Vietnam has emerged as a premier destination for software development in the Asia-Pacific (APAC) region, earning the title of “A small but mighty powerhouse” by Forbes. With exceptional progress in education, a stable economy, tech literacy, and effective remote development capabilities, Vietnam is setting a new benchmark for the software development industry in APAC.
In this blog, we explore why Vietnam shines as the ideal destination for establishing remote software development flexible teams or dedicated centres, covering its booming tech scene, skilled workforce, government support, and strategic advantages.
Thriving Tech Ecosystem
Vietnam’s tech ecosystem has experienced exponential growth, establishing the country as a vibrant hub for innovation and software development. In 2021, Vietnamese tech startups secured over $1.4 billion in venture capital funding, a remarkable 57% increase from the previous year. This influx of investment demonstrates the confidence and support from investors, solidifying Vietnam’s position as a tech powerhouse.
According to the e-Conomy SEA 2022 report by Google, Bain & Company, and Temasek, Vietnam’s digital economy is projected to reach $50 billion by 2025, making it the fastest-growing market in Southeast Asia. The digitalization of various industries is expected to reach a minimum of 10% and contribute 20% to the country’s GDP.
Highly Skilled & Competent Workforce
Vietnam boasts a young and talented workforce renowned for their proficiency in software development. The country’s education system places a strong emphasis on STEM fields, resulting in a significant number of skilled graduates annually. This vast talent pool ensures a steady supply of qualified professionals for the software development industry, allowing companies to access top-notch expertise.
Vietnam’s proficiency in the English language among the younger generation contributes to its appeal as a software development destination. In the EF English Proficiency Index 2022, Vietnam ranked 7th in Asia and 60th globally. This level of English proficiency, combined with the ability to adapt to diverse business cultures, facilitates effective communication and collaboration with international clients and partners.
In addition, Vietnamese developers’ competency is highly regarded globally, consistently ranking among the top developers worldwide, making the Top 10 in World Rank of Best Developers Survey. In the 2022 Global Software Outsourcing Trends and Rates Guide by Accelerance, Vietnam was listed as one of the leading software outsourcing destinations in Southeast Asia, solidifying its position as a top choice for businesses seeking software development services.
Leveraging our exceptional talent pool and advanced experience in setting up software development centres, our APAC Team has successfully established the Software Development Centre for CIMB Thai in Hanoi, Vietnam in less than 6 months. The Vietnam team kickstarted with 30+ extraordinarily talented engineers, who collaborate closely with CIMB’s engineering teams in Thailand, to implement new features to the CIMB Thai mobile banking application and other digital touchpoints.
Competitive Labor Costs
The cost of hiring skilled software developers in Vietnam remains very competitive. According to a 2022 report by Accelerance, software development rates in Vietnam are approximately 30-60% lower than in Australia, the United States, and Western Europe. This cost advantage allows businesses to optimize their budgets while maintaining quality outputs and maximizing their return on investment.
Time Zone Advantage & Cultural Compatibility
Vietnam’s strategic location within the APAC region offers distinct advantages for businesses. Its GMT+7 time zone aligns well with major global business centres, enabling real-time communication and agile project management around the clock. Explore how our Vietnam development team works closely with the engineering and product teams in Australia, Europe and the U.S. to immediately react to end-user feedback for Viator, a Tripadvisor company.
With its emphasis on hard work, loyalty, and dedication, Vietnamese culture aligns ideally with the expectations of remote software development teams. According to a study of Southeast Asia’s ‘Big Five’ personality traits, Vietnamese individuals are known for being extremely hardworking, dutiful, and responsible at work. These cultural values contribute to the development of a positive work ethic and strong team dynamics, both of which are crucial for successful remote collaboration.
Loyalty and dedication foster a sense of stability and continuity among software development teams, resulting in increased productivity, knowledge sharing, and the formation of solid professional connections. This cultural foundation, combined with the technical talents and competence of Vietnamese developers, makes them highly valuable assets for firms seeking reliable and dedicated team members for remote software development.
Promising Government Support & Opportunities for Wholly Foreign-Owned Enterprises (WFOEs)
Vietnam’s government actively supports the software development industry and fosters digital transformation through a wide range of initiatives. These include tax incentives (with preferential rates for 15 years), streamlined procedures, and investment protection for foreign companies, all aimed at creating a favorable business environment. The government has set ambitious goals for Vietnam, aiming to rank among the top three ASEAN countries and the top 60 worldwide in the World Bank’s business environment category by 2030. The “Made in Vietnam” initiative, launched in 2019, has seen remarkable growth, with the ICT industry’s total revenue reaching $148 billion in 2022, marking an 8.8% year-on-year increase.
Moreover, Vietnam warmly welcomes the establishment of Wholly Foreign-Owned Enterprises (WFOEs) by international businesses. The registration process for WFOEs has been streamlined, significantly reducing the average setup time to as short as 20 days. Notably, most industries do not have minimum capital requirements, further enhancing the ease of entry for investors.
Political Stability & Effective Pandemic Management
Vietnam stands out as one of the more politically stable countries in the region, featuring a one-party state system. Moreover, the country has demonstrated remarkable resilience in managing and recovering from the COVID-19 pandemic. These factors contribute to a conducive environment for businesses, providing stability and confidence in the face of challenging circumstances.
In summary, Vietnam’s software development industry is experiencing remarkable growth and positioning itself as a leading contender in the global software product engineering market. If your business aims to enhance its engineering capabilities and stay at the forefront of the digital transformation wave, Vietnam should be a top consideration. By establishing expert remote engineering teams in Vietnam, you can expect impressive returns on your investment.
We are Here to Help
As a trusted technology partner with over 20 years of experience in the APAC region and specifically Vietnam, we pride ourselves on our ability to offer best-in-class software development services to help you hasten your digital transformation. Our core services in APAC:
Software Product Engineering: We combine agile methodologies, advanced technology, collaborative tools, and multidisciplinary teams to develop web, mobile, and enterprise apps for our clients worldwide.
Build Operate Transfer (BOT) Model: We scale custom software and product development centres in Vietnam on behalf of our clients. We set up the infrastructure, provide the engineering resources, integrate your company culture, and most importantly, share our experience in the local market!
Whether you are looking to accelerate your digital transformation or drive innovation in your industry, we have the expertise and experience you need. Contact us for more information about our APAC expert software development teams!
