How to Set Up A Vietnam Offshore Software Development Center?

Developing a good, reasonably priced tech team might be difficult in the fast speed of software development. The ideal answer may be an offshore development center (ODC).

A Vietnam Offshore Development Center (ODC) is a dedicated remote development team based in Vietnam that works for a company overseas. This model allows foreign businesses to hire skilled developers in Vietnam's major cities like Hanoi, Ho Chi Minh, and Da Nang with lower costs.

To know why Vietnam is an ideal destination for setting up an ODC and how to build one in the most effective way, let’s continue to read. We break down everything businesses need to know in this blog, from the benefits, key setup steps to legal considerations, hiring models, and best practices.

Key Benefits of an Offshore Development Center in Vietnam

Viet Nam is rising as a leading destination for offshore software development with more and more ODCs thanks to a convincing mix of elements:

Cost Reduction

Setting up an ODC in Vietnam saves you much more money compared to hiring locally in Western markets or even other Asian hubs like India or China. Thanks to competitive labor rates and lower operational and living expenses, many global companies report 40–70% lower overall software development costs when working with Vietnamese teams. Also, you don’t need to care about recruitment, payroll, and office overhead if you outsource to a reliable vendor.

Seriously, you can build a full tech team in Vietnam for the price of hiring just one or two engineers in the US. In 2025, a Senior Developer in Vietnam earns between $2,500 and $4,000 per month. In contrast, a similar role in Silicon Valley costs over $15,000 per month. This big gap means you can significantly reduce development costs while maintaining high-quality software standards.

>> Read more: Offshore Software Development Rates By Country

Access to Larger Talent Pool

Vietnam has a young and growing tech workforce in many areas like AI, cloud, blockchain, and modern technologies. As of 2025, the country has over 550,000 IT professionals, with roughly 57,000 new graduates joining every year.

For English communication, Vietnam’s English proficiency is improving. In the 2025 EF English Proficiency Index, Vietnam scored 500 (Moderate Proficiency), ranking 7th in Asia.

Strategic Market 

Beyond cost and talent, an ODC in Vietnam can serve as a springboard into the Asian market. Vietnam’s strategic location in Southeast Asia and ongoing growth in tech innovation make it a strong base for regional expansion. 

Many tech companies use their Vietnam teams not just for delivery, but also for local market research, localized feature development, and customer support initiatives.

24/7 Productivity 

Vietnam’s time zone (UTC+7) creates a near-round-the-clock development cycle for Western clients. With time zone differences, while the client's local team winds down, the Vietnam ODC can continue advancing tasks. This improves speed to market and shortens development cycles.

For Asian clients, collaboration is easier as the Vietnam ODCs share nearly a full working day. Clients in countries with small time zone differences, such as Australia, benefit from both easier real-time communication and a continuous development workflow.

Government Support

The Vietnamese government actively supports the technology and  software outsourcing industry through digital transformation programs, IT education investment, and incentives for foreign businesses. Overseas businesses thus don't worry about long-term ODC operations.

For you know, under the new laws effective late 2025, high-tech projects (like software, AI, and data centers) receive tax breaks.

• Tax Holiday: You may pay 0% Corporate Income Tax (CIT) for the first 4 years of profit.

• Long-term Discount: After that, you get a 50% tax reduction for the next 9 years.

• Visas for Experts: Foreign IT experts can now get temporary residence cards valid for up to 5 years, so clients can bring senior managers to Vietnam for managing their ODCs.

Political Stability

Vietnam is one of the safest and most stable countries in Asia. In the 2025 Global Peace Index, Vietnam ranked in the Top 10 Most Peaceful Countries in Asia-Pacific.

Unlike some other outsourcing hubs, there are rarely political unrest or strikes that stop business in Vietnam. This stability reduces operational risk when building and maintaining offshore development centers over many years.

How to Set Up An Offshore Development Center in Viet Nam?

Phase 1: Research Market

Understanding the local environment is crucial before deciding to set up your ODC in Vietnam. You should make sure that Vietnam has the required knowledge for your project. Besides, check their degree of education, experience, and pay expectations.

Next, check the infrastructure. Reliable internet, data security, and IT support are key to running your ODC smoothly. Make sure the country you choose has everything your team needs to work efficiently.

Finally, research the business environment. Look into government regulations, tax benefits, and economic stability to see how easy it will be to operate in Vietnam. A clear understanding of local policies can save you from unnecessary roadblocks.

In fact, Vietnam is politically stable, has strong economic growth, and offers government support for IT investment, including tax incentives. Vietnam generally allows 100% foreign ownership in the IT sector and has business-friendly policies for tech firms​

Phase 2: Choose a Location

Vietnam has 6 centrally managed municipalities (cities) and 28 provinces. Here, I'll mention the most common destinations for building your ODC.

