Vietnam has proven to be a solid marketplace for quality outsourcing. With a population of 90 million, 65 percent are young, technically skilled and under 35. Vietnam has emerged as one of the fastest-growing economies in the world. To outsource or offshore in Vietnam is one of the most cost-effective options available to multi-national companies and also small businesses, mainly due to low labour costs which equate to almost 90% less for a US or UK employee for example. All this along with huge reductions in business costs make the new Asian tiger a most attractive destination.
Low cost highly skilled workforce.
Vietnam has proven to be a solid marketplace for quality outsourcing. With a population of 90 million, 65 percent are young, technically skilled and under 35. Vietnam has emerged as one of the fastest-growing economies in the world. To outsource or offshore in Vietnam is one of the most cost-effective options available to multi-national companies and also small businesses, mainly due to low labour costs which equate to almost 90% less for a US or UK employee for example. All this along with huge reductions in business costs make the new Asian tiger a most attractive destination.
Low attrition rates.
Many IT related companies in Vietnam pay over the average Vietnamese wage for their workers, which, as previously mentioned, is still very low in comparison with their western counterparts. As a result, these companies find they can maintain low attrition rates as the employees tend to be very loyal and focused on the job at hand. With attrition rates in the 8-9 percent range while other outsourcing destinations like India and the Philippines are facing attrition rates in the 40-50 percent range Vietnam is a much more viable proposition. Big savings can be made on the cost of recruitment and lost time due to the induction of the new staff member.
Tax incentives.
In Vietnam corporate income tax has been steadily reduced from 25% to 20% over the last couple of years. The Vietnamese government have been supporting sectors such as health, education, high-tech, infrastructure and software development by giving preferential tax treatment such as tax exemption, reductions, and preferential tax rates.
Economic growth.
Prime Minister Nguyen Tan Dung announced in Vietnam's Sustainable Development Strategy for 2011-2020 "To focus on educating a workforce capable of meeting the diverse requirements of technology and development levels of sectors and professions; produce a workforce for knowledge economy development."
The government is keen to continue the country’s economic growth further and has signed a resolution of support workers with individual level income tax in the IT sector and other high-tech information technology to be lowered.
The Vietnam Law & Legal Forum magazine has reported “Vietnam is set to have one million enterprises by 2020, including large-sized and capital-intensive ones. The private sector is expected to make up 48-49 percent of the gross domestic product (GDP) and 49 percent of total investment. In addition, the total factor productivity is set to account for around 30-35 percent of GDP, and the social labour productivity is expected to increase 5 percent annually.”
Security and stability in the economy.
Vietnam has had a free market since its economy was reformed twenty years ago. Today, Vietnams’ policies encourage and welcome foreign business investment. Its laws and public policies favour business and the country is constantly strengthening its protection and enforcement of intellectual property rights.
Vietnam has proven time and time again that it is the perfect destination of offshoring and outsourcing while its rivals are constantly showing inconsistencies in delivery and expectations Vietnam improving in all areas to be the best value option in setting up your offshore operation.
Vietnam has proven time and time again that it is the perfect destination of offshoring and outsourcing while its rivals are constantly showing inconsistencies in delivery and expectations Vietnam improving in all areas to be the best value option in setting up your offshore operation.
