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Ever wondered how to tap into Vietnam’s tech scene to grow your business? As the world changes, global leaders are looking beyond traditional outsourcing destinations. Vietnam has rapidly become not just a cost-effective option but a strategic partner for innovation and growth. For over a decade I’ve guided companies through the investment landscapes of ASEAN and I’ve seen Vietnam’s tech sector become a global powerhouse.

For CTOs, founders and managers under pressure to deliver cutting edge technology without breaking the bank, understanding this market is a game changer. This isn’t just about hiring developers; it’s about building a resilient, strategic extension of your team. Choosing the right software development outsourcing partner is key, expertise, reliability and alignment with your project’s needs can make all the difference.

Key Takeaways

Vietnam’s Rise as a Global Software Outsourcing Hub

software outsourcing company in vietnam

Why Vietnam is no longer a “cheap” option—it’s a strategic one

For years the conversation around outsourcing was about one thing: cost. Today the smartest companies are looking for value, stability and talent, and that’s where Vietnam shines. The country has developed a thriving ecosystem of highly skilled, ambitious tech professionals.

Vietnam’s rapid technological advancements and strong government support have further cemented its reputation as a leading software outsourcing destination. This isn’t a cottage industry; according to VietnamPlus in a 2024 report, IT outsourcing is a booming sector that has generated hundreds of millions of dollars in revenue. This financial success is built on quality and that’s why Vietnam is a strategic choice for long term growth.

Target audience: CTOs, founders and teams under pressure to scale affordably

Whether you’re a startup founder needing to build an MVP yesterday, a CTO at a mid-sized company looking to expand your development capacity or a project manager at a large enterprise tasked with modernizing legacy systems, the challenge is the same: how to scale? Outsourcing to Vietnam is the answer, offering a combination of cost efficiency and technical expertise that’s hard to beat. Vietnamese software outsourcing companies have a proven track record of delivering projects for global clients and international clients across various industries.

Viettonkin’s ASEAN positioning across tech, legal and operational advisory

My work at Viettonkin goes beyond simple matchmaking. We operate at the intersection of technology, law and business strategy. We don’t just help you find a vendor; we help you build a sustainable operational footprint. As a trusted outsourcing service provider and service provider, Viettonkin supports clients throughout their outsourcing journey in Vietnam. From structuring your service agreements to protect your intellectual property to advising on long term strategies like setting up a local entity, we provide the 360 degree insight needed to succeed in the ASEAN market.

Vietnam vs Other Outsourcing Markets—Where It Wins

Statistics on the Growth of IT Outsourcing

The global software development outsourcing industry has grown exponentially over the past decade and Vietnam has solidified its position as a major player in this market. Recent industry reports project the global IT outsourcing market will reach $397.6 billion by 2025, with a CAGR of 7.7%. Vietnam’s own IT outsourcing sector has mirrored this growth, with software development exports reaching $3.5 billion in 2020. This growth is driven by a combination of highly skilled talent, competitive labor costs and a business friendly environment that encourages innovation and efficiency.

As a leading software development company in Vietnam, Orient Software has been part of this transformation. By delivering high quality software development outsourcing services to clients worldwide, Orient Software demonstrates the strengths that have put the Vietnamese outsourcing industry on the global map.

Companies looking for a reliable development company in Vietnam benefit not only from cost savings but also access to a deep pool of technical expertise and a culture of continuous improvement. The result is a thriving ecosystem where both startups and established enterprises can leverage world class outsourcing services to accelerate their digital transformation and achieve sustainable growth.

Onshore, Nearshore and Offshore Outsourcing—What’s Right for You?

When considering software development outsourcing, it’s essential to understand the differences between onshore, nearshore and offshore models. Onshore outsourcing means working with a software development company within your own country, offering the benefits of shared language, culture and time zone. Nearshore outsourcing means working with a provider in a neighboring or nearby country, which can offer similar benefits with added cost savings. Offshore outsourcing, such as working with an outsourcing company in Vietnam, typically offers the most cost advantages, thanks to lower labor costs and access to a large talent pool.

Each has its own strengths. Onshore outsourcing is ideal for projects that require close collaboration and minimal communication barriers. Nearshore outsourcing strikes a balance between proximity and affordability, suitable for companies that value cultural alignment and overlapping work hours.

Offshore outsourcing, especially with a reputable software development outsourcing company like Orient Software, is perfect for organizations that want maximum value and scalability. With experience across all three models, Orient Software can help you assess your priorities. Whether it’s cost, communication or technical expertise, and guide you to the outsourcing strategy that best fits your business goals.

Cost comparison with India, Eastern Europe, LATAM

Let’s get to the numbers. While Eastern Europe and Latin America have become more expensive, Vietnam is still very competitive. For a more detailed view, the 2024 “IT Salary & Recruitment Market” report from ITviec shows that even senior developer salaries in Vietnam offer significant savings compared to Western markets, without the communication friction or time-zone challenges of some other regions. This cost-efficiency means you can get more done, whether that’s building more features or accelerating your time to market.

Vietnam’s cost-efficiency also means you can get efficient solutions that maximize value and minimize waste in software development projects.

STEM talent and developer pool scale

Vietnam’s advantage is its people. The country has a young, tech-savvy population and a strong government focus on STEM education, producing a large talent pool of over 400,000 IT engineers. This isn’t just about quantity; the quality is high, with developers skilled in latest technologies. Vietnamese developers have extensive knowledge, strong technical skills and proficiency in multiple programming languages, making them highly sought after for complex software projects.

English fluency and cultural alignment for Western teams

One of the historical barriers in outsourcing was communication. In Vietnam, that barrier is rapidly disappearing. The younger generation of tech professionals has high level of English proficiency and the business culture is increasingly aligned with Western practices. This means smoother collaboration, clearer requirements and better outcomes for your projects.

Many Vietnamese software outsourcing companies have also adopted Western business practices, making them better equipped to work with international clients.

Types of Software Outsourcing Companies in Vietnam

Product-focused vs service-driven vendors

It’s essential to understand the different types of partners you’ll encounter. Some companies are product-focused, meaning they may offer solutions built on their own platforms. Others are purely service-driven, offering custom development tailored to your exact needs. These vendors specialize in delivering customized solutions that address specific business requirements. The right choice depends on whether you need a ready-made solution or a completely unique build.

MVP shops vs enterprise-grade system integrators

You’ll also find a spectrum from small, agile “MVP shops” to large, enterprise-grade system integrators.

Choosing the right type of partner from the start is key. A startup that partners with a slow-moving enterprise vendor will be frustrated, while a large corporation that hires a small MVP shop will face risks in security and scalability.

How to Evaluate a Software Outsourcing Partner in Vietnam

Technical expertise: tech stacks, certifications, domain focus

Look beyond the marketing brochures. The real proof is in their technical depth. When evaluating potential partners, it’s essential to assess their software engineering capabilities and extensive expertise in relevant technologies and domains. Ask for detailed case studies relevant to your industry. Ask about their experience with your specific tech stack. If you’re in a regulated field like fintech or healthcare, ask about their domain-specific knowledge.

Operational maturity: project managers, onboarding, time zone management

A great development team is only as good as the processes that support it. How do they manage projects? Do they have skilled, English-speaking project managers? What’s their onboarding process like? How do they ensure smooth collaboration across time zones? A mature partner will have clear, confident answers to these questions.

Mature outsourcing partners may also provide managed services to ensure ongoing support and optimization of your technology systems.

Security & compliance: IP, NDAs, ISO 27001, GDPR

For me, this is non-negotiable. Your intellectual property is your most valuable asset. A trustworthy partner must have ironclad security practices. This includes:

Pricing Models and Hidden Costs to Watch For

Hourly, fixed price, dedicated team—what each model means

You’ll typically encounter three pricing models:

Fixed Price: You agree on a set price for a specific scope of work. This provides cost certainty but can be rigid if requirements change.

Dedicated Team: You hire a full-time team that works exclusively on your project.

This is the best model for long-term projects, as it fosters deep integration and knowledge retention. Many companies choose to establish offshore development centers in Vietnam to access dedicated teams and optimize project outcomes.

Typical price ranges in 2025 for mid-senior developers

While rates vary, you can expect significant value. Data from Arc.dev, updated for 2024, shows that software engineer salaries in Vietnam are highly competitive, allowing outsourcing firms to offer rates that are often a fraction of what you’d pay for equivalent talent in the U.S. or Europe. This translates directly into a longer runway for startups and a higher ROI for established companies.

Outsourcing software development to Vietnam means you get competitive rates without compromising on quality.

Hidden costs to watch for

What most vendor price lists won’t show you are the additional costs mandated by Vietnamese labor law. Under Labor Code 2019 Articles 101–104 and Decree 58/2020, you will incur employer contributions of 8% Social Insurance + 1.5% Health Insurance + 1% Unemployment Insurance on top of gross salaries. In addition, "13th-month" bonuses are customary (per MoLISA Circular 13/2020), so it is crucial to confirm with your service provider if this is included in their pricing. A transparent partner will be upfront about these costs, while an opaque one might surprise you later.

Most in-demand outsourced services in 2025

Web & mobile app development

This is the bread and butter of outsourcing, and Vietnamese firms excel at building high-quality, user-friendly applications for both iOS and Android. They also have strong expertise in web application development, mobile application development, and web development for clients worldwide.

AI/ML development and data engineering

Vietnam is moving up the value chain, and its top firms are rising to the challenge. In fact, Vietnam News recently highlighted the “Top 10 Outstanding Digital Technology Enterprises in 2024,” recognizing companies for their achievements in advanced fields like AI and big data. This proves the country’s growing capacity for complex, innovative work.

Vietnamese firms are getting recognized for their expertise in machine learning and natural language processing, delivering advanced AI solutions for various industries.

Cloud-native systems and DevOps

Modern businesses run on the cloud. Vietnamese developers have deep expertise in cloud computing and can deliver scalable, reliable cloud-based solutions for digital transformation. They are skilled in AWS, Azure, Google Cloud Platform and have DevOps expertise to build, deploy and manage scalable, resilient systems.

Custom ERP and enterprise application modernization

Many large companies are stuck with outdated legacy systems. Vietnamese partners are increasingly being trusted to handle complex projects modernizing these core applications, integrating with new technologies and unlocking new efficiencies. Vietnamese partners are recognized for delivering high quality software solutions that drive business transformation.

