer services or sell products
The RO model provides a low-risk entry for foreign businesses but must operate strictly within its legal limits. Manpower Vietnam’s HR compliance and staffing services can ensure your RO operates within legal boundaries while staying efficient in operations.
Who is the employer in a Representative Office?
A common question is whether a representative office can act as an employer. The answer is Yes - the legal employer can be either the representative office or the parent company.
In practice:
Chief representative: a critical role being appointed per Article 8 of Decree No. 75/2014/NĐ-CP, must reside in Vietnam, serve as the legal representative for all employment and administrative matters, such as hiring and firing.
Parent company: often responsible for payroll and tax compliance.
RO Responsibilities: manages local compliance, including payroll, tax reporting and labor declarations, even if salary is paid through the parent company.
Types of employees in a Representative Office
A. Local Vietnamese employees
Roles: administration, translation, accounting, or market research
Contracts: governed by the Labor Code 2019, requiring social, health, and unemployment insurance registration
Taxation: subject to Vietnam’s Personal Income Tax (PIT) law
B. Foreign employees
Roles: Often hold managerial or technical positions (e.g., Chief Representative)
Work Permit: required unless exempt under Decree 152/2020/NĐ-CP
Temporary Residence Card (TRC): available for stays over 12 months
Compliance: Subject to Vietnamese labor and tax regulation regardless of the contracting party
There are no fixed quotas on foreign staff in an RO, but justification must be submitted showing that qualified Vietnamese workers are not available. To simplify the process and consult your company’s specific cases, contact Manpower Vietnam’s expatriate services today.
Ways of hiring for a representative office
Representative Offices (ROs) have three main hiring approaches, each one supported by Manpower Vietnam’s expertise. Selecting the right approach depends on the RO’s capacity, long-term goals, and willingness to manage risks.
1. Direct hiring by the Representative Office
This is the most common model, where the RO acts as the employer, signing contracts and managing all employment-related compliance:
Payroll and salary payments
Personal Income Tax (PIT) withholding and filing
Social, health, and unemployment insurance registration
Labor declarations and reporting
Best for: ROs with adequate administrative capacity.
2. Hiring through the parent company
In this approach, the foreign parent company signs employment contracts, often used for expatriates. While salary payments can be made from overseas, the following obligations still apply under Vietnamese law:
PIT must be declared and paid locally
Foreign employees must obtain valid Work Permits (unless exempt)
The RO may need to report labor information to Vietnamese authorities
Best for: Expatriate-heavy ROs.
This method offers flexibility but comes with added complexity regarding local compliance, especially with Vietnamese intricate labor regulations. Therefore, many businesses choose Employee Of Record (EOR) service to ensure that their expatriate staff employment stays compliant with local laws.
3. Hiring via third-party HR service providers
Representative Offices (ROs) may outsource hiring and compliance to a licensed third-party HR firm (e.g., Manpower Vietnam). This approach works because Vietnam’s HR compliance framework is complex, with strict legal requirements covering labor contracts, taxation, insurance, work permits, and statutory reporting.
By working with experienced service providers, businesses can:
Avoid costly compliance errors
Save time on administrative procedures
Focus on business development rather than HR operations
Popular services offered by HR providers include:
Labor contract drafting in compliance with Vietnamese law
Payroll processing and PIT declarations
Social and health insurance registration
Work permit and visa services for foreign employees
Best for: ROs prioritize efficiency and compliance.
Special procedure for hiring Vietnamese employees
Hiring Vietnamese nationals for a Representative Office follows a mandatory process under Decree 75/2014/NĐ-CP, which took effect on September 15, 2014.
Recruitment Procedure covers 4 steps:
Step 1 – Submit request : Submit a formal request to a licensed Vietnamese labor recruitment agency. The request must clearly state:
Number of positions
Required qualifications and foreign language skills
Duties and responsibilities
Employment terms and resignation conditions
Step 2 – Candidate sourcing: Within 15 working days of receiving the request, the recruitment agency must provide suitable Vietnamese candidates to the employer.
Step 3 – Direct Recruitment: If no qualified candidates are introduced within the deadline, the foreign employer has the right to recruit directly.
Step 4 - Contract: Within 7 working days of signing the labor contract with a Vietnamese employee, the foreign employer must:
Notify the recruitment agency in writing
Provide a copy of the signed labor contract
Failure to follow these steps may result in regulatory penalties and invalidate the employment arrangement under Vietnamese law.
Work permit and immigration procedures
Foreign employees working at an RO require valid Work Permits and, in many cases, Temporary Residence Cards (TRCs). These processes are governed primarily by Decree 152/2020/NĐ-CP and related immigration regulations.
A. Work Permit requirements
To legally employ a foreign worker, the following documents and procedures are required:
Labor demand explanation: The RO must submit this to and receive approval from the Department of Labor, Invalids and Social Affairs (DoLISA), explaining why the foreign expert is needed.
Educational qualifications: A university degree (or equivalent) relevant to the job position.
Professional experience: At least 3 years of experience in the same field.
Criminal background check: Issued by the foreign employee’s home country or by Vietnamese authorities if residing in Vietnam.
Health certificate: Medical examination performed within the last 12 months at a licensed Vietnamese medical facility.
Processing time is typically 15–20 working days. The Work Permit is valid for up to 2 years, with possible extensions.
B. Temporary Residence Card (TRC)
Foreign employees with a valid Work Permit and a labor contract exceeding 12 months are eligible to apply for a TRC.
Issued by the Immigration Department under the Ministry of Public Security
Validity ranges from 2 to 5 years, depending on the length of the employment contract and work permit
TRC allows multiple entries and eliminates the need for visa renewals during its validity
Secure your talent with Manpower Vietnam
To ensure your business stays compliant with Vietnam’s complex tax, labor, and corporate registry regulations, it’s essential to have expert support.
Manpower Vietnam, with over 77 years of global experience, has been delivering workforce solutions locally since 2008. Fully licensed by the Ministry of Labor, we provide trusted HR consulting, recruitment, staffing, and outsourcing services. Our experts help businesses stay compliant with Vietnam’s tax, labor, and corporate registry regulations, covering payroll, insurance, labor reporting, and work permits, so you can operate with confidence from day one.
Ready to streamline your hiring process and ensure compliance? Fill out our form now to get started!