Vietnam - The Ideal Destination for Your Global Delivery Center

As global businesses seek cost-effective ways to scale, Vietnam has emerged as one of the top locations for Global Delivery Centers (GDCs). With a booming IT industry, skilled talent pool, and a supportive business environment, Vietnam offers comprehensive solutions for successful GDC operations. This article highlights the key advantages of setting up a GDC in Vietnam and how these factors contribute to successful business expansion.

The Benefits of Choosing Vietnam as a GDC Location

IT Talent Pool

Vietnam's rise as a top choice for GDC location results from several key factors that make it highly attractive for businesses seeking both efficiency and scalability in their operations. Vietnam boasts a rapidly growing IT industry, projected to reach $25 billion in market value by 2025. The country's strong emphasis on STEM education has created a vast talent pool, with more than 80,000 new IT graduates entering the workforce annually.

Cost - Effective

Another key advantage is cost-efficiency. Vietnam’s annual GDP per capita stands at $4,636 in 2024, which is notably lower compared to many other countries. This disparity underscores the cost advantage of outsourcing IT to Vietnam, where offshore software development rates typically range from $20 to $40 per hour. Besides, the Vietnamese government has made a great effort to make the nation more accessible, more transparent and more liberal for foreign businesses and investors.

Vietnam also offers significantly lower operational costs than many of its Asian counterparts, such as India and China. Salary levels for developers and engineers are 30-50% lower, providing cost-saving opportunities without compromising on quality. For instance, the average salary of a software developer in Vietnam is around $20,000 annually, compared to $50,000 in Singapore. 

The cost-effectiveness of Vietnam extends beyond just labor. With low real estate prices, energy costs, and reduced setup expenses in tech zones, businesses can maximize their ROI. Moreover, Vietnam’s fast-growing digital economy, which is projected to reach $43 billion by 2025, provides businesses with the opportunity to scale efficiently without the exponential cost increase seen in more saturated markets.

Vietnamese Government Support 

Vietnam offers a stable political and legal environment with a range of policies and incentives designed to attract foreign investment and support the development of the ICT industry. Key initiatives include tax incentives for IT firms, the National Digital Transformation Program (2025-2030), which focuses on digitizing government services, fostering digital enterprises and building a strong digital economy. Additionally, the government provides support for R&D in high-tech sectors, encouraging innovation and technological advancement. 

These efforts are further supported by Vietnam's collaboration with many countries that have established technology partnerships. For instance, Vietnam's cooperation with Japan has led to the development of R&D centers and the transfer of advanced technologies in robotics and automation. Similarly, South Korean companies like Samsung and LG have benefited from preferential tax policies and investment incentives to build large-scale tech manufacturing facilities in Vietnam.

As a result, Vietnam now ranks third in the region for attracting foreign investment, trailing only behind Indonesia and Singapore. The World Bank predicts a growth rate of 6.5% in both 2025 and 2026, positioning Vietnam as a potential frontrunner for the fastest-growing economy in ASEAN. The continued focus on fostering international tech partnerships and encouraging foreign direct investment ensures that Vietnam remains a key player in the global ICT landscape.

Strategic Location

For companies looking to leverage Vietnam as a GDC hub, it's important to also consider its strategic location in Southeast Asia, which allows businesses to serve regional markets efficiently. The country’s political stability, improved English proficiency, and favorable time zone (GMT +7) further enhance its appeal as a top-tier outsourcing destination.

Key Considerations for Setting Up a GDC in Vietnam

When foreign companies consider utilizing Global Delivery Center (GDC) services in Vietnam, several key factors must be taken into account. These considerations highlight both the strengths of Vietnam as a destination for GDCs and the aspects that companies need to be mindful of to ensure successful operations.

Location Selection

Choosing the right location is vital for optimizing GDC services in Vietnam. The country offers several tech hubs, each presenting unique advantages:

• Ho Chi Minh City: Renowned for its substantial pool of experienced developers and close proximity to multinational corporations, this city facilitates effective collaboration and business expansion.
• Hanoi: Home to many prestigious universities and research centers, Hanoi offers a highly skilled workforce, particularly in IT and engineering sectors.
• Da Nang: This emerging tech city boasts lower living costs and a growing technology ecosystem, making it a cost-effective choice for companies looking to set up GDC operations.

Time Zone, Language, and Communication

• Time Zone: Operating in Vietnam’s time zone (UTC+7) allows foreign companies to maintain favorable overlap with various markets in Asia and Europe, enhancing real-time collaboration.
• Language: While English is commonly used in the tech industry, companies focusing on specific markets, such as Japan or Korea, can incorporate local language expertise to facilitate effective client interactions.
• Communication Channels: Establishing clear communication protocols is essential for successful GDC operations. Utilizing collaboration tools like Slack or Microsoft Teams can help bridge the gap between local teams and their global counterparts.