Red Flags When Outsourcing to Vietnam, And How to Avoid Them

Lowball pricing = quality risks

If the price seems too good to be true, it probably is. Extremely low rates are often a sign of inexperienced developers, poor management or high turnover environment. You want value, not the lowest price.

Overpromising without infrastructure

Be wary of a small firm that can do everything. A capable partner will be honest about their strengths and weaknesses. Ask for proof of their infrastructure, team size and past projects at the scale you require.

Communication breakdowns and how to vet for clarity

Vet communication skills from your very first interaction. Is their team responsive? Are their answers clear and direct? A partner who communicates poorly during the sales process will be a nightmare to work with once the project starts.

Case Scenario: Startup vs Enterprise. How Their Needs Differ

Retained Clients and Success Stories

At Orient Software, long-term partnerships are at the core of our approach to software development outsourcing. We have successfully delivered custom software development, mobile app development and a wide range of outsourcing services to clients across various industries including finance, healthcare and e-commerce. Our commitment to innovative solutions, technical expertise and quality software outsourcing services has enabled us to build long-term relationships with clients who trust us to drive their digital transformation.

One example is our work with a leading financial services provider. We developed a mobile app that allowed their customers to manage accounts seamlessly on the go, resulting in over 100,000 downloads within the first month of launch. In another project, we partnered with a healthcare company to build a web application that streamlined patient management, delivering significant cost savings and improved patient care. These success stories demonstrate Orient Software’s ability to deliver software outsourcing services tailored to each client’s specific needs, with measurable business impact and long-term satisfaction.

Startup: fast iterations, flexibility, MVP-centric partner

A startup’s priority is speed. It needs a flexible partner who understands the iterative nature of building a new product. The ideal vendor is an agile MVP shop that can deliver a functional product quickly and adapt as the vision evolves.

Enterprise: governance, SLAs, data protection

An enterprise has different needs. Its priorities are security, stability and seamless integration. It requires a partner with strong governance, strict Service Level Agreements (SLAs) and demonstrable experience with enterprise-grade data protection.

How Viettonkin Supports Sustainable Outsourcing Growth

Additional Tips for Clients

If you’re considering software development outsourcing to a company in Vietnam, a few best practices can help you have a smooth and successful experience. Start by thoroughly researching potential partners, look for a software development outsourcing company with a proven track record, relevant industry experience and a reputation for delivering high quality results. Clear and consistent communication is key: establish well-defined goals, timelines and feedback channels from the beginning to keep your project on track.

Be open to new ideas and flexible in your approach, as the best solutions often emerge through collaboration and adaptation. By choosing a reliable partner like Orient Software, you get not only technical expertise but also a commitment to transparency and continuous improvement. With the right outsourcing company in Vietnam by your side, you can navigate the complexities of software development outsourcing with confidence and achieve your business goals efficiently and innovatively.

More than a vendor. we structure entry, tax, compliance and growth

This is where Viettonkin provides unique value. We are not just a vendor directory. We are strategic advisors. For some clients, a simple service contract is enough. For others with a long-term vision, we help structure more complex arrangements, from setting up a local entity to optimizing their tax and compliance framework for sustainable growth in Vietnam.

Example: Building a digital team for a Fortune 500 brand

For a Fortune 500 retail client, we went beyond finding developers. We helped them structure a Build-Operate-Transfer (BOT) agreement. We set up the initial team, established the operational processes and managed it for two years before transferring it to them as a fully functional, captive R&D center. That’s a risk-free strategy for growth.

Cross-border IP, entity setup and tech talent advisory

Our services are designed to support your journey from initial outsourcing to full-fledged market presence. We offer expert advice on cross-border IP protection, legal entity setup and ongoing tech talent advisory to ensure your venture is successful for years to come.

Conclusion: Outsourcing Is a Growth Lever—Choose Wisely

Recap: vendor fit > cheapest option

Outsourcing to Vietnam is one of the most powerful growth levers available to your business today. But success depends on choosing the right partner. The best decision is rarely based on price alone. It’s based on fit—technical fit, cultural fit and strategic fit.

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Setting the Stage

Let's begin by examining recent developments in Vietnam's semiconductor market. In late 2023, Intel – one of the world’s leading semiconductor manufacturers – made the decision to halt its multi-billion-dollar investment in Vietnam. At first glance, this appears to be a significant setback for Vietnam’s semiconductor industry. However, soon after, another striking event unfolded. Nvidia, a globally renowned semiconductor giant, announced a partnership with FPT, an Information Technology service company in Vietnam, to develop an AI chip ecosystem. So, what’s really going on here? Is Vietnam’s semiconductor market losing its appeal? Or could this be a calculated move to align with emerging trends in the country's semiconductor landscape? Today’s blog article will offer fresh insights into this intriguing issue.

Intel's Setback

In recent years, Intel’s dominance in the semiconductor market has faltered. Once holding a 50-70% market share, Intel saw its lead diminish starting in Q1 2020 as the gap with AMD began to close. Experts now predict AMD will soon overtake Intel and become the market leader, surpassing its long-time rival.

Intel's revenue dropped from $79 billion in 2021 to $55 billion by June 2024, driven by weak CPU demand. In 2023, Intel experienced a 31% revenue decline dropping to $18.9 billion, which is largely attributed to challenges in its foundry business.  Following the submission of its financials to the US Securities and Exchange Commission (SEC), Intel's stock declined by 4.3%.

In 2024, Intel's CEO, Pat Gelsinger, announced a Q2 net loss of $1.61 billion, with further losses expected. Intel has also  delayed the construction of two major chip plants in Germany and Poland, citing reduced demand—a considerable setback for both the company and the respective governments.. Meanwhile, Asia continues to dominate as the global semiconductor hub, housing over 80% of production capacity. Taiwan, Japan, and China lead the region, with China alone contributing 27%.

Intel’s decision to withdraw investment from Vietnam and redirect it to European countries has raised questions about its effectiveness. However, is this truly the primary reason for Intel’s current challenges?

What Are the Real Causes?

Intel is facing significant challenges due to emerging trends in the global semiconductor market, particularly the rapid advancement of AI chip technology. The AI chip industry, valued at $45.5 billion in 2021, is expected to grow substantially, with the market projected to reach $311.58 billion by 2029, reflecting a compound annual growth rate (CAGR) of 20.4%. Meanwhile, global investment in AI is skyrocketing, with major contributions from India, South Korea, China, and Saudi Arabia, amounting to a total of $380 billion. This boom is driving semiconductor growth, with companies like Nvidia and TSMC demonstrating strong performance.

This is likely the main reason behind Intel’s recent decline, rooted in a critical misstep by its leadership. About seven years ago, Intel had the opportunity to acquire shares in OpenAI. However, then-CEO Bob Swan believed that generative AI would not emerge in the consumer and enterprise markets anytime soon and would be unlikely to generate profits. As a result, Intel declined the investment, and today, OpenAI's market valuation is estimated at $80 billion.

This marks yet another strategic miscalculation by Intel. In the 1990s and 2000s, Intel dominated the semiconductor chip market. However, their decision to stick with DUV lithography technology while TSMC and Samsung Foundry shifted to EUV caused Intel to lose its competitive edge. Now, once again, they have missed a major opportunity, ceding ground to Nvidia, Google, and Microsoft in the AI era.

Vietnam in the New Wave and Promising Partnerships

In recent years, Vietnam has solidified its position in the global semiconductor market, playing  a crucial role in the global semiconductor manufacturing supply chain. Vietnam became the third-largest semiconductor partner of the United States in Asia and accounted for over 10% of U.S. chip imports for seven consecutive months. Between 2016 and 2021, Vietnam's semiconductor market grew by 7.1%, reaching a valuation of $18.2 billion in 2022. The country is home to approximately 40 to 50 companies in the chip design sector, supported by over 5,000 design engineers, positioning itself for future industry expansion.

Vietnam has surpassed the global average in the Government Artificial Intelligence (AI) Readiness Index for three consecutive years. The country currently ranks 5th out of 10 in the ASEAN region and has moved up three places to rank 59th out of 193 countries, according to the assessment by Oxford Insights.

Vietnam has also successfully attracted major electronics companies to invest in AI chip packaging and substrates, such as Intel ($1.5 billion), Samsung (nearly $2 billion), Amkor ($1.6 billion), and Hana Micron ($1 billion). These companies will not only enhance the quality of the workforce in AI chip production in Vietnam, but also contribute to the development of the AI chip supply chain.

Recently, NVIDIA partnered with FPT, a leading Vietnamese technology group and one of Asia's Top 50 IT service companies, to invest up to $200 million in an AI Chip Factory. This facility aims to boost the economy and advance Vietnam's semiconductor and AI chip industries. At the signing ceremony, Keith Strier, Vice President of NVIDIA's Global AI Initiative, highlighted their commitment to collaborate with Vietnamese businesses to accelerate digital transformation and establish Vietnam as a powerhouse in AI chip development.

From a business perspective, this partnership represents a successful investment attraction from a major foreign name for FPT, showcasing the company's credibility in the eyes of its partners. On a larger scale, this deal, along with other international investments, demonstrates the potential and capabilities of Vietnamese companies as well as the Vietnamese government. It underscores that Vietnam has established strategic directions and sound policies to embrace and adapt to the new trends of the era, including the decision to "decline" investments from Intel.

Opportunities and Challenges for Investor

Vietnam has a multitude of factors that can positively influence foreign investment, instilling a significant level of confidence for companies looking to establish operations in the country.

In terms of policy: The government has identified opportunities and is committed to enacting supportive measures, while various provinces are working to improve their infrastructure. Leaders are actively working to attract Vietnam's semiconductor companies and factories, as evidenced by Resolution No. 136/2024/QH15 from the National Assembly, which outlines specific initiatives for Da Nang:

Regarding High-Tech Workforce Development: Vietnam aims to develop 50,000 semiconductor specialists by 2030, a strategic move that will greatly benefit high-tech firms like Intel. Nonetheless, this target may fall short, as certain industries could demand an even larger talent pool than originally anticipated.