• Ho Chi Minh City (HCMC) is the largest commercial hub with the biggest IT talent pool. There are many global tech companies and IT outsourcing firms. It ranks among the top 100 cities worldwide in fintech, edtech, e-commerce, and transportation. Although salaries and office rents are higher, it offers the most convenience and business opportunities.

• Hanoi is the capital and second in foreign investment flows. It has strong R&D centers backed by government and top universities supplying steady tech talent. Although the work culture here is more traditional, but still flexible enough to meet different customer needs.

• Da Nang is a rising tech hub with 10–20% lower salaries and less employee turnover due to lower competition compared to the 2 first. This city has better quality of living, less living expenses, and a cleaner surroundings.

• Can Tho, Hai Phong, and Nha Trang are smaller cities you can consider. They have smaller IT communities but are considered by some companies for cost-saving opportunities.

Phase 3: Choose an ODC Model

Fully owned ODC, Managed ODC, and Build-Operate-Transfer ODC are the 3 key models for operating an ODC in Vietnam:

Phase 4: Legal and Regulatory Compliance

As a foreign business operating in another nation, you always have to follow its legal and regulatory system. You have to register your company, follow labor and tax laws, and of course, gain from government incentives.

Whether you decide to totally outsource your ODC to a service provider or set up your ODC yourself, knowing legal and compliance rules is absolutely essential to operate seamlessly and avoid penalty.

Business registration:

Most foreign companies set up a 100% foreign-owned enterprise (LLC) in Vietnam. The process includes:

• Getting an Investment Registration Certificate.
  
• Applying for an Enterprise Registration Certificate from the Department of Planning and Investment.
  
• Having a registered local address and at least one resident director as a legal representative.

Software and IT businesses have no minimum capital need, and the process follows standard timelines. But, working with a local lawyer or business consultant will help you avoid delays and compliance problems. Otherwise, your business will also need to apply for any required sector-specific licenses and a tax code once registered.

Handle tax and payroll obligations:

Vietnam’s Corporate Income Tax (CIT) is 20%. However, if qualified, IT companies may also be eligible for tax holidays and lower CIT rates. Employees' Personal Income Tax (PIT) withholding, social insurance (17.5%), health insurance (3%), and unemployment insurance (1%), which are all calculated based on salary, must also be handled by employers.

Labor laws:

Vietnam’s labor laws require written employment contracts for any job lasting over a month. Also consider other factors like working hours (max 48 hours per week), overtime limits (up to 200 hours/year) and mandatory benefits.

If you plan to bring foreign managers or specialists to your ODC, make sure to secure the appropriate work permits and visas.

Phase 5: Finding an ODC Partner

As I said, running an ODC on your own is still possible, but working with an ODC service provider can streamline and speed up the process. Of course, you have to choose the right partner. Consider the factors below:

• Expertise in your industry and a proven track record in setting up and managing ODCs.
• Experience in hiring, handling IT teams, infrastructure, and compliance.
• A strong understanding of Vietnam’s IT landscape and regulations is also crucial.
• Flexible and adaptable in different working styles and cultures.
• Transparent and open communication
• Reasonable service pricing.

>> Read more: A Complete Guide to Hire an Offshore Development Team

Phase 6: Setup Office Space and Infrastructure

Office space and infrastructure can affects your ODC operation and your team's productivity. So, try to prepare carefully. I recommend you to follow this checklist for better preparation

Office space: 

Office rental prices in Vietnam vary by city and location. Here’s a general cost range for the three main tech hubs:

• Ho Chi Minh City (HCMC): $15–$60 per m² per month
  
• Hanoi: $12–$55 per m² per month
  
• Da Nang: $8–$35 per m² per month

For a 100–150 m² office (enough for 15–30 employees), monthly rent typically ranges from $1,500 to $6,000, depending on the city and location.

Utilities:

Some other office setup costs, including:

• Electricity, water, Internet, and other utilities
  
• Furniture and office equipment (desks, chairs, meeting rooms).
  
• Computers, networking equipment, and software licenses.
  
• Office maintenance fees
  

IT infrastructure:

• Computers, hardware
  
• Secure data storage solutions to protect sensitive information.
  
• Fast communication tools (Slack, Microsoft Teams, Zoom).
  
• Efficient project management platforms (Jira, Trello, ClickUp) for tracking tasks and workflows.

Phase 7: Hiring IT Talents

You can skip this step if you contract out your ODC to a service provider. If not, you must have effective hiring processes, competitive pay, and strong staff retention policies because there is high competition for skilled coders.

