Vietnam’s software and tech outsourcing industry has experienced remarkable growth, fueled by technological advancements and business innovations. This surge has catalyzed economic, organizational, and industrial transformations, both domestically and internationally.
As a key outsourcing hub in the ASEAN region, Vietnam attracts global companies seeking cost-effective software development solutions. The country’s appeal lies in its competitive pricing and its pool of highly skilled IT professionals.
Major tech giants like Samsung, Microsoft, and Intel have made significant investments in offshore software development in Vietnam. Additionally, other technologically advanced nations frequently engage Vietnamese software engineers for large-scale projects.
The combination of an affordable workforce and qualified IT talent presents numerous opportunities in Vietnam’s software outsourcing sector.
This piece will explore the current advantages of launching a software outsourcing venture in Vietnam and provide guidance on how to proceed.
Reasons to consider starting a software outsourcing business in Vietnam
1. Available human resources to support the growth of IT businesses.
Over the past ten years, information technology has gained prominence in Vietnam’s educational landscape. Consequently, public and private schools, along with specialized learning centers, now widely offer software development, programming, and coding courses.
Vietnamese educators introduce coding to youth early, fostering diverse skills in the field from a young age.
The nation’s technology and IT education sector is experiencing rapid advancement in both quality and research output. This educational excellence, coupled with robust vocational training, has attracted international firms seeking top-tier software developers from Vietnam’s talent pool.
2. Competitive labor cost
Vietnam maintains its reputation for cost-effective hiring within the regional job market. Moreover, in the IT sector, Vietnamese software engineers’ compensation is notably competitive. Their salaries typically range from 50-60% of their counterparts in India or Singapore, and about 80% of those in Indonesia or Malaysia. Consequently, this wage differential contributes to Vietnam’s attractiveness as an outsourcing destination for tech talent.
3. Government’s incentives
Vietnam’s government is actively pursuing initiatives to attract international high-tech industries, creating a conducive environment for software development enterprises to establish and flourish.
The software production sector, in particular, is being incentivized with appealing tax benefits. These include potential tax exemptions and reductions for up to 15 years, making it one of the most fiscally attractive IT-related industries.
Moreover, the process of establishing an IT company in Vietnam is considered relatively straightforward compared to other business sectors. The following sections will delve into the specifics of this streamlined incorporation process.
How to Start a Software Outsourcing Company in Vietnam
Foreign entrepreneurs can fully own a software outsourcing company in Vietnam, typically structured as a Limited Liability Company (LLC). The process to establish such a venture involves several key steps:
- Secure a business address: A virtual office is acceptable for initial registration.
- Appoint a local representative: Designate a Vietnam resident as the legal representative.
- Determine initial capital: While not strictly regulated, most firms start with at least $10,000 USD. Higher capital is generally advantageous.
Once these prerequisites are met, the standard timeline for company registration is approximately 45 days. Upon receiving the business license, the company can immediately begin recruitment and contract negotiations.
This streamlined process makes Vietnam an attractive destination for setting up software outsourcing operations.
Discover How Iris International Can Help You Incorporate with Ease!
Iris International dedicates itself to providing invaluable advice and support for individuals looking to establish an IT company or a software outsourcing company in Vietnam. We tailor our company incorporation services to prioritize exceptional service at the most competitive prices in the market. Our team is well-equipped to guide you through the intricacies of qualifying your software production company for valuable Vietnamese government tax incentives.
Furthermore, we offer comprehensive solutions if you encounter difficulties in securing a business address, which can be facilitated through our Virtual office service, or in appointing a resident director for the company, utilizing our nominee arrangement. We encourage you to reach out to us today to commence discussions on how to effectively open your IT business in Vietnam.
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