Open Market and Strong Diplomatic Strategy: Vietnam boasts an open market and an effective diplomatic approach, collaborating with nations on the United Nations Security Council and leading semiconductor countries. Its geographic proximity to Japan, Taiwan, and China is advantageous for participation in the global supply chain, which greatly benefits Vietnam's semiconductor industry. Vietnam has entered into free trade agreements with Japan (VJEPA) and South Korea (VKFTA), enhancing technological collaboration within Vietnam's semiconductor sector. Furthermore, companies such as Samsung and Intel have made significant investments in the country, reinforcing Vietnam's semiconductor standing in the global market.

Additionally, the Vietnamese semiconductor market will face numerous new challenges, with competition being the most significant. Although various factors continue to present opportunities for Vietnam's semiconductor sector, becoming a leading global hub in semiconductor technology requires patience and long-term strategies. Furthermore, the government must intensify efforts to refine policies that support foreign investment, enhance the quality of the workforce, and comprehensively enhance infrastructure to  create the optimum conditions for rapid growth.

Conclusion

In summary, it can be affirmed that Vietnam has taken the right steps in its development within the semiconductor technology market. While initial challenges emerged, they have showcased Vietnam's adaptability and ability to navigate industry trends, paving the way for a promising entry into this new wave of opportunities. Objectively speaking, this is indeed a dynamic and promising environment for the future. Data and market trends clearly indicate that Vietnam’s semiconductor chip has the potential to become one of the leading semiconductor technology hubs in the world.

Education has always been a top priority for Vietnam’s leadership. Not only does it play a critical role in the nation’s long-term development, but it also significantly contributes to the economy, particularly in attracting foreign direct investment (FDI). Many investors from around the world have recognized the potential of this sector in Vietnam and are showing increasing interest in the market. To tap into this key market through establishing branch campuses, it is essential to have a comprehensive understanding of the landscape, especially considering Vietnam’s unique ideological context and its stringent regulations on investing in education. This article aims to provide a thorough and in-depth perspective on the subject.

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Overview of the Higher Education Market in Vietnam

Higher education has always been crucial to Vietnam's development, significantly impacting socio-economic issues like economic growth and poverty reduction. Consequently, Vietnamese leaders prioritize its growth. However, the World Bank highlights financial resource shortages that hinder the higher education system's development. In response, the government has introduced legal frameworks through the Ministry of Education and Training to attract domestic and foreign private investment, leading to positive progress.

In fact, FDI interest in Vietnam's higher education sector started to gain traction in 2019. According to statistics reported by the news portal CafeF, FDI into education between August 2019 and October 2019 reached US$97 million.

As of December 31, 2021, Vietnam had 408 joint training programs with foreign higher education institutions. Of these, 186 programs were partnerships between private universities and international partners, while 222 programs were licensed by the Ministry of Education and Training.

According to the Ministry of Education & Training, by June 2024, the total foreign investment in this sector amounted to US$4.57 billion across 605 projects, with around 430 joint training programs being implemented at 65 domestic higher education institutions. Additionally, five foreign-invested universities are currently operating in Vietnam. Notable names in this field include RMIT University Vietnam, the British University Vietnam (BUV), the American University in Vietnam (AUV), Swinburne Vietnam, and Greenwich Vietnam.

Despite progress, Professor Raymond Gordon, Vice-Chancellor of the British University Vietnam (BUV), noted that Vietnam is a "hidden gem" for educational investment in Asia. While other countries face intense competition in higher education, Vietnam, despite having prestigious institutions, still sees limited foreign investment. This indicates that the market's potential remains underdeveloped.

Legal Regulations on Establishing University Branch Campuses

The government is currently accelerating the process of refining policies and legal regulations related to investment in higher education. On October 5, 2024, the government issued Decree No. 124/2024/NĐ-CP, amending and supplementing several provisions of Decree 86/2018/NĐ-CP, which governs foreign cooperation and investment in the education sector. This decree, effective from November 20, 2024, notably introduces amendments and supplements to current regulations to establish branch campuses in Vietnam.

Firstly, there are two forms of foreign branch campuses in Vietnam:

With regards to eligible educational fields, foreign investors are only permitted to cooperate and invest in fields authorized by Vietnamese law, and are prohibited from investing in sectors related to security, defense, politics, and religion.

Secondly, several additional points regarding investment conditions have been outlined. According to Articles 33, 35, 36, 37, and 38 of Decree 86, supplemented by Decree 124, specific conditions for establishing university campus branches have been detailed:

Conditions for Investment Licensing:

Conditions for Investment Capital:

Finally, the procedures for establishing branch campuses have been revised to better support investors: 

(1) Apply for an Investment Registration Certificate from the competent authority (Article 34 of Decree 86/2018/NĐ-CP, as amended by Decree 124); 

For projects establishing campus branches of foreign higher education institutions in Vietnam, the Ministry of Planning and Investment consults with the Ministry of Education and Training and relevant agencies before submitting the proposal to the Prime Minister for approval; 

For campus branches of foreign-invested higher education institutions, the investment authority must seek evaluation from the Ministry of Education and Training.

(2) Obtain the permission of establishment (Articles 40 of Decree 86/2018/NĐ-CP,  amended by Decree 124 and Articles 44 of Decree 86/2018/NĐ-CP ): The Prime Minister has the authority to approve the establishment of campus branches of foreign higher education institutions in Vietnam, while the Minister of Education and Training is responsible for approving the establishment of campus branches of foreign-invested higher education institutions.

(3) Obtain the permission for educational activities (Article 47 of Decree 86/2018/NĐ-CP, as amended by Decree 124, on the issuance of permits for educational activities): The Minister of Education and Training grants permission for educational activities to higher education institutions, branches of foreign-invested higher education institutions, and branches of foreign higher education institutions in Vietnam.

Reassessing the Issue

Although the higher education market in Vietnam currently faces several limitations in its development, significant progress is anticipated in the near future due to the proactive efforts of the Vietnamese government in enhancing and refining legal regulations. This has created substantial opportunities for Foreign Direct Investors to penetrate this promising sector. However, to ensure optimal investment effectiveness and facilitate access, thorough preparation is essential, with the search for reliable consulting partners being a critical factor. Viettonkin is one of such organizations that can assist investors in completing procedural requirements, advising on the latest trends, and providing market updates. Let us help you make more informed and effective decisions.

Ever wonder how dynamic markets like Indonesia are shaping the future of foreign direct investment (FDI) and manufacturing? A new entity, Danantara Indonesia, has certainly captured my attention, and it’s a development that investors and business leaders should be watching closely.

With over two decades of guiding businesses through the vibrant, and at times complex, investment landscapes of Asia, including key markets like Vietnam, China, and Malaysia, I’ve seen numerous strategies unfold. The emergence of sovereign wealth funds and strategic investment agencies is a recurring theme, and Indonesia’s latest initiative, Danantara Indonesia, is a significant move. As IndraStra Global reported in February 2025, Danantara Indonesia has been established as a strategic investment management agency designed to optimize government investments and bolster the nation’s economic trajectory. This agency aims to act as a sovereign wealth fund, focusing on developing strategic industries and enhancing Indonesia’s global competitiveness. Danantara Indonesia also plays a pivotal role in helping to build national wealth through strategic investments and partnerships.

Here are some key takeaways about Danantara Indonesia:

By developing strategic industries, particularly within Indonesia's strategic sectors, Danantara Indonesia supports the national strategic plan to strengthen national industry and drive long-term economic growth.

Setting the Stage: Indonesia’s Economic Growth Trajectory

danantara indonesia economic growth

Indonesia’s economic growth story is one of ambition, resilience, and strategic foresight. Over recent years, the nation has prioritized developing strategic industries to strengthen its position in the global market, particularly as a key player in the electric vehicle (EV) battery supply chain. Central to this vision is the Indonesia Investment Management Agency (INA), a strategic investment management agency established to optimize government investments and support investment development across critical sectors.

As a sovereign wealth fund, Danantara Indonesia is at the heart of this transformation. Its strategic investment platform is designed to channel resources into high-impact areas, with a special focus on building a sustainable and integrated battery raw materials ecosystem. By leveraging Indonesia’s abundant mineral resources and advancing sustainable mining management practices, Danantara Indonesia aims to not only drive economic growth but also ensure that development is both responsible and future-proof.

This approach aligns with government investments and programs aimed at supporting sustainable development and fostering a value-added industrial foundation. By targeting strategic industries and optimizing the deployment of state assets, Danantara Indonesia is positioning itself as a catalyst for Indonesia’s next phase of economic expansion—one that balances profitability with environmental stewardship and long-term national interests.

The Catalyst: Role of the Indonesia Investment Authority

The Indonesia Investment Authority (INA) stands as a pivotal force in accelerating Indonesia’s economic growth and industrial transformation. As a strategic partner, INA brings together technical excellence and a proven global track record in sustainable mining management, making it a cornerstone in the nation’s efforts to develop strategic industries and support investment development.

INA’s investment focus is on empowering domestic investment institutions and optimizing government investments to unlock new opportunities in Indonesia’s strategic sectors. By fostering an environment that attracts high-quality investments, INA is committed to supporting sustainable development and environmentally conscious mining practices. This not only enhances Indonesia’s competitive advantages but also ensures that industrial growth is aligned with international sustainability standards.

The collaboration between INA and Danantara Indonesia exemplifies a shared commitment to driving world-class nickel downstream investment and supporting the development of a robust, sustainable industry. Through this partnership, both entities are working to strengthen Indonesia’s position in the global market, support the national energy transition, and deliver tangible economic value for the country. INA’s role as a strategic investment management agency is instrumental in ensuring that government investments are deployed efficiently, supporting resilient infrastructure and the growth of Indonesia’s strategic industries.

Market Insights: Danantara's Compass for Developing Strategic Industries

Danantara’s focus is clear: to support sustainable development and industrialization, particularly in sectors crucial to Indonesia’s future. This isn’t just about pouring capital; it’s about smart, targeted investment. The agency is zeroing in on downstream industries, especially in minerals and specifically nickel mining operations. Danantara is committed to the responsible management of earth mineral resources and actively supports the nickel downstream industry to ensure sustainable growth and value addition. The agency is also involved in large scale mining projects and the development of mineral and downstream industries, positioning Indonesia as a leader in future metals essential for the global energy transition. These efforts are instrumental in building a robust national EV ecosystem.

