Vietnam is the volume-quality sweet spot of global software outsourcing. The country ranks 7th globally on the Kearney Global Services Location Index, its IT workforce has grown roughly 23% since 2021 to over 650,000 professionals, and 56.6% of Vietnamese developers now use AI tools like ChatGPT in daily workflow — one of the highest adoption rates in Southeast Asia. Senior developer rates run $40-60/hour, which lands 50-70% below US domestic pricing and 15-30% below Indian nearshore equivalents.

For US companies, Vietnam solves a specific problem: how to scale offshore capacity without either paying Singaporean or Swiss premiums or accepting the quality variability that comes with bottom-tier markets. Supply is deep, the tech stack is modern full-stack rather than locked to a single enterprise platform, and a new Personal Data Protection Law (PDPL) effective January 2026 has brought Vietnam's regulatory posture within striking distance of GDPR. This guide walks through what the Vietnamese supply market actually looks like, how it benchmarks on the indices that matter, how to price it against the alternatives, and what to verify before you sign.

Why US Companies Outsource to Vietnam

Vietnam offers a combination of cost efficiency and operational maturity that has moved it from emerging destination to strategic outsourcing software development partner. For a broader view of global options, explore our software development companies directory.

The value proposition extends beyond cost. Vietnam ranks 7th globally in the 2023 Kearney Global Services Location Index, evaluated across 78 countries on financial attractiveness, people skills, business environment, and digital readiness. The country has over 650,000 IT professionals, up from 530,000 in 2021, with 55,000-60,000 ICT graduates entering the workforce annually from over 153 universities.

Vietnam's total ICT sector generated US$158 billion in revenue in 2024 (up 13.2% year-over-year), though this is overwhelmingly hardware and electronics manufacturing. The software and IT services segment, more relevant to outsourcing buyers, reached US$2.28 billion in 2026. The country's "Make in Vietnam" policy has expanded the number of digital technology enterprises to 73,788 companies as of 2024, up 10.1% year-over-year.

As academic researcher Tran Hong Hanh of the Vietnam-Japan Institute for Human Resources Development observed: "Vietnam's offshore software outsourcing sector has competitive advantages in terms of superior and available talents, domestic rivalry, favourable supporting infrastructure and industries as well as preferential external events, government policy and vision."

Vietnam's IT outsourcing market alone is projected to reach US$1.24 billion by 2029, growing at 12.23% CAGR.

Pros and Cons of Working with Vietnam Software Companies

Vietnamese software companies present a distinct set of trade-offs for US buyers. The following comparison outlines the key advantages and challenges.

Vietnam is best suited for US companies prioritizing cost optimization without sacrificing technical capability. The combination of mature vendors (like TMA Solutions with 28 years of experience), a tech-forward workforce (56.6% AI adoption), and growing export relationships makes it effective for enterprises seeking scale at competitive rates.

What Vietnamese Software Firms Actually Look Like

Across Vietnamese firms serving international clients, the supply side is deep, modern, and tech-agnostic. Vendors routinely staff full-stack custom engineering engagements across enterprise, mid-market, and SMB buyers, with service portfolios that span broader territory than any premium Asian alternative. For US buyers, Vietnam functions as a scale-first value market: the depth exists to handle multi-year engagements, and the tech stack is not locked to a single vendor platform.

Service Mix. Custom software development dominates vendor portfolios decisively, followed closely by mobile development, AI development, ERP consulting, and e-commerce. Automation, web, CRM, integration, IT consulting, UX/UI, and DevOps services all appear broadly across the market. Blockchain and IoT appear frequently across vendor portfolios. The mix is weighted toward engineering breadth rather than platform specialization — a distinct signature from Singapore's enterprise SaaS tilt or Switzerland's Oracle ERP concentration.

Tech Specialization. Vietnamese firms over-index on modern full-stack frameworks rather than any single vendor ecosystem. Microsoft Power Platform, Flask, NestJS, Spring Boot, Django, Vue.js, and Angular all appear at noticeably higher rates than in most outsourcing markets. Salesforce and Oracle ERP are also present, but at lower relative concentration. That profile tracks with Vietnam's broad training pipeline — 650,000+ IT professionals, 60,000 annual ICT graduates — and the 56.6% developer AI-tool adoption rate. Vietnam operates as a generalist engineering market with AI-augmented delivery across platforms.

