A Vietnamese company that wants an American on the team faces two very different projects wearing the same name.
The first is a capital project: register a US company and fund it from Vietnam. That runs into Vietnam's outbound investment rules and the State Bank's control over moving money offshore, and it takes weeks of paperwork before a dollar leaves the country.
The second is a hiring project: get one person in Seattle or Miami onto a compliant US payroll. That does not require a US company, does not involve the outbound investment process, and can be done in days.
Companies tend to assume the first is a precondition for the second. For most first US hires, it is not. Sorting out which project you are actually running is the decision that saves the most time.
Vietnam's Outbound Investment Rules, and What Changed in 2026
If you incorporate and fund a US subsidiary, you are making an outbound investment, and Vietnam regulates that in two layers.
The first layer is the Outward Investment Registration Certificate (OIRC), issued by the Ministry of Planning and Investment. It is the state's recognition of the offshore project, and historically every overseas investment needed one.
The second layer is foreign exchange. Even with an OIRC in hand, the money does not move until the State Bank of Vietnam accepts your foreign exchange registration. In practice the SBV is the decisive authority: an approved or even exempted investment still cannot transfer capital until the SBV registration is complete.
Here is the 2026 change worth knowing. Under Decree 103/2026, effective 3 April 2026, projects with total investment capital below 7 billion VND (roughly USD 275,000 to 280,000) are now exempt from the OIRC requirement. For a company funding a modest US subsidiary to run payroll for a few people, that exemption often applies, which removes the MPI certificate step.
Two things the exemption does not remove:
- The SBV foreign exchange registration still applies. Exemption from the certificate is not exemption from currency control. You still register the transaction with the State Bank before capital moves.
- Reporting continues. Small-scale exempt projects still carry ongoing reporting obligations on the investment's status.
One caution specific to Vietnamese groups: the MPI has historically been hesitant to issue offshore certificates, and startups in particular have found the process slow enough to delay funding rounds. The 2026 exemption eases the smallest cases, but anything above the threshold or in a conditional sector still goes through the full route.
None of this applies when you pay an Employer of Record. Paying for employment services is a current transaction, not capital invested abroad, so it sits outside the outbound investment framework entirely. No OIRC, no MPI step, no SBV capital registration. For a company that wants an American working next month, that is usually the deciding difference. Confirm your own position with your bank and Vietnamese counsel, since the 2026 rules are recent and the thresholds have specific conditions.
Employing the American: Three Routes
Using an Employer of Record
An Employer of Record is a US company that employs your hire for you. It runs their payroll, withholds federal and state tax, files with the IRS and the state, enrolls them in health cover and benefits, and holds the legal employment relationship. Your team directs the work. On paper, the EOR is the employer.
You pay salary, employer-side taxes, and a per-employee fee. No US incorporation, no capital transfer, no outbound investment process, no state registrations in your name.
This fits a company hiring one to fifteen Americans that wants them working in days. It fits less well once twenty or more people sit in one state and the US has become permanent, since the fee then starts to lose to your own entity.
The trade is that the EOR sits between you and the employment relationship. Contract changes, terminations, and unusual benefits requests route through them.
Setting Up Your Own US Entity
You incorporate, usually a Delaware LLC or C-corp, get an Employer Identification Number, open US banking, register as an employer in each state where someone lives, build payroll, and appoint a US accountant.
The US incorporation is fast and cheap, which is the misleading part. A Delaware LLC files in about a day and the EIN issues quickly for under $100. The cost is everything after: state-by-state registration, multi-state payroll, federal and state filings, and US benefits administration, running $5,000 to $40,000 all-in depending on how many states you touch. On the Vietnam side, add whatever the outbound investment route requires, which for anything above the exemption threshold means the OIRC plus SBV registration before funding.
Worth doing when the US is a committed long-term market and headcount in one state is heading past ten or fifteen. If you already run payroll in more than one country, the US mechanics will feel familiar.
One thing to rule out early: a US PEO is not a substitute for an EOR here. A PEO works on co-employment and assumes you already own the US entity. With no US company, a PEO has nothing to work alongside. An EOR does the whole job.
Engaging a Contractor
A contractor arrangement is fast and cheap, and legitimate when the relationship genuinely is contracting: their own hours, their own equipment, other clients, invoices for deliverables, their own tax. You collect a Form W-9, pay invoices, and issue a 1099 at year end.
It stops being legitimate when the person is a full-time employee in all but name: exclusive to you, on your schedule, on your systems, reporting to your manager. The IRS applies one test and states apply their own, with California's ABC test treating most full-time workers as employees whatever the contract says. Misclassification brings back taxes, unpaid overtime, penalties, and the employer contributions you skipped.
Contractors suit genuinely independent work. For a full-time role they are not a shortcut, and US enforcement does not go easier on a foreign company.
One Country, Fifty Rulebooks
US employment is regulated at the state level as well as the federal level, which catches Vietnamese companies out because the Labor Code at home is national, applied consistently across provinces.
The US does not work that way. Your engineer in Seattle sits under different tax, wage, and leave rules than your salesperson in Austin. A third hire in New York adds a third set of employer registrations, a third state tax regime, a third unemployment insurance account, and in some states a separate paid-family-leave contribution.
Incorporating does not fix this. A Delaware entity makes you a US employer; it does not register you in the states where your people live. You file in each one either way, so a US team that looks small on a headcount chart can carry a wide compliance footprint.
What a US Hire Costs
The federal employer burden is low, and the comparison to Vietnam is favorable.
