6 Powerful Insights for Foreign Investors to Successfully Set Up Technology Companies in Vietnam

 

Why Vietnam is the Next Big Tech Hub

If you’re looking for the next big opportunity in the tech industry, Vietnam should be on your schedule. With its booming digital economy, government incentives, and skilled workforce, the country is quickly emerging as a major hub for technology companies in Southeast Asia.

However, the journey to set up technology companies in Vietnam is not just about choosing a location and registering a business. Foreign companies must navigate a complex regulatory landscape, secure funding, and leverage local talent to succeed.

So, how can you overcome these challenges and capitalize on Vietnam’s thriving technology sector? We will walk you through concerned matters and steps taken to set up technologies company in Vietnam successfully.

What Makes Vietnam a Hotspot for Technology Companies?

Vietnam has positioned itself as a rising star in the global tech industry, attracting foreign investors, tech startups, and multinational corporations. Here’s what makes Vietnam an ideal destination for technology businesses:

1. A Thriving Digital Economy

- Vietnam’s digital economy is expected to reach $50 billion by 2025, driven by e-commerce, fintech, and AI adoption.

- A tech-savvy population, with over 77% internet penetration and 64 million smartphone users, creates a strong market for digital services.

2. Strong Government Support

- The Vietnamese government has introduced incentives for foreign tech companies, including tax exemptions, grants, and preferential policies for high-tech industries.

- The National Digital Transformation Strategy aims to make Vietnam a global technology leader by 2030.

3. Affordable and Skilled Workforce

- Vietnam produces more than 50,000 IT graduates per year, making it one of the fastest-growing tech talent pools in Asia.

- Salaries for software engineers are significantly lower than in Singapore, the U.S., or China, offering a cost-effective advantage.

4. Increasing Foreign Investment in Tech

- Major world players have invested billions in Vietnam’s technology sector.

- Vietnam ranked third in Southeast Asia for startup investments in 2023, following Singapore and Indonesia.

Vietnam offers a fast-growing market, government-backed incentives, and an affordable talent pool, making it an ideal place to set up technology companies.

Who Should Consider Setting Up a Tech Company in Vietnam?

Vietnam’s tech-friendly environment attracts various types of foreign companies, including:

1. Tech Startups & Entrepreneurs

- If you’re launching a fintech, AI, blockchain, or e-commerce startup, Vietnam offers low operational costs and a receptive market.

2. Established Tech Companies Seeking Expansion

- Global tech firms looking to expand in ASEAN can benefit from Vietnam’s strategic location and skilled workforce.

- Many multinational companies set up R&D centers in Vietnam to leverage cost-effective software development.

3. IT Outsourcing & Software Development Firms

- Vietnam is a leading IT outsourcing destination, ranking 6th globally for software outsourcing.

- The country has thousands of skilled developers specializing in AI, cloud computing, and cybersecurity.

Whether you’re a startup, an established tech firm, or an outsourcing company, Vietnam provides a strategic and cost-effective environment.

Where Are the Best Locations to Set Up Technology Companies in Vietnam?

Choosing the right location is crucial for the success of a tech company in Vietnam. The country has several major tech hubs, each with its own advantages.

1. Ho Chi Minh City (HCMC) – The Business Powerhouse

- Vietnam’s financial and commercial capital, home to most foreign tech firms and startups, designed to support high-tech industries.

2. Hanoi – The Government & Innovation Hub

- As the political and educational center, Hanoi hosts many government-backed R&D initiatives.

- Home to universities and top technical institutions, making it ideal for hiring local talent.

3. Da Nang – The Emerging Tech Hub

- Offers a low-cost alternative with excellent digital infrastructure.

- Home to IT outsourcing companies and a growing blockchain startup scene.

In short, HCMC is best for startups, Hanoi for government-related tech firms, and Da Nang for outsourcing companies.

When Is the Right Time to Enter Vietnam’s Tech Market?

Vietnam’s tech industry is booming, and there is no better time than now to enter the market. However, timing your entry right can make a big difference.

1. Market Readiness

- The Vietnamese government is actively pushing digital transformation, with strong growth in fintech, AI, and cloud computing.

