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Vietnam IT Outsourcing: Reflections on a Decade of Software Development in a High-Tech City

Tuong Nguyen Manh
Tuong Nguyen Manh
Customer Success Manager

If you’re looking for the best in Vietnam IT Outsourcing, we offer our reflections on a decade-plus of experience with our delivery center in Hanoi high-tech city – our most competitive location.

Since Pentalog opened its offices in 2009, Vietnam has continued its streak as Asia’s fastest-growing economy, notching an enviable 7 percent growth in 2019. Hanoi, the capital and economic locomotive, licensed 235 new foreign-invested projects on Q1 2020.

IT Outsourcing in Hanoi, Vietnam’s high-tech city, gives you access to a hidden gem – Asia’s up-and-coming Silicon Valley.

Hanoi and Ho Chi Minh City have been leading the country’s digital transformation over the past decades with a young, educated workforce that attracted companies such as Intel, IBM, Samsung Display, Nokia, and Microsoft to invest in Vietnam. Therefore, Vietnam took fifth place in the 2019 A.T. Kearney Global Services Location Index.

“Vietnam had the 3rd largest increase in the business environment score, driven by a large score increase in the country infrastructure component.” – AT Kearney

 

Advantages for Vietnam IT Outsourcing:

 

Lower Labor Cost

Many companies are attracted by the labor costs with IT outsourcing companies in Vietnam. Indeed, tech services are up to 30% less expensive than in India and half the cost when compared to Eastern European countries.

In Vietnam’s case, the hourly rate is around $30 per hour while in Eastern Europe, a software developer can earn as much as $50 per hour. Only Africa can rival Asia’s labor costs; all other tech hubs in the world are significantly more expensive.

Skilled, Educated, and Loyal Employees

Vietnam is a collectivist society which values commitment to the group – be that families, friends or coworkers. This heritage fosters strong relationships where everyone takes responsibility for fellow members of the group. Employees are loyal and enjoy growth opportunities without moving from one workplace to another.

In terms of hard skills, Vietnam has over 120,000 IT specialists and more than 40,000 new ICT graduates from a total of 400,000 each year. There is a strong priority on learning to read, write and speak in English alongside of engineering skills, as evidence by the strong language skills of Pentalog’s own team.

Focus on Technical Education

Vietnam is listed in the top 10 countries worldwide with the most engineering graduates.

The first Western-style universities in Vietnam were set up in Hanoi high-tech city, as well as the largest technical university in the country – Hanoi University of Science and Technology and Vietnam National University.

Hanoi hosts over 50 universities and colleges with ICT (information and communications technology) training programs that ensure all graduates are able to meet an existing need on the global market.

Incentives for the IT Industry

In Vietnam, some prioritized industries receive preferential treatment from the government – such as corporate tax cuts and exemptions, credit incentives, and exemption or reduction in land and water surface lease fees for science and technology enterprises.

A special government policy known as the Decree 13/2019 encourages high-tech companies to relocate to Vietnam by providing access to “Scientific/Technology Enterprise Certification,” which lets businesses take advantage of the strong government incentives in Vietnam.

Specifically, tax incentives may include up to four years of tax exemptions and a 50% tax break for the following nine years. Decree 13 also outlines many credit incentives, and financial support from national science & technology development funds.

High-Tech Parks

Established in 1998, Hanoi’s Hoa Lac High-tech Park (HHTP) was Vietnam’s first high-tech park and is currently the country’s largest. While Vietnam has over 190 industrial parks and plans to increase this number, the park is one of only three national-level high-tech parks, alongside Saigon High-tech Park and Danang High-tech Park.

The HHTP was created with the intention to become Vietnam’s leading high-tech industry cluster for manufacturing, research and development, and innovation. According to the Vietnamese government, about 12,600 people live and work there and it is expected that the HHTP’s residential and professional population will reach 229,000 by 2030.

Beneficial Business Deals

Vietnam’s geographical position (GMT +7 time zone) and the city’s proximity to the border allow smooth collaboration with USA’s west coast, Europe, and China. For global companies, this position can enable a near 24-hour productivity cycle.

There are direct connecting flights with major European and US cities available throughout the day. Although travel time takes obviously longer, a maximum time difference of below 24 hours still makes it possible to set up efficient cooperation with the help of daily sync-ups and flexible working hours.

Vietnam IT outsourcing

Pentalog Vietnam has been on the market for more than a decade! Our story goes on in Hanoi high-tech city.

Pentalog’s Offshore Delivery Center

Taking into consideration all the above reasons – the growing GDP, the high level of technical talent, modern tech infrastructure, and strong work ethic – Pentalog launched an offshore delivery center in Hanoi high-tech city, in 2009.

Currently, the Hanoi center features 80 IT specialists who code in Java, PHP, Mobile technologies (Kotlin, Swift, IOS, Android), .Net, RoR, Python, ReactJS, VueJS, AngularJS and our clients are mainly from France, Switzerland, U.S., Canada, Singapore.

Pentalog’s office in Hanoi is situated in the Cau Giay business district, home to both established companies and startups. The projects we develop span areas such as e-commerce, sport, flavor and fragrances, retail, health-tech, ed-tech, security, as well as IPTV / VOD services and telecommunications.

Learn more about the range of services this location can provide.

When you select Pentalog for your Vietnam IT outsourcing project, you’ll benefit of competitive prices, total transparency and expertise from our teams, and an Agile mindset focused on growth that makes Pentalog one of the best development centers in the Asian region.

 
Read more about IT Outsourcing in Vietnam:

Hanoi vs. Ho Chi Minh: Which City is Best for Offshore Outsourcing?

Six Steps to Building a Successful Offshore Collaboration with Vietnam


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