Client Focus. Vietnamese vendor portfolios are among the most client-diversified of any major outsourcing destination. SMB engagements appear in the large majority of vendor portfolios, mid-market work is nearly as common, and enterprise engagements are supported across most vendors. Startup work is comparatively uncommon but not absent. This means the same vendor may plausibly handle a $50K SMB build and a multi-million-dollar enterprise program — specialization is achieved by picking the right firm within a deep pool, not by country-level positioning alone.

Maturity. The Vietnamese supply base leans young but not greenfield. Median founding year sits in the mid-2010s, with a meaningful share launched since 2020 and a small minority carrying pre-2010 track records. Buyers get a mix of newer firms built around cloud-native and AI-first delivery alongside established scale players like TMA Solutions (28 years), FPT Software, and KMS Technology that anchor enterprise-grade engagements.

Vietnam on International Benchmarks

The country-level fundamentals behind Vietnam's positioning read as a mid-tier emerging market scorecard. Innovation capacity and governance integrity both trail premium Asian alternatives, but both lenses edge India — Vietnam's nearest offshore competitor — where it matters most for US buyers. Across the four indices that matter most for vendor risk, Vietnam shows a clear edge over India on communication and governance, and a clear gap versus Singapore-tier alternatives.

:::table layout="wide"

Index	Vietnam	India	Singapore	Poland	United States
Global Innovation Index 2025 (WIPO, 139 economies)	Rank 44 (37.1)	Rank 38 (38.2)	Rank 5 (59.9)	Rank 39 (37.7)	Rank 3 (61.7)
Corruption Perceptions Index 2025 (Transparency Int'l, higher = cleaner)	Rank 81 (41)	Rank 91 (39)	Rank 3 (84)	Rank 52 (53)	Rank 29 (64)
Global Cybersecurity Index 2024 (ITU, 5 tiers)	Tier 1: Role-modelling	Tier 1: Role-modelling	Tier 1	Tier 2: Advancing	Tier 1
EF English Proficiency Index 2025 (EF, 123 countries)	Rank 64 Moderate (500)	Rank 74 Low (484)	Native-English	Rank 15 Very High	Native
:::

Sources: WIPO Global Innovation Index, Transparency International CPI, ITU Global Cybersecurity Index, EF English Proficiency Index.

The read for US buyers: Vietnam's strongest lens is English proficiency (Moderate, a full tier above India's Low), and its weakest lens is innovation capacity, where India still leads Vietnam on GII. On governance, Vietnam edges India on CPI. On cybersecurity, both countries are Tier 1 Role-modelling on the ITU GCI — a notable posture for a market often perceived as still-maturing. The practical implication: Vietnam delivers lower day-to-day communication friction than India and comparable cybersecurity posture, at the cost of a somewhat thinner innovation-research base.

Cultural Differences to Expect

Working with Vietnamese software companies requires understanding several cultural dynamics that affect day-to-day collaboration. For tips on managing remote teams across time zones, see our guide on managing remote development teams.

Communication Style: Vietnamese business communication tends toward indirectness, particularly when delivering bad news or challenging client requests. Questions may be framed as suggestions rather than direct criticism. US project managers should learn to read between the lines and create safe spaces for honest feedback. Building rapport through relationship-building conversations before diving into task discussions is valued.

Hierarchy and Authority: Vietnamese workplace culture respects formal hierarchy more than typical US tech environments. Technical leads and senior engineers carry significant authority, and decisions often flow from the top. Junior team members may hesitate to flag issues directly to client stakeholders without going through their manager first. Expect more formal meeting structures and written approval processes.

Time and Deadlines: Vietnamese teams generally take commitments seriously, but attitudes toward flexibility differ from US norms. "Yes" often means "I understand" rather than "it will be done." Always confirm understanding through written specifications and build buffer time into project timelines. The concept of "face" means missed deadlines are uncomfortable to discuss—proactive check-ins help surface issues early.

