Labor Lease License Vietnam | Why It Matters for EOR Services

As Vietnam emerges as a key destination for international business expansion, many companies are eager to establish a workforce quickly and compliantly. Employer of Record (EOR) services have become an effective solution, allowing businesses to hire local employees without setting up a legal entity.

Yet, one critical factor in choosing an EOR provider is often overlooked: whether the provider holds a valid labor lease license. This license is far more than a bureaucratic formality—it’s the legal backbone of compliant EOR operations in Vietnam.

What is a Labor Lease License?

A labor lease license is an official authorization granted by the Vietnamese government, allowing a company to legally provide labor outsourcing and leasing services.

In EOR services, it means the provider can legally employ workers on behalf of foreign clients and lease those employees back to them. Without this license, an EOR provider cannot legally operate in Vietnam, and foreign businesses risk serious legal and financial consequences if they partner with an unlicensed provider.

Why Does a Labor Lease License Matter for EOR Services?

1. Legal Compliance

Vietnamese labor regulations are strict and carefully enforced. Only licensed organizations are allowed to hire employees and lease them to client companies under local law. Partnering with a licensed EOR ensures:

• Employment contracts comply fully with Vietnamese regulations

• Statutory contributions (social, health, unemployment insurance) are properly calculated and submitted

• Payroll and tax processes meet local compliance standards

2. Risk Mitigation

Businesses working with an unlicensed EOR expose themselves to:

• Heavy fines for non-compliance

• Potential liability in labor disputes or workplace incidents

• Disruptions to operations if government authorities intervene

Vietnam’s Decree No. 12/2022/ND-CP clearly defines penalties for violations. For example:

“Article 13. Violations against regulations on Labor Lease Licenses

A fine of between VND 40,000,000 and 50,000,000 shall be imposed on the outsourcer committing one of the following acts:

b) Using outsourced workers provided by enterprises that do not have a Labor Lease License or an expired Labor Lease License.”

This regulation underscores how crucial it is for foreign companies to verify their EOR partner’s legal status.

3. Operational Efficiency

Licensed EOR providers have established processes and expertise to:

• Recruit and onboard employees quickly

• Draft labor contracts that comply with Vietnamese laws

• Manage payroll, tax filings, and benefits administration

• Handle audits or labor inspections with confidence

This ensures your business can focus on its core operations while staying compliant.

4. Access to Skilled Talent

Licensed EOR providers maintain broad networks and relationships, helping foreign companies access Vietnam’s talent pool quickly and effectively. This is particularly important in sectors like technology, manufacturing, and services where speed and reliability are critical.

How to Choose an EOR Provider in Vietnam

When evaluating EOR providers, businesses should consider:

• License Verification: Always confirm that the provider holds a valid labor lease license from Vietnamese authorities. THIENTU proudly maintains an official labor lease license, demonstrating our compliance and reliability.

• Experience and Expertise: Look for a provider with a proven history in handling HR, payroll, and legal compliance in Vietnam.

• Technology and Innovation: Modern EOR providers should leverage technology to ensure efficiency and transparency in HR processes.

• Global Reach: For companies operating across multiple countries, a globally experienced EOR provider offers significant advantages.

• Responsive Client Support: Quick, professional support is essential for resolving issues and maintaining smooth operations.

Why Partner with THIENTU?

Choosing THIENTU as your Employer of Record Vietnam partner provides numerous benefits:

• Full compliance with Vietnamese labor laws and tax regulations

• Legal operations backed by a valid labor lease license

• Local expertise combined with a global perspective

• Fast, compliant onboarding for new employees

• Transparent pricing and proactive communication

Conclusion

A labor lease license is not merely a regulatory checkbox—it is the legal cornerstone of any EOR relationship in Vietnam. Businesses aiming to expand into this dynamic market should partner only with licensed, experienced providers to avoid risks and ensure smooth operations.

THIENTU stands ready to be your trusted partner for compliant and efficient EOR services in Vietnam.

Frequently Asked Questions about Labor Lease Licenses and EOR in Vietnam

What is a labor lease license in Vietnam?

A labor lease license is an official government permit that authorizes a company to legally hire employees and lease them to client businesses. Without this license, EOR providers cannot legally operate in Vietnam.

Why is a labor lease license important for EOR services?

A labor lease license ensures that the EOR provider is legally compliant and authorized to operate. Working with an unlicensed provider can expose businesses to fines, legal risks, and operational disruptions.

How can I verify if an EOR provider has a valid labor lease license?

Businesses should always request a copy of the provider’s labor lease license and verify its validity through Vietnamese government channels or official records. Licensed providers like THIENTU are transparent and willing to share this documentation.

What are the penalties for using an unlicensed EOR provider?

According to Decree No. 12/2022/ND-CP, companies that use outsourced workers from unlicensed providers can face fines ranging from VND 40,000,000 to 50,000,000. Legal liabilities and operational disruptions can also occur.

Does THIENTU have a labor lease license?

Yes. THIENTU holds a valid labor lease license issued by Vietnamese authorities, ensuring full compliance with local laws and regulations. This provides our clients with peace of mind and legal security.

Can an EOR provider without a labor lease license still offer services in Vietnam?

No. Without a labor lease license, a company cannot legally provide EOR services in Vietnam. Partnering with an unlicensed provider exposes businesses to significant legal and financial risks.