- Consumer demand for digital services is at an all-time high, especially in e-commerce, edtech, and healthtech.

2. Foreign Investment Climate

- Vietnam’s Foreign Investment Law now allows 100% foreign ownership in many tech sectors.

- Trade agreements like EVFTA (EU-Vietnam Free Trade Agreement) and CPTPP make Vietnam a strategic export hub.

The best time to enter is now, as the country is rapidly modernizing its digital economy and attracting foreign investors.

Why Foreign Tech Companies Are Choosing Vietnam Over Other ASEAN Countries

Vietnam is becoming a preferred destination for tech companies, outpacing other ASEAN nations for several reasons:

1. Lower Operational Costs Compared to Singapore & Thailand

- Vietnam’s labor costs are 50-70% lower than in Singapore while offering high-quality talent.

2. Stronger Growth Potential Than Malaysia & Indonesia

- Vietnam’s startup ecosystem is growing 39% annually, higher than most ASEAN nations.

3. Investor-Friendly Business Environment

- Government-backed tech incubators and grants provide direct support to startups.

- Vietnam is ranked among the top 5 most attractive emerging markets for investment.

Vietnam’s low costs, high growth potential, and government support give it a competitive edge over other ASEAN countries.

How to Set Up a Technology Company in Vietnam

Setting up technology companies in Vietnam requires careful planning. Here’s a step-by-step guide:

Step 1: Choose the Right Business Structure

- 100% Foreign-Owned Tech Company (Ideal for startups)

- Joint Venture with a Local Partner

Step 2: Register Your Company

- Apply for an Investment Registration Certificate (IRC)

- Obtain an Enterprise Registration Certificate (ERC)

Step 3: Secure Funding 

- Explore venture capital & government grants

Step 4: Hire Local Talent & Build a Team

- Use local job platforms or headhunters to recruit.

Step 5: Comply with Local Regulations

- Ensure compliance with data protection laws & cybersecurity regulations.

Following these steps ensures a smooth entry into Vietnam’s tech industry.

Take Advantage of Vietnam’s Growing Tech Ecosystem

Vietnam is one of the most exciting places to set up a technology company today. With low costs, government support, and a young, talented workforce, foreign companies have the opportunity to thrive in this fast-growing market.

If you’re considering setting up technology companies in Vietnam, now is the perfect time to seize the opportunity.

Research for the reputation of the company in Vietnam: Risk Management

 Risk management is a vital element when doing business but so far, not many enterprises concern about it.  

Researching a company’s reputation in Vietnam is an essential component of risk management for several reasons. In an increasingly interconnected and competitive global business landscape, understanding a company’s reputation can provide valuable insights into potential risks and help organizations make informed decisions.

Why researching a company’s reputation in Vietnam is a crucial aspect of risk management?

Risk Identification and Assessment:

A company’s reputation reflects its standing in the market and among stakeholders. Conducting research on a company’s reputation can help identify risks related to ethical concerns, legal issues, financial stability, and other factors that could impact its operations. By understanding these risks, organizations can assess their potential impact on business objectives and formulate appropriate risk mitigation strategies.

Operational Risks:

A poor reputation can lead to operational disruptions. For example, negative publicity or consumer backlash due to a company’s unethical practices or subpar products can result in decreased sales, loss of customers, and regulatory scrutiny. Evaluating a company’s reputation in Vietnam can help predict and manage such operational risks.

Financial Risks:

Reputation plays a significant role in a company’s financial health. Negative news or controversies can lead to declining stock prices, reduced market capitalization, and credit rating downgrades. By researching a company’s reputation in Vietnam, investors and stakeholders can gain insights into its financial stability and potential risks to their investments.

Legal and Regulatory Risks:

A company with a tarnished reputation may be subject to increased legal and regulatory scrutiny. Researching the company’s reputation in Vietnam can help identify potential violations, litigation risks, and compliance issues that could lead to legal consequences and financial penalties.

Supply Chain Risks:

A company’s reputation can impact its relationships with suppliers and partners. If a company is known for unethical practices or poor corporate governance, suppliers and partners might reconsider their associations, affecting the company’s supply chain stability.

