Many entrepreneurs locate their development team here in Vietnam, along with other key functions needed by their tech startups. Your tech startup can launch by hiring team members and registering a company (if needed). In addition to defining and testing a business model, new tech startups in Vietnam will need to consider labour costs, the availability of talent, office costs and administrative issue such as tax and business licensing.
Read on for more about tech startups in Vietnam!
The Exciting World of Startups
Facebook, Netflix, Spotify, AirBnB, Uber, Dropbox, MailChimp, Basecamp and Canva are all startups that have become household names. From humble beginnings, they’ve each pioneered new business models, disrupted entire industries and created enormous wealth for owners and investors.
The next generation of startups are focused on many ideas. Startups exist in a whole range of industries, including ecommerce, fintech, edtech, traveltech, healthcare, transport and logistics, media and adtech, bio and foodtech, IoT, AI, blockchain and many others. Virtually every industry has opportunities!
Of course, startups take many forms. Some startups are built for hyper-growth, while others are intended as lifestyle businesses or for quick sale at an early stage. Others are simply offshoring an activity or function from a high cost country.
As a result, there is an almost infinite scope for discussion when it comes to startups. Many startups have been shaped by the ideas laid out by The Lean Startup, Zero to One, Strategyzer’s various canvases and Y-Combinator’s Startup School.
Tech Startups in Vietnam
Vietnamese are some of the most entrepreneurial people on the planet and it’s not surprising that there are many successful tech startups in Vietnam. Vietnam’s IT scene already includes such startups as VNG, Zalora, Foody, Lazada, Tiki, MoMo, OnonPay, Triip and Zalo, and the sector is growing rapidly.
Beneath these highly visible champions of the locally-grown startup scene, there are a huge range of production teams operating in Vietnam for startups headquartered in Singapore, Hong Kong, the United States, Australia, France and others.
There are strong networks supporting those in Vietnam’s startup community, including incubators and accelerators like Vietnam Innovative Startup Accelerator (VIISA) and Vietnam Silicon Valley. Several arms of the Vietnamese Government are also very interested in startups, including The Ministry of Science and Technology, the People’s Committees of several major cities including Hanoi and Ho Chi Minh, and the National Agency for Technology, Entrepreneurship and Commercialization Development.
Vietnam is a fertile starting place for many startups. With major reforms to the legal environment and public education and training, Vietnam looks set to become an increasingly popular location to start a new company within South East Asia.
Launching a Startup in Vietnam
Certain information will be immensely valuable for foreign entrepreneurs looking to build a tech startup in Vietnam. We’ve compiled some of the most relevant practical information to accelerate your research and planning.
The Availability of Skilled Local Talent
If you’re interested in more granular information, we’ve published more detailed data to inform your hunt for talented employees.
The salaries expected by developers in Vietnam can range significantly, from well under $1000 USD gross per month to over $4000 USD gross per month for highly experienced candidates with niche expertise and an international pedigree. Senior developers are generally available from $1300-$2500 USD gross per month.
Considerable further detail on salary is available for software developers and here for web developers. Remember that there are taxes and other HR considerations that are applicable to employees in Vietnam and a range of employee benefits that your team members may be interested.
Registering a company in Vietnam can be completed relatively quickly for new foreign-owned tech companies. An Enterprise Registration Certificate (aka Business License) will be issued at the completion of the registration process.
The specific corporate and ownership structure of a startup’s legal structure in Vietnam depends on their intended use. Startups that intend to attract investment in Vietnam are typically registered as Shareholding Companies, although new companies formed to serve as a production site for a parent company located in a more investment-friendly country (eg. Singapore or Hong Kong) are generally registered as a Limited Liability Company.
Some preparation is required for the application to register a company in Vietnam. This preparation will make company registration much simpler and timely.
Taxation and Profits
Companies in Vietnam are liable for a range of taxes, including business license tax, corporate income tax, value added tax and dividend tax. There are several ways that returns can be extracted from a Vietnamese company by foreign owners, including dividends.