English Proficiency: 75% of Vietnam's IT professionals are proficient in English, dramatically higher than most competing outsourcing markets. Written English is generally stronger than spoken English, and conference calls may require more patience than domestic meetings.

Working Hours: Standard working hours are Monday through Friday, 8:00 AM to 5:00 PM Vietnam Time (ICT). This translates to evening hours for US East Coast (8 PM - 5 AM ET) and afternoon/evening for West Coast (5 PM - 2 AM PT). The optimal overlap window is 7:00 AM - 10:00 AM Vietnam Time, which is 4:00 PM - 7:00 PM Pacific and 7:00 PM - 10:00 PM Eastern. How much time zone overlap actually matters depends on whether your delivery model is synchronous or async-first.

Developer Rates and Cost Comparison

Vietnam offers substantial cost advantages compared to US domestic hiring while maintaining quality standards suitable for enterprise development. For a broader view of how rates compare across regions globally, see our software outsourcing cost benchmarks. The US Bureau of Labor Statistics puts the median US software developer salary at $133,080/yr ($64/hr), with fully loaded costs (benefits, taxes, equipment) reaching $162,000-$250,000 annually depending on seniority.

:::table layout="comparison"

Level	Vietnam (Hourly)	US (Hourly)	India (Hourly)	Philippines (Hourly)
Junior Developer	$15-25	$50-75	$20-35	$15-25
Mid-Level Developer	$25-40	$75-120	$35-50	$25-35
Senior Developer	$40-60	$120-175	$50-75	$35-50
Lead/Architect	$60-90	$150-250	$75-100	$50-70
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Sources: BeeTechSoft rate card, Savvycom Clutch profile ($25-49/hr), ITviec Vietnam IT Salary Report 2025-2026.

US companies typically achieve 50-70% cost savings compared to equivalent domestic hiring. Vietnam rates also run roughly 15-30% cheaper than India for comparable skill levels, though India offers a deeper talent pool.

Hidden Costs to Consider:

• Management overhead: Dedicated US-side project management (10-15% of budget)
• Communication tools: Zoom, Slack, Jira subscriptions
• Time zone coordination: Potential travel costs for quarterly on-site visits
• Contractor taxes: If hiring individuals directly, withholding requirements apply
• Onboarding time: 2-4 weeks ramp-up period for first-time engagements

Legal, IP, and Data Privacy

Vietnam's legal framework for data protection and intellectual property has undergone major reforms in 2025-2026. US companies should understand three overlapping legislative changes now in effect and ensure vendor contracts include a properly scoped data processing agreement.

Data Privacy. Vietnam's original Personal Data Protection Decree (Decree 13/2023) has been superseded by the Personal Data Protection Law (PDPL, Law 91/2025), effective January 1, 2026. The PDPL is significantly stricter: all entities processing personal data must designate a Data Protection Officer, penalties reach up to 5% of annual revenue for cross-border transfer violations, and mandatory Cross-Border Transfer Impact Assessments must be filed with the Ministry of Public Security within 60 days. Unlike GDPR, Vietnam offers no adequacy decisions, standard contractual clauses, or binding corporate rules as transfer mechanisms.

Separately, the Cybersecurity Law and Decree 53/2022 require companies to store personal data of Vietnamese users locally for a minimum of 24 months, and foreign service providers may be required to establish a branch office in Vietnam.

IP Protection. Vietnam is a WTO member, TRIPS signatory, and party to the Berne Convention, CPTPP, and EVFTA. Copyright protection is automatic upon creation. A 2022 amendment to the IP Law was the most extensive reform since 2005, and specialized IP courts opened in Hanoi and Ho Chi Minh City in January 2025. However, Vietnam remains on the USTR Watch List (2025), with concerns around weak criminal enforcement and online piracy. US companies should:

• Register copyrights and trademarks in Vietnam (don't rely on automatic protection alone)
• Include explicit IP ownership clauses in contracts (work-for-hire provisions)
• Limit access to proprietary source code through contractual confidentiality agreements
• Consider escrow arrangements for critical intellectual property

Bilateral Agreements. In October 2025, the US and Vietnam signed a Framework for Reciprocal, Fair, and Balanced Trade, updating the original 2001 BTA. The framework includes digital trade provisions and continued IP enforcement negotiations. US companies can pursue arbitration through international bodies (ICC, SIAC) specified in contracts.

