Why Outsource To Vietnam?
Vietnam at a Glance
- Population: 90+ millions
- The 13th most populous country
- Size: 331,689 km2
- Main cities:
- Ha Noi – Capital
- Ho Chi Minh City – Business hub.
- Hue – Ancient Capital
- Da Nang – Central hub
- Can Tho – Mekong Delta hub.
- New powerhouse of Southeast Asia
- Fast economy with average GDP growth rate
- Workforce: 45+ millions.
Large Pool of Talents
- 400 universities and colleges with IT training programs (3-5 years)
- 50K IT students graduate annually.
Attractive Cost for IT Outsourcing
- Labor cost in Vietnam is very favorable compared to other outsourcing destinations. Vietnam’s salaries for both IT outsourcing and BPO are over 30% less expensive than India and 50% less expensive than Eastern Europe (source: NeoIT, 2006 and Ukrainian Hi-Tech Initiative, 2007).
- Ho Chi Minh City, where TTS located, is also reported as one of the top outsourcing cities by Global Services – Tholons from 2007 to 2012; and NeoIT, 2006. In the reports, Ho Chi Minh City is scored among the lowest cost (scored 5/5, 5 is the best score) while well rated for IT application development and software testing services.
Emerging as High Tech Center
- Intel invests 1B USD in a chip plant in Saigon High Tech Park in Ho Chi Minh City
- Samsung invests 2.2B USD. In 2013, nearly 50% of Samsung mobile phones manufactured in Vietnam.
- IDG set up 600M USD investment fund for Vietnam software industry.
- Fortune companies chosen Vietnam for their IT outsourcing services:
- IBM, Oracle, Juniper Networks, Microsoft, NEC, Panasonic, HP, CSC, Avaya, Ericsson, EA, etc.
Strong Government Support for software industry
- Intellectual Property Protection is being improved.
- Setting software parks: Saigon Software Park, Quang Trung Software City, Saigon High Tech Park, Da Nang Software Park, etc.
- Corporate income tax incentives for newly set up IT enterprises:
- Tax rate at 10% in 15 years
- Tax exemption for no more than 4 years; 50% reduction of payable tax amounts for no more than 9 subsequent years. (Law on Corporate Income Tax, No 14/2008/QA12, Article 13, 14)