Offices and Coworking Spaces
Their are many potential locations around Ho Chi Minh City for a tech startup. District 1 and 3 can be thought of the city centre, but many companies are attracted to significantly lower rents in Phu Nhuan, Binh Thanh, District 5 and District 4. These areas are a ring around the CBD.
You might also consider the many coworking spaces in the city. Dreamplex, Toong, Circo and Saigon Coworking are all great spaces for tech teams.
Costs to Commence
The costs for a tech startup range considerably. You’ll need funding for office locations, company registration and initial setup and salary. That said, Vietnam is considerably cheaper to start your operations than a comparable sized operation in a location such as Singapore, Hong Kong or Australia.
Structures for Tech Teams
Internal tech capabilities are extremely valuable and should be considered by most tech startups. Aside from keeping investors satisfied, internal tech capabilities encourage greater control over your core competencies, better connection to your customers and improve the potential for innovation within your startup.
With that in mind, there are many configurations for a tech team:
1) Solo Fullstack Developers
Using a single developer to development and implement a digital product like an application or a website can be cheaper and more efficient than a larger team. However, projects need to be completed in a short timeframe and you need to be willing to make compromises. Key person risk is also a consideration when using a solo fullstack developer.
Read more about solo fullstack developers.
2) Small Development Teams
Small development teams of only 4-5 members have built many of the leading digital products we know and love. As suggested by data from Tech Stars, small teams are actually the ‘average’ team behind tech startups. They gain multiple perspectives from the extra team members. This structure is better suited for longer or more complex projects, particularly those that require deep domain expertise.
Read more about small development teams.
3) Agile Squads
Squads are based on Agile philosophies and are intended to be self-organizing and cross-functional. They’ll work in short cycles toward medium to long term objectives, with full autonomy to complete all work required to deliver the outcome within a single functional area.
Squads are typically 6-8 team members. A single leader will ensure the goals are clear and the team is working effectively, while all team members (typically developers and a designer) are expected to collaborate to deliver the best product in the most appropriate period of time.
Squads require teams to work in an Agile way. Read on for more about Agile squads, including their strengths and weaknesses.
4) Mid-Sized Development Teams
Mid-sized development teams are responsible for larger programs of work. They’re likely to be the most costly and complicated option for a startup, but may be required for an ambitious project.
Making a Tech Startup Work in Vietnam
There is no avoiding the fact that tech startups are challenging in any country!
Making Your First Hires
Your first hires are certainly much easier if you’re familiar with the market for talent in Vietnam. Understanding the relevant salary ranges and other costs is an important part of this, but you’ll also need to understand local competition for talent and how to position the roles you have on offer to attract suitable candidates. Much more information is available on this topic.
Managing an Offshore Team in Vietnam
Foreign-owned tech startups in Vietnam often manage their teams from offshore. With a few relatively simple changes, an offshore team can be highly effective. Clear, open and respectful communication becomes very important, as does high quality leadership, planning and oversight. Investing the time to build relationships is also critical.
Managing a Remote Team
Teams that are managed remotely are more effective when using several specific tips. From the very beginning, make sure you’ve selected team members who are well suited to remote work. Check-in regularly with your team and ensure expectations are clear. Creating the right culture is key for the ongoing success of a remote team: this will require consistency and regular use of the right collaboration tools.
Recruiting PHP Developers
PHP developers are one of the most common profiles needed by tech startups in Vietnam. The majority of salaries will fall within a range of $800 – $2500 USD gross per month (depending on experience, skill level, language abilities, team leadership potential and other relevant skill sets). You can also expect they’ll ask a range of questions before they join a startup.
Step-by-Step Guides for New Startups in Vietnam
We’ve written several custom step-by-step guides for various types of tech startups in Vietnam. Read on for more about starting a new tech team in Vietnam or launching a web development company in Vietnam. Both can be commenced quickly (if required).
Want More Help?
Startups are a major focus for Metasource. We could talk for hours and we encourage you to reach out!