Financial sector maturity. 95% of local banks operate digital systems, and the IFC reports over 70% of Vietnamese adults now hold a financial account, indicating mature domestic fintech infrastructure relevant to outsourcing engagements involving financial data.

How to Choose a Software Company in Vietnam

With 285 IT services companies listed on Clutch.co alone—including 15 "Leaders" and 15 "Contenders"—selecting the right partner requires systematic evaluation. For a general framework, see our guide on how to choose software development company.

Step 1: Define Your Project Scope

Match company size to project complexity:

• Small projects (<$50K): Boutique agencies or freelancers ($25-50/hr)
• Mid-market ($50K-500K): Specialized mid-tier firms like Saigon Technology or TECHVIFY ($50-100/hr)
• Enterprise ($500K+): Large players like TMA Solutions or FPT Software ($100-200+/hr)

Step 2: Verify Core Criteria

:::table layout="comparison"

Criterion	What to Look For
Technical Capability	Relevant tech stack, R&D investment (look for 30%+ allocation like TECHVIFY), methodology (agile/DevOps)
Capacity & Scale	Employee count, ability to scale team up/down per project needs
Track Record	Years in market, client references, case studies in your industry
Geographic Fit	Overseas office presence for easier coordination (6+ countries for TMA Solutions)
Pricing Structure	Hourly vs. fixed bid, transparency in breakdown
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Step 3: Red Flags to Watch

• No verifiable client references or case studies
• Reluctance to provide trial projects or proof-of-concept
• Vague responses about IP ownership and data security
• Communication delays exceeding 24 hours during sales process
• Rates significantly below market average (indicates quality issues)

Step 4: Vetting Process

1. Request 3-5 client references (preferably in your industry)
2. Conduct technical interview with proposed team leads
3. Request sample code or architecture documentation
4. Verify company registration and financial stability
5. Review contract terms for IP ownership, confidentiality, and exit clauses

Formalize requirements with a well-scoped software RFP before committing to a specific vendor.

:::conclusion Vietnam is the volume-quality sweet spot of global software outsourcing, and the case for sourcing there is specific rather than generic:

• Scale and value together. Senior developers at $40-60/hour deliver 50-70% savings against US domestic and 15-30% against Indian nearshore, backed by a 650,000+ IT workforce and 60,000 new ICT graduates annually. Kearney ranks Vietnam 7th globally on the GSLI.
• Supply side is broad and tech-agnostic. Vietnamese firms cover custom software, mobile, AI development, ERP, e-commerce, and blockchain at high concentration. Modern full-stack tech (Python, Node, Java, Vue, Angular) dominates over any single enterprise platform.
• English proficiency outperforms India. 75% of Vietnamese IT professionals are fluent, and the country ranks EF EPI Moderate (rank 64) versus India's Low (rank 74). That translates to measurably lower communication friction on day-to-day delivery.
• PDPL 2026 is a new compliance layer. Law 91/2025 (effective January 2026) imposes mandatory DPO designation, penalties up to 5% of annual revenue for cross-border transfer violations, and mandatory Cross-Border Transfer Impact Assessments filed within 60 days. Treat it with the same rigor as GDPR — no adequacy decision exists between Vietnam and Western jurisdictions.
• Time zone is the binding constraint for East Coast teams. Vietnam operates UTC+7, giving West Coast teams 3-4 hours of workable evening overlap but very limited synchronous overlap for East Coast. Budget for async-first delivery or dedicated US-side project management.

The decision rule: if your project needs scale at competitive rates with modern tech delivery and can operate async-first across time zones, Vietnam earns the work. For projects requiring strict real-time US overlap, native-English communication, or top-tier governance posture, Singapore or nearshore CEE deliver better fit. :::