Vietnam IT Outsourcing 2025: Market Reports & Trends

The global tech sector is experiencing an acute shortage of skilled developers, with estimates predicting a deficit of up to 85 million professionals by 2030.

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This talent gap has pushed businesses worldwide to turn toward offshore development solutions.

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In this landscape, Vietnam has rapidly emerged as a preferred destination for outsourcing software development. Once considered a secondary player in Asia, Vietnam is now firmly positioned among the top 7 global software outsourcing destinations and holds the third spot in Southeast Asia, surpassing several regional competitors in terms of growth, scalability, and service quality.

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Vietnam’s appeal lies in more than just cost-efficiency. Its strong educational foundation, increasing digital literacy, and government support have cultivated a dynamic, innovative, and highly skilled IT workforce.

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In this article, Dirox offers an in-depth analysis of the Vietnam IT outsourcing market in 2025, along with seven emerging trends that are reshaping development outsourcing in Vietnam, from cloud-first strategies to industry-specific customization.

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I. Market Growth & Projections

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Vietnam’s IT outsourcing industry is growing at a pace few other countries can match. In 2024, Vietnam's IT Outsourcing revenue was US$0.7 billion, and it is projected to nearly double to US$1.28 billion by 2028, maintaining a robust compound annual growth rate (CAGR) of 17%.

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This sustained growth is being fueled by a combination of factors, including rising demand for digital transformation across global industries, the increasing complexity of software needs, and Vietnam’s expanding expertise in agile and scalable development methodologies.

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Vietnam’s impressive trajectory places it in a strategic position to absorb the excess demand created by global talent shortages.

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Companies in Europe, North America, Japan, and South Korea—facing challenges in hiring local developers—are increasingly turning to development outsourcing in Vietnam to ensure faster time-to-market and product innovation.

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This upward trend is expected to continue as businesses seek not only to cut costs but also to tap into IT solutions in Vietnam that deliver consistent, high-quality results at scale.

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II. Core Competitive Advantages

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1. Tech Talent at Scale

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At the core of this ecosystem is a thriving talent base.

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With over 560,000 software developers and approximately 55,000 to 60,000 IT graduates entering the workforce each year, the country offers a deep talent pool capable of handling everything from legacy modernization to cutting-edge AI development outsourcing.

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These professionals are well-versed in modern methodologies like Scrum and Agile, and many hold international certifications. In addition, Vietnam ranks among the top 10 globally for developer capabilities, reflecting the depth and breadth of its technical expertise.

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Meanwhile, IT staff augmentation and dedicated development teams have become standard offerings, giving international clients the flexibility to scale up or down based on project needs.

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2. Significant Cost Advantage

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While Vietnam’s value as an outsourcing partner extends well beyond affordability, cost remains an important factor. 

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Hourly development rates in Vietnam range from $20 to $40, significantly lower than Singapore's monthly salaries of $4,500 to $7,000. Even when compared to their Indian counterparts, Vietnamese developers earn 15% to 30% less, offering significant cost savings.

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3. Government & Infrastructure Support

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Companies are also increasingly drawn to the overall quality of service and the growing maturity of Vietnam’s IT ecosystem. The country has invested heavily in nurturing a generation of highly capable developers through specialized education programs, international partnerships, and government initiatives like the National Digital Transformation Program.

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Government support further amplifies these advantages. With FDI flowing in in digital and high-tech sectors, Vietnam is actively creating an enabling environment for both local and international tech companies.

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Infrastructure development, regulatory improvements, and digital literacy programs are helping to cement Vietnam’s reputation as a tech hub of Southeast Asia.

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In a major boost to new entrants, the government also introduced a new 3-year Corporate Income Tax (CIT) exemption in May 2025 for newly established SMEs, including foreign-owned IT firms, significantly reducing the barrier to entry and easing initial operational costs, making Business Process Outsourcing much more attractive for foreign businesses willing to have a legal entity in Vietnam and a long-term presence in Asia..

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This pro-business tax incentive aligns with broader national goals to attract innovation-driven enterprises and position Vietnam as a destination for high-value, custom software development and offshore IT solutions.

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III. The 7 Trends Reshaping Development Outsourcing in Vietnam

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1. AI & Generative AI Integration

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Artificial Intelligence, and more specifically Generative AI, is reshaping the global software landscape, and Vietnam is keeping pace.

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Recent data shows that 56.6% of developers in Vietnam already use ChatGPT or similar AI tools to support coding tasks, reduce errors, and accelerate development timelines. This trend aligns with Vietnam’s National AI Strategy, which aims to place the country among the top 50 AI-ready nations globally (Vietnam is currently ranked #58).

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From chatbots and recommendation engines to intelligent automation in fintech and logistics, Vietnam is already delivering tangible value through AI development outsourcing.

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For businesses looking to integrate machine learning or large language models into their operations, Vietnam offers a combination of affordability and technical sophistication that few other markets can match.

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2. Cloud-First Development Environment

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The shift to the cloud is another defining trend in Vietnam software development services.