The South China Morning Post highlighted in early 2025 that Danantara’s launch has sparked questions regarding its economic impact and transparency, underscoring the keen interest and scrutiny such significant funds attract. The agency’s declared commitment is to sustainable mining management and environmentally conscious practices, a critical factor in today’s investment climate where ESG (Environmental, Social, and Governance) principles are increasingly becoming a game-changer.

Strategic Framework: Governance and Collaborative Synergy for Sustainable and Responsible Solutions

No investment vehicle of this scale can operate effectively without a robust regulatory and governance structure. The Indonesia Investment Authority (INA) is set to play a vital oversight role for Danantara’s investments and operations. This collaboration is crucial to ensure that investments are not only profitable but also aligned with Indonesia’s national energy transition goals and broader sustainable development ambitions. Achieving the country's energy transition goals requires addressing significant energy transition challenges, particularly in developing sustainable mining and downstream industries that support the EV battery supply chain. This approach, in my experience, is key to risk-proofing strategies in emerging markets.

Transparency and accountability are often concerns with large-scale government-backed funds. Danantara Indonesia aims to address this through commitments to regular public financial reports and independent audits. Furthermore, its governance structure, including a supervisory board chaired by the SOE Minister, is intended to provide effective oversight. Adherence to international sustainability standards isn’t just a talking point; it’s a necessity for attracting long-term, high-quality global partners. Danantara’s governance framework emphasizes global level technical capabilities and a commitment to sustainable and responsible solutions, ensuring that industry growth aligns with both environmental standards and Indonesia’s long-term development objectives. As reported by FDI Intelligence, such funds are under pressure to demonstrate tangible economic benefits and responsible management.

Leadership in Action: Steering Danantara’s Vision

At the helm of Danantara Indonesia is a leadership team dedicated to realizing a more sustainable future for the nation’s strategic industries. The company’s Chief Investment Officer (CIO) plays a central role in shaping investment strategies that prioritize sustainable development, efficient mobility solutions, and the advancement of Indonesia’s national energy transition goals.

A key partner in this journey is Eramet, a leading global mining and metallurgy company headquartered in France, which has been active in Indonesia since 2006. Eramet’s expertise in sustainable mining management and its commitment to environmentally conscious mining have been instrumental in developing Indonesia’s largest nickel deposit. This partnership not only supports the growth of the nickel sector but also underpins Danantara Indonesia’s efforts to build a sustainable industry that meets international standards.

Danantara’s leadership is also focused on supporting resilient infrastructure and more reliable telecommunications systems, recognizing that these are essential foundations for industrial growth and a more sustainable future. By attracting high-quality investments and fostering strategic collaboration with global mining leaders, Danantara Indonesia is setting a benchmark for responsible asset management and sustainable industry development. The company’s vision is clear: to support Indonesia’s transition to a greener economy while enhancing the nation’s competitiveness on the global stage.

Expert Insights & Stakeholder Perspectives

1. Pandu Sjahrir – Chief Investment Officer, Danantara

Pandu Sjahrir emphasizes Danantara's commitment to transparency, stating the fund will operate "like a public company" with full disclosure and audit standards. He highlights the professionalism of the team, asserting that members are "best in class" and would not risk their reputations for a project lacking substance. (Financial Times, 2025)

2. Jeffrey Sachs – Economist and Danantara Advisor

Jeffrey Sachs serves on Danantara's advisory board voluntarily, aiming to support Indonesia's sustainable development. His involvement underscores the fund's focus on long-term economic growth and sustainability. (Reuters, 2025)

3. Josua Pardede – Chief Economist, Permata Bank

Josua Pardede notes that the inclusion of prominent figures in Danantara's advisory board sends a strong signal about the fund's potential for robust governance. He suggests that the presence of such individuals acts as a deterrent against mismanagement, as their resignations would indicate issues within the organization. The Australian

4. Bhima Yudhistira – Director, INDEF

Bhima Yudhistira expresses concerns over the inclusion of controversial figures like Thaksin Shinawatra in Danantara's advisory board, citing past allegations of corruption. He warns that such appointments could undermine the fund's credibility and raise questions about its governance. The Australian

Impactful Alliances: Danantara's Strategic Partnership Blueprint

impactful alliances

Strategic partnerships are the lifeblood of ambitious FDI initiatives. Recently, INA announce strategic partnership with Danantara Indonesia and Eramet, with the managing director playing a key role in formalizing this collaboration. These collaborations are designed to accelerate investment development, particularly in the targeted nickel downstream industry. INA combines technical excellence and INA's investment focus to strengthen Indonesia's competitive advantages and strengthen Indonesia's position in the global nickel and EV battery supply chain. By working with both domestic investment institutions and global partners, Danantara seeks to amplify Indonesia’s competitive advantages.

The Straits Times mentioned in February 2025 that the fund is looking towards achieving significant growth targets, which will heavily rely on these strategic partnerships and the effective deployment of capital into these chosen sectors. Collaborations with state-owned enterprises (SOEs) are also part of the strategy to optimize government investments and ensure alignment with national development objectives. Indonesia's Geological Agency is actively involved in supporting mineral exploration, especially given Indonesia's largest nickel deposit, which is crucial for the nation's industrial ambitions. It’s a pragmatic approach: combine local know-how with international expertise and capital.

These strategic partnerships and the development of an integrated electric vehicle (EV) battery raw materials ecosystem support industrial growth and enhance Indonesia's competitiveness in the global market.

SWOT Analysis of Danantara Indonesia

Strengths:

Weaknesses:

Opportunities:

Threats:

Scenario Analysis

Best-Case Scenario:
Danantara successfully implements transparent governance practices, attracting substantial foreign investment. Strategic investments in infrastructure and technology sectors lead to sustainable economic growth, positioning Indonesia as a regional economic powerhouse. ASEAN Briefing

Base-Case Scenario:
Danantara achieves moderate success, with steady investment inflows and gradual improvements in SOE performance. While some governance challenges persist, the fund contributes positively to Indonesia's economic development.

Worst-Case Scenario:
Governance issues and political interference hinder Danantara's operations, leading to mismanagement of funds. Public trust erodes, and the fund fails to attract significant foreign investment, resulting in missed opportunities for economic growth.

The Path Forward: Opportunity and Vigilance for Economic Growth

So, is Danantara Indonesia a guaranteed catalyst for sustainable economic growth, or does it carry inherent risks? From my perspective, it possesses significant potential. Its strategic focus on high-growth, value-added industries like nickel processing, coupled with a stated commitment to sustainability and robust governance, positions it as a potentially powerful engine for Indonesia. Danantara's sustainable mining expertise is a key factor in ensuring long-term success and responsible resource management. The emphasis on downstream development is a smart move, akin to ensuring you not only own the mine but also the refinery and the factory, thus capturing a larger share of the economic pie.

The future outlook appears positive, with significant investments already earmarked for these strategic sectors. If Danantara can maintain its commitment to transparency, attract high-quality international partners, and navigate the complexities of large-scale industrial projects, it could indeed make a substantial contribution to Indonesia’s economic transformation and its journey towards a more sustainable and environmentally conscious economy. This is the kind of decisive, confident decision-making that can unlock growth potential.

Ready to unlock unprecedented growth by understanding these pivotal market shifts? Navigating the dynamic FDI landscape requires strategic insight that turns challenges into opportunities. Developments like Danantara Indonesia highlight the exciting potential within Southeast Asia.

Partner with us to transform challenges into strategic wins—because when it comes to securing your next breakthrough, the only way is forward! Let’s explore how your business can leverage these evolving opportunities. Invest in tomorrow’s breakthrough, today.

Introduction

The preschool education market in Vietnam has been experiencing robust growth in recent years. With the trend of international integration and a rising demand for quality education, more foreign investors are setting their sights on this sector. Notably, Southern Vietnam, characterized by its dense population and developed economy, has emerged as an attractive destination for Foreign Direct Investment (FDI) in preschool education. This article provides an overview of the market, current challenges, and opportunities for collaboration with Smiling Star School—a committed institution dedicated to delivering a high-quality educational environment for children.

An Overview of Vietnam's Preschool Education Market

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Photo: Educaid.be

Vietnam's preschool education market has achieved significant milestones in recent years. According to the Ministry of Education and Training, the country had approximately 15,256 preschool institutions by the end of the 2023-2024 academic year, with private schools accounting for 21% of the total. In particular, the Southern region has experienced a significant increase in the number of private preschools, addressing the growing demand for quality education from young families and the expatriate community. This development stems not only from domestic needs but also from rising FDI.

According to the Ministry of Planning and Investment, total FDI in Vietnam reached $15.19 billion in total FDI during the first half of 2024, showing a 13.1% increase compared to the same period last year. A significant portion of this investment was allocated to educational projects, particularly preschool education. International investors from Japan, Singapore, and South Korea are actively expanding their presence in major cities such as Ho Chi Minh City and Binh Duong, aiming to tap into this promising market.

Legal Framework for Foreign Investment in Vietnam's Education Sector

The recent updates to foreign investment regulations in Vietnam's education sector are outlined in Decree 124/2024/ND-CP, which revises and expands upon Decree 86/2018/ND-CP. A key provision requires that investors maintain at least 70% of their capital investment, even when utilizing rented facilities, along with a commitment to provide adequate investment over a five-year span (Article 35.6).

The decree specifies facility requirements, stating that lighting, furnishings, and educational resources must be appropriate for the curriculum. Additionally, ancillary spaces, such as health rooms and kitchens, must comply with safety standards (Article 36.2). Foreign educational programs are required to obtain quality accreditation in their home country and must align with Vietnam's educational goals, especially when catering to Vietnamese students (Article 37.1).

Administrative processes have been simplified through inter-agency data sharing, reducing costs, and saving time for investors. Nevertheless, stringent standards for quality accreditation remain in place to uphold transparency and maintain educational excellence.

Smiling Star: A Model for Smart Investment in a Changing Era

Legal issues continue to pose significant barriers for foreign investors entering the Vietnamese market. However, investors, such as Smiling Star Preschool, demonstrate resilience and acumen are determined to invest in Vietnam and spearhead a new wave of educational investment.

The Smiling Star Preschool curriculum originates from the Lion City of Singapore. Its educational programs are crafted to align with Singapore's Nurturing Early Learners (NEL) Framework with standards set by the Ministry of Education (MOE). This underscores Smiling Star’s capability as an investor in Vietnam’s education sector.

