Vietnam – Top Location for Offshore Software Development

Offshore software development may be a perfect option if you plan to save money and get high-quality web development or mobile app development. Why should you choose Vietnam to outsource? Hiring a dedicated software development team in Vietnam might be good. Are there any pitfalls you should know about?

So, let’s take a closer look at Vietnam in terms of its attractiveness for software development outsourcing.

• Convenient location, wide tech talent pool as well as low labor costs.
• Vietnam is among the leading countries in offshore software development service.
• Microsoft, Intel, IBM and other companies chose Vietnam as an ideal IT outsourcing destination.

In this article, we will explain all the reasons to outsource to Vietnam including business opportunities, current reputation on the IT market and well-known projects. Let’s go!

1. Why choose Vietnam for Offshore Software Development?

Today, Vietnam is top emerging Asian countries for outsourcing services with an incredibly fast pace. Therefore, innovative specialists in different industries has increased, especially tech professionals.

With a young population, the workforce with many talented IT developers, attractive labor costs, a stable environment, and low taxes, Vietnam is now a sweet place to outsource, especially in offshore software development.

Another advantages when outsourcing in Vietnam is high-tech labor resources but the cost is low. Compared to China, India is the leading Offshore country so far, the labor cost of Vietnam is also cheaper.

Read also: How to outsource software development?

1.1. Talented IT Developers

Vietnam is a country with a young population structure, currently in a period of what can be called the golden population period. The average age of Vietnam’s population is about 28.5 years old. Therefore, the resources of young engineers in Vietnam are incredibly abundant.

According to Reuters, Neil Fraser, a software engineer at Alphabet Inc’s Google said: “Vietnam has the highest-performing computer science students I’ve ever encountered.”

Another important point is that the talent pool in Vietnam is continuously growing:

• Nowadays, most of the developers belong to Millennials generation.
• At present, the number of developers in Vietnam at a young age accounts for the majority with 53.2% aged 20 – 29 years old.
• The number of senior developers over 5 years of experience accounts for about 30%.
• There is a large number of developers with only a few years of experience but having Senior/ Lead expertise.
• About 70.5% of developers said they mostly update their knowledge through tech blogs, events or social media.

Source: Vietnam IT Market Report 2020

For summary, tech talent in Vietnam are eager to work for international companies and to gain exposure the startup ecosystem. As long as you can offer an learning-friendly environment with cutting-edge technology projects, you will be able to attract young offshore developers in Vietnam to gain the experience and exposure.

1.2. Tech Education In Vietnam

The tech industry thrives on the innovation and dedication of the people who drive it forward, and Vietnam is home to thousands of talented, professional, and highly motivated individuals. Over the past few years, the country has made significant strides in developing its tech workforce, positioning itself as a strong player in the global IT landscape.

Currently, the Vietnamese government is actively investing in the tech sector, particularly through education. There are plans to further enhance the curriculum in 20 schools that are currently teaching IT, ensuring that the next generation of tech professionals is well-equipped for the demands of the industry. Each year, more than 50,000 IT students graduate from over 153 universities in Vietnam, adding to the country’s growing pool of tech talent. In global IT rankings, Vietnam shines in various categories: it ranks 29th globally in terms of skill value, 6th in top coders, and 23rd in hacker rankings. These impressive rankings reflect the high level of technical expertise found within the country.

However, while Vietnam has made remarkable progress in IT training, there is a growing recognition that tech skills alone are not enough. To truly compete on a global scale, more emphasis needs to be placed on foreign language proficiency and social interaction skills. Mastering these soft skills, alongside technical expertise, will better prepare Vietnamese developers to collaborate internationally and meet the expectations of foreign clients.

In fact, according to research by the World Economic Forum, Vietnam is one of the top 10 countries with the most engineering graduates, further solidifying its position as a hub for tech talent. In the past, language barriers posed a significant challenge for Vietnamese developers when working with international clients. However, recent efforts by the government to improve foreign language education are making a difference, allowing more Vietnamese professionals to engage in the global tech revolution, often referred to as Industry 4.0.

At AgileTech, for instance, we are doing our part to support this movement by offering a free English speaking club for our team members, where they can improve their language skills in a relaxed and supportive environment. Additionally, we regularly host knowledge-sharing seminars, where employees present on a variety of topics, fostering a culture of continuous learning and collaboration. These initiatives help ensure that our team is not only technically skilled but also well-prepared to thrive in a globalized industry. With the growing emphasis on soft skills, foreign language proficiency, and professional development, Vietnam’s tech workforce is increasingly poised to make its mark on the world stage.

1.3. Business Environment

This year, A Gartner report named Vietnam in the top 30 countries for offshore software development services. Speaking from our past outsourcing destination – India, you can find modern IT skills in Vietnam equal to and in some cases exceed what India offers.