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With cloud-native applications becoming the norm, Vietnam has positioned itself as a cloud-first outsourcing destination. The Ministry of Information and Communications (MIC) aims to expand the global cloud services market share covered by domestic cloud providers to 70% in 2030 as part of national goals for digitalization. 

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As the country’s data center infrastructure continues to expand, Vietnam has seen a corresponding boom in cloud development services.

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Local developers are not only proficient in deploying and managing cloud applications, but they also specialize in DevOps services, microservices architecture, and cloud migration strategies, critical skills for modern enterprise needs.

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3. Industry-Specific Customization

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Vietnam’s software outsourcing sector is increasingly industry-specific, offering tailored IT solutions to meet sectoral needs. In fintech, for example, Vietnam is undergoing rapid transformation, with the market expected to reach USD 62.7 Billion by 2033.

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An impressive 95% of local banks are actively adopting new technologies such as mobile payments, digital identity verification, and AI-driven risk assessments. This makes Vietnam a prime destination for fintech development outsourcing.

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In manufacturing, the country is integrating IoT technologies into smart factory solutions, helping global manufacturers modernize production lines.

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Meanwhile, the e-commerce sector is evolving toward OMO (Online-Merge-Offline) retail experiences, powered by AI, big data, and cloud analytics.

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This kind of domain-specific expertise makes Vietnam’s custom software development services particularly appealing for companies in need of specialized, high-impact solutions.

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4. Addressing Global Talent Gaps

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One of the strongest arguments for choosing IT outsourcing in Vietnam lies in its ability to address developer shortages in other advanced economies. 

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Japan, for instance, is expected to face a 600,000-person shortfall in IT engineers by 2030, while South Korea is expecting more than 10,000 AI talent shortages this year.

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Vietnam has emerged as a primary outsourcing partner for these markets, offering both cultural compatibility and technical capacity.

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Vietnamese firms have also improved their language proficiency and time zone overlap, making it easier for companies in Japan, Korea, and beyond to manage dedicated development teams with minimal friction.

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5. Strategic Positioning Against India

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Vietnam is also carving out a niche as a viable alternative to India for outsourcing software development.

While India remains a dominant force, Vietnam offers unique advantages in terms of project agility, team responsiveness, and regional proximity.

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For startups and mid-sized firms looking for high-quality development with rapid turnaround, Vietnam’s agile workforce and streamlined processes make it especially suitable.

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6. Evolving Cost Structures and Sustainable Growth

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Although Vietnam remains one of the most affordable outsourcing destinations, the focus is shifting from cost-cutting to long-term value creation.

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Entry-level salaries start at around $480 per month, while more experienced roles can command over $2,000 monthly.

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However, thanks to AI and automation, many firms are achieving 20–30% cost reductions in development cycles, maintaining their competitive edge.

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With 67.8% of the population in the working-age group (15–64) and rising levels of digital literacy, Vietnam’s workforce offers both quantity and quality.

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The emphasis now is on sustainable growth, strong team retention, and continuous upskilling to meet evolving global standards.

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7. Overcoming Language and Regulatory Barriers

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Despite its strengths, the Vietnam IT outsourcing sector still faces a few challenges. English proficiency remains average, ranking 8th in Asia and 63rd globally in the 2024 Global English Proficiency Index.

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However, rising demand for English-speaking talent—combined with salary premiums for English proficient developers—is quickly improving the landscape.

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Vietnam is also addressing historical issues around administrative complexity and regulatory uncertainty through a sweeping series of reforms in 2025.

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As part of its Streamlined Governance & Regulatory Modernization initiative, the government is implementing a Digital-First Administration strategy. By the end of 2025, all business-related administrative procedures are mandated to be fully online, eliminating paperwork and increasing both speed and transparency for foreign and domestic businesses alike.

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This digital shift is complemented by a Nationwide Administrative Restructuring, aiming to simplify bureaucratic processes, reduce red tape, and create a more stable and predictable operating environment for investors.

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In parallel, enhanced legal frameworks are being rolled out to align with international standards.

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Vietnam’s ongoing adoption of the International Financial Reporting Standards (IFRS) by 2025 is expected to boost transparency in financial reporting, while Decree 13, the new data protection law, is bringing the country’s data governance closer in line with GDPR-style global benchmarks.

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At the organizational level, Vietnamese tech firms are prioritizing employee well-being, offering flexible work arrangements, and investing in career development to reduce attrition and attract top talent.

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At Dirox, we are proud to be named the winner of the title “Best IT Companies Award 2024” by ITViec, particularly for our strong focus on employee well-being, training, and a positive work environment!

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Conclusion

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The momentum behind Vietnam IT outsourcing in 2025 is undeniable. Its combination of high-quality development, competitive pricing, and deep expertise in AI, cloud, and industry-specific solutions makes it uniquely positioned to serve businesses seeking reliable and scalable IT partnerships.

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Vietnam’s proactive efforts to overcome its challenges—be it language proficiency, regulatory alignment, or talent retention—underscore its commitment to becoming not just a low-cost provider but a long-term strategic partner in the digital transformation journey.

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Contact Dirox today to explore how to outsource your software development to Vietnam!