Market Perception:

A positive reputation can enhance a company’s brand value and market perception. Conversely, a negative reputation can lead to decreased consumer trust, hampered growth, and reduced market share. Researching a company’s reputation in Vietnam helps gauge how it is perceived by customers, investors, employees, and the public.

Employee Relations:

A strong reputation can attract and retain quality talent. Conversely, a company with a poor reputation may struggle to recruit skilled employees and experience higher turnover rates. Understanding a company’s reputation can offer insights into its workplace culture and employee satisfaction, which are crucial for talent management and organizational success.

Crisis Preparedness:

A company with a well-established reputation management strategy is better prepared to navigate crises. By researching a company’s past actions and responses to adverse events, organizations can learn from previous experiences and develop crisis management plans that protect their reputation and minimize negative impacts.

Strategic Decision-Making:

The reputation of a company can influence strategic decisions, including mergers, acquisitions, partnerships, and market expansions. A company with a strong reputation is more likely to attract potential partners and investors, while a company with a questionable reputation may face challenges in these areas.

Stakeholder Trust:

A positive reputation builds trust with stakeholders, including customers, investors, employees, regulators, and the public. Maintaining trust is crucial for long-term business success, and reputation research helps organizations understand how they are perceived by different stakeholder groups.

Vietnam companies concerning about risks and risk management practice?

Researching the reputation of a company in Vietnam is a critical aspect of risk management. It provides insights into potential risks and helps organizations make proactive decisions to mitigate those risks. A strong reputation enhances a company’s resilience, competitiveness, and long-term sustainability in a complex and interconnected business environment.

According to a recent survey with 522 companies, there are only 43 companies, accounting for about 8%, have the independent risk management department in their business. More noteworthy, the majority of these 43 companies operating in the banking and financial sector, which has nothing new to risk management. In fact, not all banks have independent and effective risk management departments. The negative problems related to the banking system in recent times somewhat showed the picture about the risk management of this sector.

Risk is understood as any events and situations that could harmful to the ability to achieve the business objectives of the enterprise. Risk management is organized in a formal way and is conducted continuously to identify, control and report the risks that may affect the achievement of the business objectives of the enterprise.

So why businesses are not interested in risk management? Part of this problem stems from the awareness of the leaders. In order to build and operate the risk management system in the enterprise, it needs the commitment of the senior leaders. If senior leaders do not aware of this problem, the administration process will be difficult to achieve the desired effectiveness.

Recently, there are many theories and systems of risk management but small and medium enterprises should be cautious when apply because system and theory are just general and they should be adjusted when applying to each business.

In order to form the culture of risk management, the leaders must along with the employees to implement it regularly and for each project. In theory, the risk management process is carried out in 5 steps: identify risk; evaluate its impact; determine the likelihood; action and measures; monitoring and evaluation.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

About ANT Consulting and Market Entry Services in Vietnam

ANT Consulting is here to assist you from the outset; providing intelligence, information, advisory, management or support services that assist market entrance, and ensure efficient business start-up operation.

Research Service
Company Profiling and Due Diligence
Policy and Regulatory Research
Assistance in Setting-up Business Venture
M&A Origination & Execution

For legal advise, consult with ANT Lawyers

When Wealth Management service in Vietnam will start

 

Why wealth management service in Vietnam is needed now?

Wealth management service in Vietnam is essential for individuals and families seeking to effectively manage and grow their financial assets. Here are several reasons why such services are needed:

Tailored Financial Planning: Wealth management services provide personalized financial planning that takes into account an individual’s unique financial goals, risk tolerance, and investment preferences. These services help clients create comprehensive wealth management strategies that align with their long-term objectives, whether it’s wealth preservation, retirement planning, estate planning, or funding education for future generations. Wealth managers have the expertise to navigate complex financial landscapes, ensuring that clients make informed decisions and optimize their financial resources.

                       When Wealth Management service in Vietnam will start?

Diverse Investment Opportunities: Vietnam’s economy offers a range of investment opportunities, including the stock market, real estate, bonds, mutual funds, and more. Wealth managers possess in-depth knowledge of these investment avenues and can help clients identify suitable opportunities based on their risk profiles and financial goals. They conduct thorough research, monitor market trends, and provide insights into potential investment options. By leveraging wealth management services, individuals can access a diverse range of investment opportunities that align with their financial objectives.