• GDP growth: According to KPMG, the annual Gross Domestic Product (GDP) in Vietnam tripled from US$600 per person in 2005 to a favorable US$2,185 in 2016, a massive increase in just a decade.
• Government’s Resources: The Government of Vietnam has quickly caught wind with the Industry 4.0. The authority and administration has issued an initiative with the title of ‘Vietnam Silicon Valley’.
• Attractive Tax: The government provides location-based incentives, benefiting disadvantaged locations based on the companies’ levels of investment and development.
• Stable Political Climate: This is one of the great advantages when hiring an offshore software development company in Vietnam

Moreover, the rise of tech business and the increase in opportunities is driving an entrepreneurial spirit

• VNG, a gaming, media and communications focused company is rumored to have a unicorn valuation.
• MoMo, a local online wallet, raised an unprecedented $28 million from Standard Chartered and Goldman Sachs.

As Vietnam has a strong IT developer resource pool and lots of other potential conditions, many famous technology corporations are now choosing Vietnam to invest including Samsung, Hindustan Computers Limited, LG. And in the near future, Apple will also join the game.

Read also: Fintech Software Development in Vietnam

1.4. Culture & Work Ethic

China and especially India, are clearly the “outsource mecca” for the past two decades. These two countries have gone through all the challenges of software outsourcing. Currently, their biggest challenge is retaining employees because they tend to migrate to other countries to find career opportunities.

However, this is not a problem for Vietnam. Vietnam is particularly unique because of its low staff turnover rate. Here, you not only have your own family but also have a big family. Typical of Vietnamese culture is the desire to stay in the country, work locally and provide for their families. This is the difference and important advantage of outsourcing the Vietnam environment.

Moreover, Vietnamese people have always maintained a precious tradition that is a hard-working spirit. Starting from an agricultural country, diligence and no fear of difficulties have associated with Vietnamese people.

Among Asian countries, Vietnam is known for the image of people who work hard and in life. Moreover, the solidarity and mutual support of the Vietnamese people is also a precious virtue, it is the core of the teamwork spirit that is essential for the field of programming.

1.5. Price-quality Ratio

In Vietnam, hiring an offshore software developer offers highly competitive rates compared to other countries in Asia. On average, the hourly rates for a software developer in Vietnam range between $10 to $25 per hour, making it a cost-effective choice for businesses looking to outsource. In comparison, in other popular IT outsourcing hubs such as India or China, you might expect to pay between $18 to $50 per hour for the same level of work. This pricing difference gives Vietnam a clear advantage, particularly for companies looking to maximize their development budgets.

For skilled developers with around four years of experience, the monthly salary in Vietnam is roughly US $2,000. This amount is almost half the salary of an equivalent software engineer in Singapore, where the cost of living and wages are significantly higher. This wage gap, coupled with Vietnam’s growing pool of talented developers, makes it easier for businesses to attract top-tier talent without breaking the bank.

Additionally, the cost of office space or coworking spaces in Vietnam is notably low. This reduces overhead expenses for companies choosing to outsource or set up development teams in the country. These factors combined—affordable labor, low infrastructure costs, and an ever-expanding talent pool—cement Vietnam’s reputation as one of the best IT outsourcing destinations globally.

When it comes to app development, the estimated cost to build an app in Vietnam typically depends on the complexity and scope of the project. A basic app usually takes around 400 hours of development per version, and at Vietnam’s rates, the cost ranges from $4,000 to $10,000. This makes Vietnam an attractive option for businesses looking to develop apps without the high expenses associated with Western markets.

Similarly, web development costs in Vietnam are quite affordable. For example, developing a website in Vietnam starts from approximately $3,000. For a WordPress website, the cost could start from as low as a few hundred dollars, depending on customization and features. For more complex and customized websites, the cost will naturally rise, but it still remains highly competitive compared to other countries.

In summary, outsourcing IT services and development projects in Vietnam offers excellent value for money, with low wages, affordable office spaces, and a high level of skill among developers. This combination of factors makes Vietnam a top destination for both app and web development, providing cost-effective solutions without sacrificing quality.

2. Final thought

As you can see, there are a lot of different factors impact on hiring offshore software company. Of course, pricing is not always the most important aspect you should consider when deciding on a country for IT outsourcing. The answer is not “one size fits all”. Each IT outsourcing company has a different quality service and target to particular users.

There are large pool of tech talents in Vietnam are skilled at:

• Java
• JavaScript
• C++
• Kotlin
• Swift
• PHP
• Node.js
• Python
• Ruby

In summary, Vietnam is the country with all the characteristics which you should be looking for. Vietnam’s IT engineers have high concentration levels, honest, loyal and dedicated.

For these reasons, Vietnam is one of the best offshore development center to seek talented IT developers for your remote software development team.

3. About AgileTech

By providing multiple needs and services, AgileTech is here to ensure your technology project as a successful element of your omnichannel strategy. We have expert Project Managers along with excellent teams who have delivered the best products to customers in more than 10 countries, namely the U.S, U.K, Germany, France, and Singapore.

As a leading mobile development company in Vietnam, we have huge experiences in many fields including e-commerce, car-sharing platform, health care, Livestream and many more. Our dedicated software development team is ready for your custom requirements. You can contact us at contact@agiletech.vn or via (+84) 936 281 059 for more information.