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.

Set Up Technology Companies in Vietnam

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

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

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.

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

How ANT Consulting Could Help Your Business?

Please click here to learn more about ANT Consulting or contact our lawyers and consultants in Vietnam for advice via email ant@antconsult.vn or call our office at +84 28 730 86 529