Smiling Star aims to establish itself as a leading brand in the region’s education sector. Its commitment to continuous learning and improvement to foster not only intellectual development in children but also their moral and life skills. The organization has demonstrated sharp market research capabilities and a keen awareness of trends. With a focus on establishing a presence in Vietnam, Smiling Star is eager to collaborate with local stakeholders to lay the groundwork for its international preschool system as the Vietnamese government gradually implements supportive policies for investors.

This illustrates that Vietnam remains an attractive market for prominent international education brands. Investors like Smiling Star recognize this potential and are strategically refining their plans to invest directly in Vietnam. Furthermore, Smiling Star and other prospective investors are paving the way for new FDI opportunities in the preschool education sector.

Conclusion

The preschool education market in Vietnam is on an upward trajectory, attracting increasing interest from foreign investors. This presents a promising opportunity for those looking to engage in the education sector in Vietnam, particularly as the demand for high-quality education continues to rise. Despite existing challenges, collaborations between international investors and educational organizations like Smiling Star can bring positive contributions to Vietnam's preschool education landscape. With strategic investments and partnerships, Vietnam's preschool education can not only meet domestic needs but also progress toward international standards.

Setting up a corporate bank account is the next crucial step after building a successful business. Businessmen in Indonesia have a wide selection of choices where they can put their money since the country has the most developed financial sector. These include state-owned, private, and foreign banks that offer different services to corporations in meeting their financial obligations. On one hand, a number of options are available, but on the other hand, choosing an appropriate bank that will meet your company's goals of operation and its long-term vision might be quite challenging.

It is quite important to realize the importance of a corporate bank account as it acts as the backbone for handling daily transactions, payroll, and investments in tandem with local regulations in the financial sectors. In addition, corporate accounts tend to offer certain services that are useful in cash management and exchange capabilities for foreign trade along with trade finance solutions, all of which may have great influence on the operation of an organization.

This article will explain what a corporate bank account is, outline major banks operating in Indonesia, discuss the criteria for the choice of bank selection, detail the documents required for opening, and describe the step-by-step process involved in opening a corporate bank account. This will give a better view to the businesses regarding how they have to proceed in dealing with banks in Indonesia towards their growth and stability.

Key Takeaways:

What is a Corporate Bank Account?

corporate bank account indonesia 2

According to Indeed, a corporate bank account is a specially designed financial account for businesses in the direction of managing their financial transactions and assets effectively (Indeed Editorial Team, 2023). Indeed is an online job search platform; it works like a job board and also acts as a recruitment tool.

It is a crucial facility for corporations, enabling them to organize their funds and conduct their monetary operations smoothly. By large, three basic roles are played by corporate accounts, including:

Savings

Companies use corporate accounts as a means of securing their funds, which are usually set aside for future expenses or investments. The accounts provide a safe place where businesses can deposit money that might be required for long-term proposals or capital projects.

Banking

Corporate accounts facilitate smooth daily financial activities, like the payment to vendors, payroll disbursement, and other business purchases. Centralization of such processes enables business enterprises to manage their banking transactions with more effectiveness for smoother financial operations.

Investing

Some companies invest their dividends or surplus revenue into corporate accounts that automatically reinvest such returns. This helps the company to increase its assets and probably improve profitability with strategic investment over time.

The Best Banks in Indonesia 2024

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According to Aspire, a fintech company which offers a wide array of financial services to enterprises and startups, and CNBC Indonesia, a global business news network, the best banks in Indonesia in 2024 maintained their dominance, especially in the corporate banking sector, where asset management is the key to their growth. This corresponds with information provided by Ekky Pramana (2024) and Muhammad Khadafi (2024).

The top banks by asset size in the first quarter of 2024 are Bank Mandiri, BRI, BCA, BNI, and BTN. These firms also continued to show consistent growth in assets during the period under review, with most of the Bank showing one-digit increases despite some posting double-digit increases such as Bank Mandiri and BRI.

Bank Mandiri

Among all, Bank Mandiri is one of the most popular choices for businessmen with flexible variants of corporate accounts, such as Mandiri Tabungan Bisnis. This account provides multi-currency options, outward RTGS and SWIFT transactions, a debit card with customizable limits, and many more.

Bank BRI

BRI is Indonesia's oldest state-owned bank and also one of the more popular options for corporate accounts, due to its presence in more remote areas compared to many of its competitors. Their BriTama Bisnis account offers higher transaction limits and free personal accident insurance for the business owners.

Bank BCA

Meanwhile, BCA has Tahapan Gold BCA, which caters to corporate demand with a competitive interest rate. Detailed transaction reporting is made available by SMS and email, among other financial solutions offered to corporations.

Bank BNI

What makes BNI Taplus Bisnis even more special is the offering of Gold and Platinum debit cards, in which every transaction is notified in real time, and the account is digitally manageable for ease for corporate clients.

Bank OCBC

For companies with international operations, OCBC NISP Business Smart Current Account boasts a very strong multi-currency option, enabling seamless global transactions.

CIMB Bank Niaga

For smaller businesses or SMEs, CIMB Niaga XTRA Savers offers an economical alternative with low initial deposits and services such as Auto Sweep and Pick Up, which are perfect for companies requiring only meager capital.

How to Choose a Bank for Your Corporate Account

corporate-bank-account-indonesia-4

In selecting a bank for opening a corporate account, one must consider many factors to get the right one that should apply to their financial and operational objectives. Herein is the stuff a business needs to consider when selecting a bank for a corporate bank account as suggested by Forbes Finance Council, an organization for senior-level finance executives created by Forbes (Forbes Finance Council, 2022).

Availability of Internet Banking

This would include internet banking availability and ease of transactions important to be provided for daily business operations based on convenience and efficiency of managing finances. Minimum deposit requirements and monthly fees are also important to be reviewed for affordability, especially for start-ups or small businesses.

Service and Amenities

Other factors, which are equally important, are the services and facilities provided, which may comprise customized corporate solutions, credit products, or cash management services that a company would need. Equally important, if not more so, is the reputation and reliability of the bank, particularly in the long run, as this may impact trust and confidence.

Currencies

For companies doing international business, the availability of types of currency used in transactions is crucial to reducing costs associated with foreign exchange. For companies attempting to align their financial decisions with ethics or values such as sustainability and community investing, bank values are also becoming increasingly important.

Security Features and Quality of Customer Service

Finally, security on behalf of the bank and the quality of customer service can make all the difference, particularly in a business that requires dedicated support or deals with sensitive financial information. Ensuring the bank provides top-notch protection combined with responsive and professional service helps forge a rewarding and long-term relationship.

Requirement to Open a Corporate Bank Account

Opening a bank account in the name of a company requires some legal and administrative documents, especially when that company is individually owned. Below is the general requirement, quoting Ekky Pramana, an experienced writer specializing in finance and business management at Aspire (Ekky Pramana, 2024):

1. Identity of Individuals and Companies

Personal identity is required, in which the person in charge of the company is using a valid identity, such as:

2. Company Registration Documents

Upon verification that the company is properly registered, it needs to provide a Surat Keterangan Usaha or an SKU. This will reflect the name, address, and the tax identification number of the company. Other supporting legal documents for registration include:

3. Corporate Documents

For businesses that are non-individual entities, such as PTs, foundations, or cooperatives, this would be adding more documents on top of the previous requirement list:

4. Financial Compliance and Tax Documents

The Company shall submit the NPWP along with NPWP of persons responsible for the account. Tax compliance is very crucial for any company intending to open a corporate account.

5. General Requirements

It cannot comprise individual or corporate entities blacklisted by Bank Indonesia. They should fill in and sign the bank account opening form. In respect of a specific business sector, a business permit in the relevant field of activity may be required as well.

6. Initial Deposit

Opening a corporate account usually requires an opening balance, which varies in size from bank to bank. For instance, the opening balances for both BNI Taplus and BRItama are IDR 1,000,000.

Also Read: All About Indonesia Corporate Tax Rate

Process of Opening of a Corporate Bank Account in Indonesia

Incorporating your corporate bank account in Indonesia involves, among others, the following steps that companies will have to go through.

Submission of Required Documents

This includes the photocopy of the certificate of business registration, tax identification (NPWP), articles of association, and identification of shareholders and authorized signatories, to be reviewed by the bank.

Bank Issues Board Resolution

A Board Resolution is issued by the bank for the appointment of an Authorized Person for the management of the account. This document must in turn be signed by the board and returned, usually via email.

Fully Accomplished Account Opening Form

The bank will provide an Account Opening Form, which the company completes with details of its structure and signatories. After completion, the form is returned to the bank for review.

Original Documents Submission

The company submits the original signed documents to the bank, which go into the official records. These documents include the Board Resolution and the Account Opening Form.

Initial Deposit

A minimum deposit of 1 million is required to activate this account. Multiple accounts can be granted in different currencies if deposits equal to the value are credited to this account.

Acitivize Account

To regard this an active account, a transaction should be frequently carried out on this account. If this account is left dormant for 6 months, it may be automatically deactivated.

Internet Banking

The company may enroll in web-based banking at the time of, or subsequent to the opening of an account, to ensure efficiency in managing the transaction.

Adherence to Laws and Regulations

The bank adheres to the regulations from OJK and Bank Indonesia. Other requirements, such as checks or documents, may be required.

Smoother Process of Opening of Corporate Bank Account in Indonesia

Opening of corporate bank accounts in Indonesia sometimes gets a bit tedious if not supported rightly. Viettonkin supports the companies with the right expertise to smoothen such a process and sees that all the local regulations are met with minimum delay.

From preparing the documentation to liaising with banks, Viettonkin's experienced consultants will help you through. We can offer you tailor-made services that will ensure your company's banking needs are taken care of as fast and effectively as possible, enabling you to focus on developing your business in Indonesia.

Contact Viettonkin today to smoothen your company's banking setup and achieve its expansion goals. To learn more about how the Experts for Expansion can help you, click here.

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Indonesia is not a country to look away from, considering it one of the growing business hubs in Southeast Asia. Understanding the Corporate Tax Rate of a country is important for local as well as foreign investors, but the journey of understanding the tax systems can be pretty tricky, especially in companies willing to extend their business to Indonesia.