US employer-side FICA is 7.65% of wages, made up of 6.2% Social Security up to the annual wage cap and 1.45% Medicare, with federal unemployment adding a small amount per head. Set against Vietnam's compulsory employer contributions to social, health, and unemployment insurance, which together add around 21.5% on top of salary, the US federal burden is meaningfully lighter.
The state layer is where US costs turn unpredictable rather than high. Unemployment insurance carries a different rate and wage base in every state, several states add disability or paid-leave contributions, and workers' compensation is mandatory almost everywhere and priced by role and location.
Health insurance is the cost with no direct Vietnamese equivalent. There is no US national system funded by employer contributions in the way Vietnam runs compulsory health insurance. American candidates in professional roles expect employer-sponsored medical cover as a baseline, and for a small team it can be one of the larger budget lines. An EOR provides group rates a Vietnamese company with three US employees could not secure alone.
If you use an EOR, add the fee. Ours is $579 per employee per month, flat, with no deposit and no pre-funding. Some providers hold a deposit worth a month of salary or charge a percentage of payroll, so ask for the full structure rather than the headline rate. It helps to compare what a hire costs across countries before you fix where the role sits.
The Time Zone Is a Full Day Apart
Vietnam sits at UTC+7, which puts you eleven to twelve hours from the US East Coast and fourteen to fifteen from the West. There is effectively no overlap with an American workday. When New York starts at 9am, it is around 9pm in Hanoi.
That gap shapes what a US hire is for. A US-facing sales or customer role works well, since the American covers American hours with American customers and syncs with Vietnam in a narrow window at either end of the day. A role that needs daily collaboration with your Vietnam team, engineering especially, needs a deliberate answer: a fixed overlap window someone agrees to work, or genuine async process with written decisions and recorded updates.
Companies hiring into the US from elsewhere in Asia meet the same wall. The teams that struggle are the ones that treated the time difference as a detail rather than a design decision.
What Surprises Vietnamese Employers
At-will employment. Most US states let either side end the relationship at any time, with no statutory notice and no severance. After Vietnam, where the Labor Code requires lawful grounds and notice periods to end a contract and severance allowance accrues with tenure, this feels like an absence of rules rather than flexibility. Notice and severance in the US are things you write into a contract, not defaults that apply on their own.
Lighter statutory load, heavier market expectation. US statutory employer costs are well below Vietnam's insurance contributions, but the market expectation of employer-paid health insurance, and often a 401(k), fills much of that gap in practice. Budget to what candidates expect, not to the legal minimum.
No severance accruing in the background. There is no US equivalent of severance allowance building up per year of service. Long-term per-employee liability is lower; monthly benefits cost is higher.
A US salesperson can raise a tax question. If someone in the US is concluding contracts on your company's behalf, it can create a taxable presence there, separate from any employment matter. Raise it with your tax adviser before the first large deal, not after.
A Sequence That Works
Start on an EOR for the first hires. It avoids the outbound investment process entirely, needs no incorporation, and puts someone on payroll in days. If the US market does not develop, you end a service agreement rather than unwinding a company and moving capital back through the SBV.
Incorporate once the case is clear: one state past roughly ten people, revenue that justifies both the US compliance overhead and the outbound investment steps, and a firm decision that the US presence is permanent. Then run the entity for the concentrated team and keep scattered remote employees on the EOR, which is where most companies settle.
Use contractors only where the work is genuinely independent. A full-time role labeled as contracting costs more than it saves once a US state disagrees with the label.
If you are past the route decision and comparing providers, our breakdown of EOR providers operating in the United States covers pricing, onboarding speed, and compliance coverage across twelve platforms.
Frequently Asked Questions
Can a Vietnamese Company Hire a US Employee Without a US Entity?
Yes. An Employer of Record employs the person through its own US entity and handles federal and state payroll, tax withholding, benefits, and compliance while your team directs the work. Incorporating is the alternative, and it takes longer, since funding the US entity runs through Vietnam's outbound investment and foreign exchange steps before capital can move.
What Does Vietnam Require to Fund a US Subsidiary?
Funding a US entity is an outbound investment. Historically it needed an Outward Investment Registration Certificate from the Ministry of Planning and Investment plus foreign exchange registration with the State Bank of Vietnam. Under Decree 103/2026, effective April 2026, projects under 7 billion VND (about USD 275,000 to 280,000) are exempt from the certificate, though the SBV foreign exchange registration and ongoing reporting still apply. Confirm your position with your bank and counsel, since the thresholds carry conditions.
Can We Pay a US Employee From Our Vietnam Payroll?
No. Someone working in the US is employed under US federal and state law, with US tax withholding, FICA, and US benefits. A Vietnam payroll system cannot produce a W-2 or remit to the IRS, and paying a full-time worker by invoice risks reclassification, back taxes, and penalties in whichever state they live in.
How Much Should We Budget Above Salary for a US Hire?
Employer-side FICA is 7.65%, plus state unemployment and workers' compensation, which vary by state. That is lighter than Vietnam's roughly 21.5% employer insurance contributions. Health insurance is the offsetting cost, since it is employer-funded in the US with no state equivalent and American candidates expect it. Add either an EOR fee or the setup and ongoing cost of a US entity, which starts around $5,000 and reaches $40,000 depending on state coverage.
How Long Does It Take to Get an American Working?
Days through an EOR, once documentation is complete. Through your own entity, weeks to several months, covering the Vietnamese outbound investment steps, US incorporation, banking, and state registrations before payroll can run.
Does Our US Hire Need Sponsorship?
Not if they are a US citizen or already authorized to work in the US and are staying there. You are employing an American where they already live, so no immigration process applies. Sponsorship only arises if you relocate someone into the US, which is a separate exercise.