Regulatory Compliance and Tax Incentives

Vietnam offers a conducive business environment with several tax incentives for foreign IT companies:

• Corporate Tax: High-tech enterprises can benefit from significantly reduced corporate tax rates, as low as 10%.
• Tech Zones and Parks: Certain areas, such as high-tech parks, provide exemptions from import duties on IT equipment, further lowering setup costs. Foreign companies should engage local legal and financial advisors to navigate Vietnam’s regulatory landscape and ensure compliance.

IT Infrastructure and Security

• IT Setup: Establishing a strong IT infrastructure is crucial for effective GDC operations. This includes investing in secure data centers, reliable internet connectivity, and access to cloud services.
• Security Protocols: With growing concerns around data privacy and cybersecurity, foreign companies must prioritize implementing robust security measures to protect sensitive information. Collaborating with local IT service providers can help ensure compliance with international security standards.

Cultural Integration and Workforce Management

Vietnam’s workforce is one of its greatest assets, but understanding local cultural nuances is critical:

• Cultural Differences: Vietnamese employees place a high value on clear communication and respect for hierarchical structures. Foreign companies should invest in cross-cultural training to foster positive relationships between local and global teams.
• Talent Recruitment: Developing strong partnerships with local universities and vocational training centers can help build a sustainable talent pipeline. Companies can also leverage government initiatives that promote IT education to access well-trained professionals.

Scalability and Long-Term Growth

Vietnam's tech industry is experiencing impressive growth, with a compound annual growth rate (CAGR) of 10%. Foreign companies should consider the long-term scalability of their GDC operations. By investing in Vietnam now, businesses can position themselves for future expansion and capitalize on the ongoing evolution of the country's tech ecosystem.

In conclusion, foreign companies utilizing GDC services in Vietnam must carefully consider factors such as location, communication strategies, regulatory compliance, and cultural integration. By recognizing and leveraging the strengths of Vietnam while addressing these key considerations, businesses can successfully establish and maintain a thriving GDC operation in this dynamic market.

Leveraging Vietnam's Skilled Workforce for Software Development

Vietnam’s software development sector is driven by a highly skilled and increasingly globalized workforce. With an average age of 30, the country’s labor force is both youthful and adaptable to new technologies and methodologies. According to the Vietnam Software and IT Services Association (VINASA), the IT sector employs over 1.5 million people, including 80,000 new graduates annually from top universities such as Hanoi University of Science and Technology and Ho Chi Minh City University of Technology.

The proficiency of Vietnamese developers in programming languages such as Java, Python, C++, and PHP, as well as their growing expertise in newer technologies like AI, blockchain, and cloud computing, makes Vietnam a go-to location for software development projects. What sets Vietnamese developers apart is their ability to quickly adapt to Agile and Scrum frameworks, which are increasingly in demand globally.

Moreover, the Vietnamese government actively supports the development of the IT sector through initiatives like the National Innovation Center and by partnering with tech giants such as Google and Microsoft to enhance digital skills. For instance, the "Vietnam Digital Skills for All" initiative, in partnership with Google, has trained over 500,000 people in advanced IT skills.

The high literacy rate, coupled with an increasing number of English-speaking professionals, means that communication barriers are low, making it easier for international companies to collaborate seamlessly with local teams. The English level of Vietnamese developers was ranked 13th in Asia and 65th globally according to the EF Education First English Proficiency Index.  Furthermore, Vietnam’s developers often have experience working with multinational clients, ensuring they can meet international standards for software development and project management.

Building Scalable and Efficient Software Solutions with GDCs

Flexible Contracts and Resource Management

One of the key elements of scalability in a GDC lies in the ability to adjust team size and project scope based on business needs. Vietnamese GDCs offer flexible contract options, allowing companies to easily scale their operations:

• Flexible Contract Models: Companies can choose from different contract types, such as time-and-materials or dedicated teams, which allow for adjustments in workload and resources as project requirements evolve. This flexibility ensures that businesses can increase or decrease the size of their teams without long-term commitments.
• Scalable Team Expansion: Vietnamese GDCs make it easy to hire additional developers, testers, and project managers as needed, ensuring that businesses can meet tight deadlines or handle growing project scopes. The market's rich talent pool and the availability of specialized professionals help companies remain agile and responsive to changing needs.
• Actual Billing Based on Resources Used: GDCs in Vietnam often follow a pay-as-you-go model, meaning businesses are billed based on the time and resources spent. This ensures cost-efficiency and avoids unnecessary expenses, making scaling more manageable.