You should use recruitment channels that popular in Viet Nam like VietnamWorks, ITviec, TopDev, and LinkedIn. Or, partnering with local universities can also be a great way to recruit fresh graduates, as Vietnam’s leading tech schools produce thousands of IT professionals every year.

Finally, prepare a thorough hiring process, including technical tests and interviews. This will help you in identifying applicants who speak English fluently, fit your corporate culture, and possess the skills you need.

>> Read more:

• How To Hire Quality E-commerce Web Developers?
• A Complete Guide To Successfully Hire Flutter Developers
• 5 Steps To Hire Node.js Developers Successfully
• 5 Steps To Successfully Hire A Dedicated Java Developer

Phase 8: Implement, Manage, and Scale Your ODC

Once everything is set up, the focus now is running your ODC smoothly and making it develop in the right path. To manage an offshore development team, you need strong leadership and well-defined procedures.<

Firstly, define team roles so everyone knows their responsibilities. Particularly if teams operate across time zones, use project management tools and communication channels to keep teams linked. If you’re using a Managed ODC or BOT model, you need a clear agreement on project expectations, reporting, and performance goals.

Next, maintain daily management to keep your ODC productive over time, guarantee the team remains in line with corporate goals, and help pinpoint areas needing improvement.

Security should be always a top priority. Set up data security policies, access restrictions, and frequent audits to keep private information safe. Staying updated on Vietnam’s labor laws and tax regulations will also prevent compliance issues.

As your ODC gets stable, you can extend your team by recruiting new developers. If you're using the BOT model, this is the phase where the provider gives over full control of the ODC to your organization

Challenges of Establishing an Offshore Development Center In Vietnam

Language Barrier

Although English proficiency in Vietnam is improving, it is not yet at the native level found in the Philippines or India. Developers often read and write English well but struggle a bit with speaking and listening.

Solutions:

• Hire a Project Manager (PM) or Bridge Engineer (BrSE) who is fluent in both languages

• Use written communication (Slack/Jira) for complex tasks to avoid verbal misunderstandings.

Bureaucracy and Licensing Delays

Vietnam’s legal system is stable but pretty slow. Setting up a legal entity involves a lot of paperwork and takes much time.

Solution: Hire a local legal firm or use an "Employer of Record" (EOR) service to start working immediately while waiting for your license.

Time Zone Differences

Vietnam is 11-14 hours ahead of the US. Although this time difference brings the benefit of a 24-hour development cycle, it also creates challenges for real-time collaboration. If you are in New York, your Vietnam team is sleeping during your core work hours, thus feedback loops can be slow.

Solutions:

• Schedule daily stand-up meetings at 8:00 AM or 9:00 PM (your time) to catch the overlap.

• Write detailed tickets so the team can work independently while you sleep.

Top 5 Best Vietnam Offshore Development Center Service Providers

Relia Software

Relia Software is the top choice for companies that value product quality and design as much as code. They help businesses set up and manage Offshore Development Centers (ODCs) in Vietnam that integrate well with internal processes. With over 10 years of experience building successful ODCs for global clients, their end-to-end ODC services with flexible engagement models are suitable for businesses of all sizes, especially startups and SMEs.

FPT Technology

With over 30,000 employees, FPT Software is the largest IT company in Vietnam and a giant in the global industry. As an established vendor, they have the ability to scale teams of 50-100+ engineers very quickly for massive projects. This company is often chosen by Fortune 500 companies with complex, large-scale needs. 

KMS Technology

KMS Technology is a US-based company famous for building its own successful software products, so they deeply understand the product mindset. They are famous for flexible "Build-Operate-Transfer" model where they build your team, and you can take full ownership later. KMS is a strong fit if you plan to eventually own your legal entity in Vietnam.

Saigon Technology

Saigon Technology is a Vietnam-based software development firm with strong ODC expertise and multiple development centers in Ho Chi Minh City and Da Nang. They have built over 85 dedicated offshore teams and support long-term ODC engagements with ISO-certified processes and quality standards. Choose them if you need a certified, award-winning team with established workflows.

Bestarion

Bestarion is a subsidiary of Larion, a veteran tech company with over 20 years of history. Besides standard coding services, they are unique because they also specialize in data processing and healthcare supply chain solutions. They offer a mix of Software Outsourcing (ITO) and Business Process Outsourcing (BPO), making them suitable for data-heavy companies.

Final Thoughts

Setting up an ODC in Vietnam takes careful planning and ongoing management, but the benefits are worth it. By following this guide, you’ll gain insights into the Vietnamese tech market, legal requirements, hiring strategies, and infrastructure setup, all essential to building a successful offshore team.

>>> Follow and Contact Relia Software for more information!