Risk Management and Asset Protection: Wealth managers play a crucial role in mitigating risks associated with investments. They provide guidance on portfolio diversification, asset allocation, and risk management strategies to minimize potential losses. Wealth managers also stay updated on regulatory changes, economic trends, and geopolitical factors that may impact investments. Through proactive risk management, they aim to protect and preserve the wealth of their clients, ensuring a secure financial future.

Tax Planning and Optimization: Wealth management service in Vietnam encompasses comprehensive tax planning strategies. Wealth managers have a deep understanding of the tax landscape and can identify tax-efficient solutions to optimize clients’ financial positions. They help clients navigate tax regulations, utilize available tax incentives, and minimize tax liabilities. By implementing effective tax planning strategies, individuals can maximize their after-tax returns and preserve their wealth.

Estate and Legacy Planning: Wealth managers assist clients in structuring their estates and developing comprehensive succession plans. They provide guidance on wealth transfer, philanthropy, and establishing trusts to protect assets for future generations. Wealth managers work closely with clients’ legal advisors to ensure that estate planning documents align with their financial goals and comply with applicable laws and regulations. By addressing estate planning early on, individuals can secure their legacies and ensure the smooth transition of wealth.

When Wealth Management service in Vietnam will start?

The private banking market serving the super-rich is relatively new in Vietnam, although the growth rate of the rich in our country ranks third in the world. Private Banking is a specialized banking service model for customers with large assets, including asset management solutions and all financial and non-financial needs of customers such as investment, inheritance plan, residency procedure, health care, insurance.  This could be considered wealth management service in Vietnam for high net-worth individuals in Vietnam.

With the specificity of serving high net-worth individuals (HNWI) (in some Vietnam banks’ definition, those with net assets of over one million USD), the implementation and operation of Private Banking comes with many challenges.

Banks implementing Private Banking in Vietnam need to possess strong financial potential and the ability to connect to a global partner network. Moreover, the bank also has to build a team of highly specialized and experienced advisors in many fields to accompany customers in important financial decisions.

Serving the rich requires strict and thoroughness, hence Private Banking is still a relatively new playground in Vietnam, even though the growth rate of HNWIs in our country is currently 12.7% per year, ranking 3rd in the world, based on data from Wealth Report 2021.

Currently, some banks have initially provided high-end customer service products, but mainly stopped at priority service, premier service.  The motivation for the bank to start deploying Private Banking service comes from the intrinsic strength i.e. history of the brand, client base, service level…together with the global investment ecosystem in many fields and experience.

The development of international standard Private Banking service in Vietnam requires the pool of staff of highly qualified asset management directors and investment consultants, well-trained by the world’s leading consulting company, and accredited by international financial institutions i.e. Fitch accredition.

The Private banking service and its ecosystem of global partners provide a diverse product portfolio and utility system to meet the needs of financial transactions and specialized investments for HNWI customers.  In addition to specialized financial transactions, intensive investment with advice from experts, the Private Banking also offers exclusive privileges for high-class customers such as healthcare, high-class personal assistant, providing information, consulting support and connecting to use services around the world, enjoy diverse lifestyle privileges, outstanding class such as golf, lounge, quick check-in at the airport, spa, fine-dining, vacation.

Only a limited bank in Vietnam now could really claim themselves providing Private Banking service in Vietnam market, however this playground will soon join players due to its market potential and the growing of the number of HNWI in Vietnam.  It is important to promote this service so as the super rich in Vietnam would be able to access to service that meet their needs in Vietnam instead of going abroad to be served.

How professional consultants in Vietnam could help grow wealth management service in Vietnam?

In summary, wealth management service in Vietnam is crucial for individuals and families looking to navigate complex financial landscapes, optimize their investments, manage risks, minimize taxes, and secure their financial legacies. By partnering with experienced wealth managers, professional consultants in Vietnam with understanding of business and law, individuals can benefit from personalized strategies tailored to their unique circumstances, enabling them to achieve their long-term financial objectives with confidence.