Effective GDC Team Management

Effective management is crucial to running a successful GDC. By implementing best practices in team coordination and communication, businesses can ensure their GDC operations are smooth and scalable:

• Centralized Project Management: Managing teams across multiple locations requires a robust project management approach. Tools like Jira, Trello, or Monday.com, commonly used in Vietnam’s tech ecosystem, help ensure transparency, track progress, and coordinate team efforts efficiently.
• Clear Communication Channels: Establishing clear communication protocols, whether via Slack, Zoom or Microsoft Teams, ensures seamless collaboration between the onshore and offshore teams. Companies working with Vietnamese GDCs benefit from strong communication practices, helping to bridge any cultural or language gaps.
• Agile Methodologies: The adoption of agile development practices in Vietnam allows for continuous iteration and real-time feedback. This agility ensures that teams can quickly adapt to evolving business needs, making the GDC model more scalable and responsive.

Vietnam’s Market Strengths and Growth Potential

Vietnam has emerged as a leading destination for GDCs due to its fast-growing IT industry and government support for innovation:

• Access to Talent: With a young, tech-savvy workforce and strong education programs, Vietnam offers businesses access to highly skilled professionals. Many GDCs in Vietnam partner with local universities to create a steady pipeline of talent.
• Government Support: Vietnam's government actively promotes IT and software development through tax incentives and the development of high-tech parks in cities like Ho Chi Minh City and Da Nang. These zones provide state-of-the-art infrastructure, reliable connectivity, and reduced setup costs, making it easier for companies to establish and scale their GDCs.
• Rapid Growth of the Tech Industry: Vietnam's tech industry is growing at a compound annual growth rate (CAGR) of 10%. This growth, combined with a favorable business environment, positions Vietnam as an ideal location for long-term scalability.

In summary, building a successful GDC in Vietnam requires leveraging flexible contracts, managing teams effectively, and tapping into the strengths of the local market. By focusing on scalability and utilizing Vietnam's growing tech infrastructure, businesses can position themselves for long-term success.

MOR Software JSC: Your Trusted Partner for GDC Services

As businesses around the world increasingly look to Vietnam for their Global Delivery Center (GDC) needs, finding the right partner is essential for success. MOR Software JSC stands out as a leading provider of GDC services in Vietnam, offering unparalleled expertise and a proven track record in helping global companies set up and manage their GDC operations.

Experience Across Industries

With over a decade of experience in IT outsourcing and software development, MOR Software has worked with clients from a wide range of industries, including finance, healthcare, manufacturing, and telecommunications. This cross-industry experience allows us to understand the unique needs of each client and tailor our GDC services to meet specific business objectives.

For instance, MOR Software recently partnered with a European financial services company to establish a GDC in Vietnam that focuses on developing and maintaining critical fintech solutions. This GDC, staffed with over 100 engineers, is responsible for building scalable mobile applications and AI-driven risk management systems that handle millions of transactions per day. The project has been a resounding success, delivering cost savings of over 30% compared to the client’s previous development efforts in Europe.

Full-Service GDC Solutions

MOR Software provides end-to-end GDC solutions, from the initial planning and setup phase to the ongoing management and optimization of the center. Our services include:

• Talent Acquisition: We recruit top engineering talent from Vietnam’s leading universities and tech hubs, ensuring that your GDC is staffed with skilled professionals who can meet the demands of complex projects.
• Infrastructure Setup: We provide guidance on selecting the ideal location for your GDC, whether it's in one of Vietnam’s high-tech parks or an urban tech hub like Ho Chi Minh City or Hanoi. We also handle the setup of office space, IT infrastructure, and connectivity.
• Regulatory Compliance: Navigating Vietnam’s legal and regulatory environment can be challenging, but MOR Software simplifies the process by ensuring full compliance with local labor laws, tax regulations, and data protection standards.
• Project Management and Optimization: Our project managers work closely with your in-house team to ensure that all projects are delivered on time and within budget. We use industry-standard tools like Jira and GitLab to track progress and optimize workflows.

Skilled Workforce and Emerging Technologies

MOR Software takes pride in staying ahead of the curve when it comes to emerging technologies. Our engineers are proficient in cutting-edge technologies like artificial intelligence, machine learning, blockchain, and cloud computing. We regularly invest in upskilling our workforce, ensuring that our GDCs can handle the most advanced and innovative software development projects.

In a recent project, MOR Software established a GDC for a North American healthcare provider, focusing on AI-driven telemedicine solutions. Our team developed a scalable cloud-based platform that enables remote patient monitoring and virtual consultations, which has been adopted by healthcare providers across the U.S. and Canada.

Cost-Effectiveness and Scalability

Vietnam’s competitive labor market allows us to offer highly cost-effective solutions while maintaining top-tier quality. Whether you need a small development team or a large-scale operation, MOR Software can quickly scale your GDC to meet your business needs, providing flexible staffing and infrastructure options.

In conclusion, by partnering with MOR Software, businesses can leverage Vietnam’s potential as a leading destination for Global Delivery Centers while ensuring that their operations are managed efficiently and effectively. With a focus on innovation, scalability, and client satisfaction, MOR Software is your trusted partner for success in Vietnam.