In this blog, go through a detailed overview of Indonesia's corporate tax rates, factors that affect the calculation of corporate tax, and the reporting requirements of taxes.

Key Takeaways:

What is the Corporate Income Tax Rate in Indonesia?

indonesia corporate tax rate

The Corporate Tax Rate in Indonesia is a tax payment collected from companies. Corporate income tax in Indonesia is payable by the end of the fourth month following the close of the fiscal year, while corporate income tax returns are due to be filed on or before the end of the fourth month after the close of the fiscal year. The amount is based on net income they obtain while exercising their business activity, usually during one business/fiscal year.

Indonesia's Current Corporate Income Tax for 2024

According to the Government In accordance with Government-side revision of Article 2 of Regulation Of The Minister of Finance of The Republic Of Indonesia Number 40 of 2023, the government has confirmed and declared that the rate of Corporate Income Tax for Tbk Companies shall be 22% instead of the previous 25%.

Public Company Corporate Income Tax Rate

There are different tax rates for Public Company Corporate Tax Rate. If the public company meets the minimum listing requirement of at least 40% and other requirements, it gets a 3% discount on the standard rate, resulting in an effective rate of 19%.

Small and Medium Enterprises (SME) Corporate Tax in Indonesia

PWC is among the Big 4 accounting firms in Indonesia that shares just how Small and Medium Enterprises have tax relief (PWC, 2024).

Small businesses, i.e., corporate taxpayers whose annual turnover is less than 50 billion Rupiah, enjoy a 50% discount from the standard rate, levied pro rata on taxable income for total turnover up to Rp4.8 billion. Companies, whose total turnover is less than Rp4.8 billion, are charged a final income tax of 0.5% of their turnover.

PPh Foreign Companies in Indonesia

Based on Klikpajak.id, there are some of the obligations of taxation of foreign companies in Indonesia.

Income Tax (PPh)

Annual PPh for PE Companies: annual income tax rate of 22% from the income obtained.

PPh Article 26: Collected if the foreign company derives income from certain transactions such as dividends, interest including premiums and discounts and compensation in connection with debt collateral return, and others according to the provision. The income tax rate for foreign companies differs depending on the tax object. 

Value Added Tax (VAT)

In addition, foreign corporate taxpayers also have to be charged with value-added tax concerning the procurement or provision of taxable goods or services.

Presently, 11% is being used as the VAT rate. Pursuant to the HPP Law, the government intends to raise the rates in succeeding years.

As a taxpayer who conducts transactions of taxable goods or services, you must manage value-added tax, starting from invoicing for tax, depositing the amount that must be paid, up to filing SPT Masa PPN. 

You might also like: A Complete Guide to Business Licenses in Indonesia for New Companies

Factors Affecting Corporate Tax Calculation

Understanding the different factors that affect corporate tax calculation in Indonesia will help foreign companies to optimize their tax liabilities. Here's a closer look at key elements that impact corporate tax assessments.

Taxable Income vs. Gross Income

Difference Between Taxable Income and Gross Income

Gross income simply refers to the total revenue generated by a business prior to subtracting something. On the contrary, taxable income refers to the net income, which shall be levied against tax upon application of allowable deductions. Basically, taxable income will reveal an actual representation of the income earned by a company that must be levied to taxation.

How Indonesia Defines and Calculates Taxable Income

In Indonesia, taxable income arises from the gross income deducted by allowable expenses. The DJP has very stringent laws on what constitutes income and is hence subject to taxations. The business should keep accounting books to correctly and accurately record its income and any allowable deductions. For further details, visit the DJP website.

Double Taxation Treaties

How Double Taxation Treaties (DTTs) Reduce Tax Liabilities

Indonesia has signed numerous agreements related to the avoidance of Double Taxation Treaties with various countries, and such income shall not be subject to tax in more than one jurisdiction. These treaties also allow foreign investors to enjoy withholding tax rates on dividends, interest, and royalties at lower rates. By utilizing DTTs, companies can greatly reduce their overall tax liability.

Please refer to the DJP Double Taxation Agreement page on the official website for an exhaustive list of Indonesia's DTTs and their specific provisions.

What deductible expenses are companies' entities to?

Business expenses incurred for deriving income may also be deductible. This cost includes:

Depreciable/amortizable assets

The cost of the extension of rights of construction use, rights of business use, rights of usage, and a goodwill with a useful life more than one year, excluding the land held and used for business purposes

Organization and start-up expenditures

The organization's incorporation and capital expansion expenses are fully deductible in the year the expenditure was incurred or may be amortized at the above rates using either the straight-line or declining-balance methods.

All expenditures that have a useful life longer than one year, contracted prior to the beginning of business operations, are capitalized and amortized using the above rates.

Interest Expense

Interest paid in the ordinary course of business is deductible up to a limit if the loan is used for business purposes. Those methods which are commonly used overseas-the debt-to-equity ratio or the proportion of EBITDA-are appropriate for the limitation of the deduction of interest.

Interest on loans secured by time deposits are not deductible; this is because such income is subjected to final taxation.

It is also not deductible to pay interest on loans used in acquiring shares in which the dividends are not taxable as income.

Other Deduction

You can check detailed deduction expenses on the PWC website, here.

Corporate Tax Compliance and Reporting Requirements

indonesia corporate tax rate viettonkin

Of course, the need to understand corporate tax compliance and reporting in Indonesia becomes important. Particularly, foreign companies have to ensure that they are compliant with relevant legislation, thereby trying to avoid fines by knowing the exact requirements and deadlines.

See below for tax compliance and reporting in Indonesia.  

Filing Corporate Taxes in Indonesia

Annual Reporting Obligations

In Indonesia, filing a corporate tax return is required annually, typically by April 30th of the subsequent fiscal year. To support an Annual Tax Return [], the company needs to be prepared with documents that serve as proof of income received and deducted, including their tax dues. Companies are highly required to keep proper records to support reports. For more information, please see DJP Tax Reporting Requirements here.

Penalties for Non-filing

There are substantial penalties for failing to file on time. Corporate late filings can be assessed penalties of 2% to 4% per month, depending on the time elapsed, of the unpaid tax. Interest and additional taxes will also be owed on penalty filings that were filed incorrectly .

e-Filing and Internet sites

With the implementation of an electronic filing system that allows businesses to submit their tax return electronically, Indonesia has entered the digital era regarding tax administration. This platform has smoothened the filing process, whereby in turn, will ease things up for companies to comply better with the filing process.

See here for a Guide on Income Tax Return Filing by MSME Taxpayers.

How Does Indonesia Compare with Other ASEAN Countries?

In 2023, Indonesia's corporate income tax rate is 22%. For the other ASEAN countries, it is as follows, accordingly:

Tax Incentives and Holidays for Foreign Investors

Corporate Income Tax Incentives for Foreign Investor

Tax withheld or paid abroad by resident taxpayers in respect of income derived abroad may be credited against the tax payable in Indonesia within the same fiscal year.

Tax Holidays and Other Incentives

Tax Holiday

Capital investments up to IDR 500 billion may be allowed a tax holiday by MoF, whereby 100% of CIT may be exempted for five to twenty years. A company enjoys a 50 percent reduction of CIT for two years beyond the holiday period.

Businesses can also receive a five-year, 50% CIT discount for investments that total less than IDR 500 billion but over IDR 100 billion. For such companies, there is a follow-on reduction of 25% over the following two years.

Tax Allowance

The MoF can grant tax holidays to PT firms whose investments fall within specific areas. Benefits include:

A 30% reduction of net taxable income derived from investments in tangible fixed assets, apportioned over six years. The right to claim accelerated depreciation and amortization deductions. A reduced WHT rate of 10% on dividends paid to non-residents. An extended carry-forward for tax losses of up to ten years. CONDITIONS FOR APPLICATION: High value of investment or export-oriented. Generating a large number of jobs. High percentage of local value added content.

Applications for such benefits also need to be submitted through the OSS system and follow procedures for approval by the MoF.

Conclusion

In conclusion, understanding corporate tax rates is crucial for businesses looking to optimize their financial strategies and remain compliant with ever-evolving regulations. Whether you're a local enterprise or a multinational corporation, navigating tax complexities requires expertise. Viettonkin Consulting offers tailored services to help companies manage their tax obligations effectively, ensuring compliance and offering insights on minimizing tax burdens. 

By partnering with experienced consultants, businesses can focus on growth while staying ahead of tax challenges. Visit our website to learn more.

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Unveil the pillars of Vietnam's financial strength through the lens of blue chip companies. As stalwarts of stability and growth, these entities wield significant influence over investment portfolios, shaping the country's economic landscape. Join us as we delve into the intricate tapestry of Vietnam's stock market, deciphering the impact of these blue chip companies on investment strategies. Brace for a revealing journey as we offer a glimpse into the commanding presence of the top 10 blue chip companies listed on Vietnam's stock exchange.

Overview of Vietnam's Stock Market

For three consecutive years, Vietnam Report proudly presents the VIX50 Ranking, acknowledging the Top 50 esteemed and high-performing public companies. This recognition celebrates companies demonstrating financial prowess, sustainable development, governance excellence, and industry leadership. As of the ranking's release, the combined capitalization of these 50 enterprises represents over 57% of the entire market, boasting an impressive average ROE of 21.1% in 2022. The 5-year average compound growth rates for revenue and profit stand at 14.1% and 26.3%, respectively. With 29 enterprises exceeding $1 billion in capitalization, 25 surpassing $1 billion in revenue, and 43 achieving profits over VND 1,000 billion, the VIX50 highlights firms with robust financial foundations. This accolade aims to recognize their exceptional contributions in delivering quality products and services, fostering a positive public and investor perception. The unwavering support from the business community has positioned VIX50 as a premier platform for esteemed evaluations by investors, financial institutions, and the media.

As we delve into this article, our focus sharpens on the subset of these distinguished entities—the top 10 blue chip companies within the VIX50 Ranking. A keen analysis of these market giants reveals valuable insights into their strategic positioning, market capitalization, and key indicators.

