Vietnam is quietly becoming one of the most promising startup destinations in Southeast Asia. With a growing tech-savvy workforce, low operating costs, and increasing interest from international investors, it’s no surprise founders are starting to shift operations or even headquarter their startups here. But like any move, especially internationally, there’s a lot you need to know to make the transition smooth — legally, culturally, and strategically.
Why Vietnam?
1. Affordability Meets Opportunity
Vietnam offers one of the best cost-to-talent ratios in the region. Office space in Ho Chi Minh City or Hanoi can cost a fraction of what you’d pay in Singapore or the U.S., and salaries — especially for engineering, customer support, and operations — are significantly lower while quality remains high. This is ideal for early-stage companies looking to extend their runway without compromising on quality.
2. A Young, Digital-First Workforce
Over 60% of the population is under 35, and digital literacy is growing rapidly. Vietnam has a strong culture of software development and STEM education. Developers are often trained in both Vietnamese and international programming standards, and English proficiency is growing, especially in tech and business hubs like Ho Chi Minh City (HCMC) and Da Nang.
3. Startup Ecosystem on the Rise
The startup scene in Vietnam has matured rapidly over the past five years. Government initiatives, startup competitions, accelerators (like VIISA, ThinkZone, and Saigon Innovation Hub), and growing venture capital interest have created a buzzing ecosystem. Popular sectors include fintech, e-commerce, healthtech, edtech, and logistics. In 2024, Vietnam saw one of the highest volumes of seed-stage deals in Southeast Asia.
Legal, Licensing & Business Setup
1. Company Structure
Foreign founders typically register a 100% foreign-owned enterprise, usually an LLC (Limited Liability Company). This setup allows full control, but it’s bureaucratically heavier than places like Singapore. You’ll need to:
- Register with the Department of Planning and Investment (DPI).
- Secure a business address (can be co-working for the first phase).
- Deposit your charter capital (minimum is technically undefined, but ~$10,000 USD is a safe base).
- Open a Vietnamese business bank account.
Some sectors (like e-commerce or logistics) may require additional approvals or local partners. Always consult a Vietnamese legal advisor or a firm with English-speaking staff familiar with foreign ownership laws.
2. Visas and Work Permits
Running a business in Vietnam doesn’t automatically mean you can live there indefinitely. You’ll need:
- A business visa or investor visa (DT1 to DT4, depending on capital contribution).
- A work permit, unless you’re exempt due to your investor status or company role.
The paperwork can be time-consuming, so it’s common to hire a visa agent or legal firm to handle filings. Make sure everything is legit: visa laws are tightly enforced.
Financial Operations & Tax
1. Banking
Vietnam’s banking system is semi-modern. Mobile apps are decent, but cross-border transactions, multi-currency accounts, and even basic transfers can still involve physical paperwork or approvals. The most foreigner-friendly banks include:
- HSBC
- Standard Chartered
- ACB (Asia Commercial Bank)
Expect delays, red tape, and some old-school processes. Also, you cannot legally operate a foreign business in Vietnam using a personal or foreign bank account: it must be a local, registered business account.
2. Taxation
- Corporate Income Tax (CIT): 20% standard.
- Value-Added Tax (VAT): 10% on most goods/services.
- Personal Income Tax (PIT): Progressive, up to 35%, but lower for foreign experts with exemptions.
Vietnam follows international accounting standards loosely, but reporting must be done in Vietnamese and submitted in specific formats. Hire a local accountant or firm who understands foreign-owned entities — this is not DIY territory.
Talent, Culture & Work Environment
1. Finding and Managing Talent
Vietnam has a deep talent pool, especially for developers, designers, and back-office support. Popular platforms for hiring include:
- VietnamWorks
- TopCV
- ITViec (for developers)
Salary expectations are rising quickly in cities like HCMC, especially among bilingual or experienced professionals. Be aware: many talented devs are getting scooped by foreign companies offering remote U.S. or EU salaries. To retain good talent, focus on culture, stability, and growth.
2. Cultural Nuances
Vietnamese business culture is more formal and hierarchical than you might be used to. Relationships and respect matter, especially with government officials. Things to note:
- Don’t rush decisions.
- Face-saving is important; avoid public criticism or confrontation.
- Build trust through in-person meetings, dinners, and follow-up.
That said, the startup crowd (especially under 35) is dynamic, curious, and increasingly Westernized in communication style.
Lifestyle & Quality of Life
If you’re moving yourself or your team, Vietnam offers a very livable experience:
- Ho Chi Minh City: Fast-paced, cosmopolitan, startup-heavy.
- Hanoi: More traditional, governmental, with strong culture and food.
- Da Nang: Chill, beachside city that’s attracting remote teams and dev shops.
You’ll find a vibrant expat community, great food, strong coffee culture, affordable living, and a decent private healthcare system. English is widely spoken in urban areas, and coworking spaces like Toong, The Hive, and Dreamplex are everywhere.
Challenges to Watch Out For
- Red Tape: Bureaucracy can slow everything down, from licensing to tax filings.
- Corruption Risks: Not always blatant, but certain industries or interactions may involve informal “facilitation fees.”
- IP Enforcement: Copyright and IP law exist, but enforcement is spotty. If you’re building brand/IP-heavy products, be vigilant.
Final Take
Vietnam is not a frictionless environment, but it offers major upsides for startups who can navigate the rules and invest in relationships. If you’re looking to scale on a budget, tap into Southeast Asia, or build a serious offshore team, it’s one of the best places in the world to build quietly, until you feel you’re ready for prime time.
