Foreign traders regularly ask whether a liaison office can sign labour contracts in its own name. The short answer on representative office employees Vietnam is yes: the office may recruit and directly employ both Vietnamese nationals and foreign experts, subject to registration, tax and insurance obligations that many head offices underestimate.
This guide sets out the six rules that govern representative office employees Vietnam arrangements, drawing on the Labour Code 2019, Decree 07/2016/ND-CP and Decree 219/2025/ND-CP on foreign employees.
Representative Office Employees Vietnam: Direct Employment Is Permitted
Since the Labour Code 2019 a licensed representative office may enter into labour contracts directly with Vietnamese employees. It is no longer necessary to route hiring through an authorised labour supply organisation, although some groups still use employer of record arrangements for speed during the licensing period.
The contract is signed by the chief representative or by a person holding a valid written authorisation. The office must register its labour use with the local labour authority within the statutory window after commencing operations and report changes in headcount periodically.
Representative Office Employees Vietnam: Work Permits for Expatriates
Foreign staff of the office require a work permit unless an exemption applies. Decree 219/2025/ND-CP dated 7 August 2025 restructured the regime: the provincial People’s Committee is now the licensing authority, and the separate explanation of demand for foreign labour has been merged into the work permit application itself, removing a step that previously added several weeks.
Decree 219/2025/ND-CP also allows a foreign national to work in Vietnam for less than ninety days in aggregate per year without a work permit, subject to notification. This is useful for regional managers who visit periodically but are not based in Vietnam. Our guide to the work permit process covers documents and timing.
Representative Office Employees Vietnam: The Chief Representative
Every office must have one chief representative who resides in Vietnam. Where the chief representative leaves the country, a written authorisation must be given to another person; leaving the role vacant is a breach that can support revocation.
The chief representative may not concurrently head a branch of the same trader or act as chief representative of another foreign trader, and may act as legal representative of a Vietnamese enterprise of that trader only within the limits set by Decree 07/2016/ND-CP. Where a group runs both an office and a subsidiary, we recommend separating the two roles.
Representative Office Employees Vietnam: Tax and Insurance
Although the office pays no corporate income tax, it is a withholding agent. It must deduct personal income tax from salaries at progressive rates for tax residents and at the flat non-resident rate where applicable, remit monthly or quarterly, and complete annual finalisation for its employees.
Compulsory social, health and unemployment insurance applies to Vietnamese employees on contracts of one month or more. Foreign employees holding a work permit and a labour contract of twelve months or more are also within the compulsory social insurance regime. Underpaid insurance is the single most common finding in labour inspections of representative offices.
Representative Office Employees Vietnam: What Staff May Not Do
The licence limits activities to liaison, market research, promotion and supervision of contract performance. Employees may not negotiate final prices, conclude sales contracts, issue invoices or collect payment on behalf of the head office.
Where the team performs those functions in substance, the tax authority may treat the foreign trader as having a permanent establishment in Vietnam and assess corporate income tax on attributed profit. Job titles matter less than documented conduct: email trails showing price negotiation are what auditors look for. If the role genuinely requires commercial authority, the correct answer is a subsidiary, as explained in our representative office vs subsidiary comparison.
Representative Office Employees Vietnam: Headcount and Practical Limits
There is no statutory cap on the number of representative office employees Vietnam offices may hire. In practice, an office with a large team performing functions that look commercial invites scrutiny, and licensing authorities may question whether the declared scope matches the payroll.
A useful benchmark is function rather than number: sourcing, quality control, technical support and market intelligence roles are consistent with the licence; sales, account management and collections are not. Groups that outgrow the model should incorporate before the next annual report rather than after an inspection.
15 Things to Prepare Before Setting Up an FDI Company in Vietnam
A four-page pre-filing checklist covering structure and market access, capital and the DICA account, licensing and legalisation, work permits, and tax. Current to July 2026, including Decree 96/2026/ND-CP, Decree 219/2025/ND-CP and Decree 236/2025/ND-CP.
Frequently Asked Questions
Can the office pay salaries from an overseas account?
It should not. Salaries should be paid from the office’s Vietnamese account so that payroll, personal income tax and insurance records reconcile.
Do interns and probationers count?
Probationary employees are within the labour regime. Probation terms are capped by role under the Labour Code 2019 and must be stated in writing.
Is a collective labour agreement required?
Not for a small office, but internal labour regulations must be registered once headcount reaches the statutory threshold.
What happens to staff when the office closes?
Statutory severance, unused leave and notice entitlements must be settled before the closure dossier is accepted, and unpaid entitlements will stall tax clearance.
Get Employment Support
IVLF Advisors drafts compliant labour contracts, registers labour use, obtains work permits and residence cards, and reviews whether a team has drifted beyond its licence. See our representative office guide and labour advisory service, or the official guidance of the Ministry of Industry and Trade. Contact our team.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