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Blue Chip Companies in Vietnam

Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) - VCB

Vietcombank stands as the premier banking and financial services provider in Vietnam. Recognized both domestically and internationally, Vietcombank plays a pivotal role in fostering economic stability and growth. With over 560 branches and a robust business performance, Vietcombank continues to demonstrate its financial prowess. In 2019, the bank achieved remarkable results, with a total capital mobilization exceeding 1,039 trillion VND and a profit milestone of 23,155 billion VND. Vietcombank's strategic vision aims to secure its position as the No. 1 Bank in Vietnam, striving for global recognition among the top 100 banks in Asia.

PetroVietnam Fertiliser and Chemicals Corporation (PVFCCo) - DPM

PVFCCo, a subsidiary of the Vietnam National Oil and Gas Group, leads the Vietnamese fertilizer industry. With products meeting international standards, PVFCCo's "Phu My" brand dominates the market, boasting a market share of over 40%. The company's extensive distribution network and strategic warehouses ensure a stable supply, not only meeting domestic demands but also expanding into international markets such as New Zealand, Jordan, and Cambodia.

FPT Joint Stock Company - FPT

FPT, the largest Information Technology - Telecommunications Group in Vietnam, is a key player in software export, system integration, and IT services. With a global presence in 45 countries, FPT stays at the forefront of technology trends, including S.M.A.C. and IoT. In 2020, the company reported revenue and pre-tax profit of VND 29,830 billion and VND 5,261 billion, respectively, emphasizing its commitment to digital transformation and robust business model development.

Vietnam Technological and Commercial Joint Stock Bank (Techcombank) - TCB

Techcombank, aspiring to be the best bank in Vietnam, focuses on providing comprehensive financial solutions. With total assets reaching 383 trillion VND, a widespread service network, and cutting-edge technology, Techcombank aims to create Vietnamese pride. The bank's visionary strategy transcends profit goals, emphasizing a mission to contribute positively to society.

Military Commercial Joint Stock Bank (Military Bank) - MBB

Military Bank stands as a multifunctional financial corporation with 296 transaction points nationwide. Consistently profitable for over 26 years, Military Bank has weathered economic challenges and exceeded targets. In 2020, Military Bank's total consolidated assets reached VND 494,982 billion, showcasing its resilience and growth even in the face of the COVID-19 pandemic.

Vietnam International Commercial Joint Stock Bank (VIB) - VIB

With a retail proportion accounting for 90% of the credit portfolio, VIB distinguishes itself with a robust focus on individual customers. Rapid growth in retail loans, strong asset quality, and a diversified income structure position VIB as a market leader. The bank's efforts in the retail segment are evident in its outstanding growth, making it one of the top profitable banks in the industry.

Ho Chi Minh City Development Commercial Joint Stock Bank (HDBank) - HDB

HDBank, listed on HOSE since January 5, 2018, has swiftly become one of the leading banks in Vietnam. With a focus on a vast green ecosystem, HDBank offers a range of financial and banking services, contributing significantly to economic development. HDBank's commitment to technology and the Happy Digital Bank mission showcase its dedication to customer satisfaction.

Asia Commercial Joint Stock Bank (ACB) - ACB

ACB, a leading bank with diverse business lines, operates with principles of professional management and sustainable growth. With over 350 branches and a wide-reaching service network, ACB is committed to providing comprehensive financial services. The bank's subsidiaries and affiliates, including ACB Securities Company and ACB Financial Leasing Company, further contribute to its financial strength.

Vinhomes Joint Stock Company - VHM

Vinhomes, the No. 1 real estate investment, business, and management company in Vietnam, leads the market with sustainable development and premium service quality. Pioneering ideal living experiences, Vinhomes shapes a new lifestyle with meticulously planned residential areas. The company's transparency and efficiency align with its core values, contributing to the transformation of Vietnam's urban areas.

Duc Giang Chemicals Group Joint Stock Company - DGC

Duc Giang Chemicals Group is a front-runner in industrial chemicals, consistently striving for excellence. As a leading enterprise, Duc Giang Chemicals Group's focus on phosphate chemicals aligns with its ambition to produce compounds for pharmaceutical use. Specializing in the production of washing powder and detergents, the company adheres to ISO 9001:2000 standards, ensuring quality products for diverse applications.

co phieu bluechip la gi

Investment Insights and Strategies

The Blue Chip Advantage: Stability and Growth in the Stock Market

Investors seeking stability and growth in the Vietnam stock market find a compelling advantage in blue-chip companies. Blue chips, represented by the top-performing stocks, offer a reliable foundation for investment portfolios. These companies, often market leaders in their respective industries, have demonstrated resilience and sustainable growth over time. Choosing blue-chip stocks provides investors with a strategic approach to navigate market fluctuations, minimizing risks while fostering long-term wealth accumulation.

Investor Considerations: Analyzing Financial Health and Opportunities

Before delving into stock investments, prudent investors prioritize a thorough analysis of financial health and potential opportunities. Evaluating key financial indicators, such as earnings reports, debt-to-equity ratios, and cash flow statements, is crucial. Understanding a company's performance and its position within the market allows investors to make informed decisions. Additionally, staying abreast of market trends, regulatory changes, and macroeconomic factors contributes to a comprehensive investment strategy. By considering both micro and macro perspectives, investors can align their portfolios with the dynamic nature of the Vietnamese stock market.

Building a Robust Portfolio: Tips for Successful Stock Market Investment

Building a robust stock portfolio requires a strategic and diversified approach. Successful investors carefully select a mix of stocks across various sectors to mitigate risk and optimize returns. Diversification not only safeguards against industry-specific downturns but also capitalizes on emerging opportunities. Regularly reviewing and rebalancing portfolios ensures alignment with changing market conditions. Moreover, adopting a long-term perspective and staying disciplined during market fluctuations contribute to sustained success. Engaging with reliable financial advisors and leveraging analytical tools enhances an investor's ability to make informed decisions, ultimately paving the way for a resilient and prosperous stock market journey.

Final Thoughts

Concluding our exploration of the formidable impact of blue chip companies on Vietnam's stock market, it's apparent that these corporate giants form a secure basis for strategic investment. Highlighting their enduring importance adds depth to one's comprehension of the Vietnamese financial market. By acknowledging the stability and growth potential ingrained in these listed companies, investors can adeptly navigate the intricacies of the stock market. Consider harnessing Viettonkin's expertise to unlock opportunities and receive customized guidance in your investment journey within the dynamic stock market.

The Vietnamese stock market, a dynamic arena for financial growth, demands investor attention. Staying informed is the key to smart investment decisions. In this landscape, awareness is not just an advantage; it's a necessity. Join us as we unravel the intricacies of the Vietnamese stock market, providing insights into its current state, performance analysis, and emerging opportunities. Preview potential sectors and understand the necessity of continuous learning in this ever-evolving financial market. This guide prepares you for the exciting journey of strategic and informed stock investment in Vietnam.

Current State of the Vietnamese Stock Market

Market Participation and Foreign Investor Trends

Recent data from the Vietnam Securities Depository (VSD) reveals a vibrant landscape, with 8% of Vietnam's population, totaling 7.76 million individuals, actively participating in the stock market. In September 2023, 172,695 new stock accounts were opened, primarily by individual investors. Despite a slight decrease compared to the previous month, the numbers remain robust, marking the second-highest level in over a year. Foreign investors joined the fray with 253 new accounts, bringing the total to 42,711 accounts. Notably, a Q4 strategic report by KIS Vietnam Securities Corporation indicates heightened trading activities among foreign investors, reaching the year's peak. The market's liquidity soared, hitting an impressive US$1.5 billion in a recent session.

Factors Driving Stock Market Inflows

A crucial factor driving the influx of capital into the stock market is the declining savings interest rate. As the interest rates on savings decrease, experts forecast a continuing trend of investors redirecting nearly US$20.5 billion of maturing savings into the stock market. The decrease in deposit interest rates encourages more significant cash flows into the stock market, a trend that gained momentum in the second quarter of the year. With the anticipation of further interest rate reductions, domestic investors are increasingly diverting their funds from traditional bank deposits to more dynamic investment channels, including stocks. Additionally, positive forecasts for economic growth in the coming months further bolster investor confidence, anticipating a rebound in the business performance of listed firms.

Profits and Industry Dynamics

Despite short-term economic challenges impacting enterprise performance, certain industry groups are positioned for positive profit growth. Noteworthy sectors include steel, securities, oil and gas, and technology. In the securities sector, increased market liquidity in the third quarter has driven positive business results, particularly in the brokerage and lending segments. Steel businesses, which faced substantial losses in 2022, are witnessing improvements in the second half of this year. The oil and gas sector benefits from a recovery in oil prices, predicted to hover around $90/barrel. Forecasts suggest a positive outlook for oil prices due to demand recovery and ongoing reduction policies by Russia and OPEC+. Recent geopolitical conflicts also contribute to short-term support for oil prices.

stock maket

Emerging Opportunities for Stock Investors

Regulatory Environment and Market Transparency

The foundation for emerging opportunities in the Vietnamese stock market lies in a robust legal framework. The 2019 Securities Law, the 2020 Investment Law, and the 2020 Law on Enterprises, supported by guiding documents, foster optimal conditions for investment. These measures facilitate information accessibility in English, streamlined investor registration, and account opening, enhancing market transparency. The adherence to stringent settlement practices for violations and proactive English information disclosure, especially among VN30 Index businesses, reflects a commitment to market health.

Growth Stocks in Top Industries

Vietnam Report identifies the top six industries with the most promising growth stocks: Banking, Food Production, Power Production and Distribution, Oil and Gas Production, Tourism and Recreation, Pharmaceuticals, Construction, and Materials. The dynamic landscape is evident in the Top 50 prestigious and effective public companies of 2023, showcasing the remarkable ascent of the banking sector. The shifting ranks, marked by the emergence of Vietcombank and other key players, underscore the resilient performance of the industry despite challenges like the COVID-19 pandemic.

Influential Factors on Enterprise Reputation

Corporate liquidity and valuation stand out among the top factors influencing the reputation and efficiency of public enterprises in 2023. Surprisingly, dividend policy rises to the 6th position, emphasizing its growing impact on corporate governance. Consistent dividend payouts and growth rates serve as crucial indicators for investors assessing long-term financial stability. Communication-related factors also emerge as influential, underscoring the importance of effective corporate communication in shaping business prestige and effectiveness.

Key Considerations for Stock Investors

Crafting Effective Risk Management Strategies

In the ever-evolving stock market, effective risk management is critical for investors. Diversification remains a fundamental strategy to mitigate the risks associated with market fluctuations. Allocating investments across various sectors and industries can help safeguard portfolios from the impact of specific economic challenges. Additionally, staying informed about market trends, economic indicators, and geopolitical events enables investors to make proactive decisions. Regularly assessing risk tolerance and adjusting investment strategies accordingly ensures a balanced and resilient portfolio in the dynamic stock market landscape.

Staying Informed on Regulatory Updates

Regulatory updates wield significant influence on stock market decisions. Investors must stay abreast of any changes in securities laws, market regulations, and compliance standards. Proactive adaptation to regulatory shifts is crucial for maintaining compliance and making well-informed investment choices. Engaging with financial advisors and legal experts can provide valuable insights into the implications of regulatory changes. A thorough understanding of the legal landscape enhances investors' ability to navigate challenges, seize opportunities, and uphold ethical investment practices.

Navigating Market Volatility with Informed Strategies

Market volatility is inherent, and investors must navigate it with informed strategies. Establishing a long-term perspective helps withstand short-term market fluctuations. Setting clear investment goals and maintaining discipline in adherence to those goals contributes to a strategic and focused approach. During periods of volatility, identifying fundamentally strong stocks and adopting a patient investment strategy can yield favorable results. Embracing volatility as an inherent aspect of the stock market journey positions investors to make rational decisions and capitalize on opportunities that arise amidst market fluctuations.

Final Thoughts

In wrapping up our exploration of the Vietnamesestock market, we underscore the importance of adaptability and continuous learning for stock investors. The market's dynamic landscape offers both challenges and opportunities, demanding a strategic approach and effective risk management. As we navigate through key insights, it's clear that the Vietnamese stock market is ripe for strategic investment. For those seeking expertise in stock market analysis and comprehensive guidance, Viettonkin stands ready to assist. Seize the potential, enhance your strategic investing, and explore Viettonkin's support in your stock investment endeavors.

Embark on a transformative journey in workforce management with this insightful guide on hiring remote workers. Tailored for businesses embracing the trend of remote jobs, we explore the global dynamics of remote careers. Dive into the nuances of online jobs and the opportunities they present in the evolving landscape of the global workforce. Specifically focused on Vietnam, this article serves as a beacon for organizations keen on unlocking the potential of remote careers in this dynamic market, blending innovative strategies with the demands of the modern workforce.

The Landscape of Remote Work in Vietnam

Responding to the transformative shifts in the workforce, Q&Me Vietnam Market Research emphasizes a notable change in the professional landscape of Vietnam. The appeal of working from home is driven by factors like improved working flexibility, a more laid-back ambiance, and the independence of self-management. This indicates a growing inclination towards embracing the advantages of remote work. Interestingly, a substantial 80% of respondents express the wish to continue some form of remote work post-pandemic, with 20% aspiring for a fully remote work arrangement. The motivations behind this preference include the elimination of commuting hassles and the paramount importance of flexibility, both in terms of time and work style. These statistics highlight a profound transformation in the work environment, with the adoption of remote careers becoming a pivotal aspect of the modern professional landscape in Vietnam.

The Landscape of Remote Work in Vietnam
The appeal of working from home is driven by factors like improved working flexibility, a more laid-back ambiance, and the independence of self-management. Source: Internet

Guide to Hiring Remote Workers in Vietnam

Legal Insights: A Guide to the Legality of Hiring Remote Workers in Vietnam

Navigating the landscape of hiring remote workers in Vietnam requires a thorough understanding of the legal aspects. The country's legal framework is adapting to the growing trend of remote work, and employers must comprehend the regulations to ensure compliance and avoid legal complications. Key considerations include taxation, labor laws, and data protection regulations. Seeking legal counsel or partnering with expert consulting firms can provide invaluable insights to navigate the legal intricacies and foster a smooth remote hiring process.

Sourcing Talent: Tips for Remote Careers in the Vietnamese Market

As the demand for remote talent grows, effectively sourcing the right candidates becomes a crucial aspect of the hiring process. Understanding the Vietnamese market and its pool of remote professionals is essential. Leverage local job platforms, professional networks, and collaborate with recruitment agencies familiar with the nuances of remote hiring. Highlighting the benefits of remote work, such as flexible schedules and a results-driven approach, can attract top-tier talent.

Employment Contracts: Ensuring Compliance and Best Practices for Remote Jobs

Crafting comprehensive employment contracts is instrumental in fostering successful remote work arrangements. Clearly outlining expectations, responsibilities, and communication protocols helps establish a foundation for effective collaboration. Additionally, addressing compliance with local labor laws, intellectual property rights, and data security in the employment contract is crucial. Employers should ensure that the contract reflects the specifics of remote work, covering aspects like working hours, communication tools, and performance metrics. Guidance from legal experts can enhance the credibility and sustainability of remote jobs, providing businesses with the framework for successful and compliant remote work engagements.

Guide to Hiring Remote Workers in Vietnam
Crafting comprehensive employment contracts is instrumental in fostering successful remote work arrangements. Source: Internet

Contracting Remote Workers: Best Practices

Crafting Agreements: Best Practices for Hiring Remote Workers

Crafting robust agreements is a cornerstone of successful remote work engagements. Article 20 of the Labor Code 2021 has introduced significant changes by eliminating seasonal labor contracts and those with a term of less than 12 months. Now, employers primarily have two contract options: indefinite term and fixed term labor contracts. An indefinite term contract involves parties without specifying the contract's duration or termination time, while a fixed term contract allows parties to determine the term and termination time within a maximum period of 36 months from the contract's effective date.

Key Elements in Remote Jobs Agreements: A Comprehensive Overview

Remote job agreements are multifaceted, requiring a comprehensive approach for success. The Labor Code 2019, in alignment with technological advancements, introduces the option of entering into labor contracts through electronic means. According to Clause 1, Article 14, a labor contract entered into via electronic means, such as a data message, is legally valid and holds equal weight to traditional labor contracts. This innovation facilitates the remote hiring process, streamlining administrative tasks and enhancing efficiency.

When delving into the contents of employment contracts, employers must ensure clarity and completeness. The major contents include the employer's details, the contracting person's information, job specifics, contract duration, salary details, promotion and pay raise policies, working hours, rest periods, provisions for personal protective equipment, and crucial considerations like social insurance, health insurance, and unemployment insurance. The emphasis on basic and advanced training underscores the importance of continuous skill development for remote workers.

Addressing Challenges: Solutions for Seamless Remote Work Contracting

Navigating challenges in remote work contracting is integral to ensuring a seamless and productive collaboration. The legal framework, as per the Labor Code, provides a foundation for structuring contracts effectively. Employers should adapt to the revised contract types, understanding the nuances of indefinite and fixed-term contracts to align with business needs.

Incorporating electronic convenience into the contracting process, as endorsed by the Labor Code 2019, enables expeditious contract execution. Employers should leverage electronic means judiciously, ensuring compliance with legal requirements for data messages. With a focus on contract clarity and completeness, employers can foster a positive remote work environment, addressing challenges through proactive measures and reinforcing a robust foundation for remote work engagements.

Contracting Remote Workers Best Practices
Navigating challenges in remote work contracting is integral to ensuring a seamless and productive collaboration. Source: Internet

Notes for Recruiters Engaging Remote Talent in Vietnam

Management Guidelines: Effectively Hiring Remote Workers

Effectively engaging remote talent involves navigating various regulations and establishing robust management guidelines. Recruiters must provide clear instructions on acceptable work locations, emphasizing that an employee's private home is the designated place for implementing the online working model. Should an employee choose to work from an alternative location, the employer is absolved of legal responsibilities regarding labor safety and occupational accidents during working hours.

Building Culture: Tips for Fostering a Positive Remote Work Environment

The management of remote teams extends to regulations on working time, providing flexibility for employees while ensuring efficiency. Employers can adopt a goal-oriented approach, allowing employees to manage their time based on completion deadlines rather than strict hours. This not only promotes a healthier work-life balance for employees but also exempts employers from mandatory overtime payments, provided tasks are accomplished promptly and effectively.

Challenges and Solutions: Ensuring a Smooth Experience in Remote Jobs

Ensuring the protection of business secrets and technological confidentiality holds utmost significance in the realm of online jobs. Employers should provide guidance to their workforce on information security protocols, emphasizing the utilization of company-provided equipment and tools instead of personal devices. Furthermore, establishing explicit regulations for addressing and compensating damages resulting from non-compliance with confidentiality instructions becomes a critical necessity. This pertains to situations where employees compromise business secrets or technological information, reflecting the repercussions akin to the disclosure of such confidential data.

In summary, meticulous adherence to regulations concerning work locations, innovative strategies for time management, and a steadfast commitment to securing business secrets form essential components of effectively involving remote talent in Vietnam. By following these directives, recruiters actively contribute to cultivating a positive and legally compliant environment for remote jobs.

Final Thoughts

In conclusion, this comprehensive guide sheds light on the intricacies of hiring remote workers in Vietnam. As we navigate the evolving landscape of remote jobs, it's essential to embrace the future of work and unlock the vast potential in Vietnam. Viettonkin stands as your partner, offering expertise in remote careers management. Connect with us to explore tailored solutions, strategize successful hiring of remote workers, and elevate your business in the dynamic realm of remote jobs.

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Vietnam's dynamic banking sector is a top destination for foreign investment. To succeed, you need a deep understanding of the local landscape, from new regulations to market entry models.

Our eBook, "ESTABLISHING FOREIGN BANK PRESENCE IN VIETNAM" gives you the crucial insights you need, including:

  • 2024–2025 Sector Overview: Key economic and banking industry analysis.
  • Step-by-Step Entry Guidance: A deep dive into all primary market entry modes.
  • The Latest Legal Updates: Critical regulatory changes taking effect in 2025.
  • Smart Investment Strategies: Insights on M&A, strategic equity, and Fintech.

Download now for the expert knowledge to invest with confidence.

Entering Vietnam's Banking Market: Get Your Essential 2025 eBook 

Vietnam's dynamic banking sector is a top destination for foreign investment. To succeed, you need a deep understanding of the local landscape, from new regulations to market entry models.

Our eBook, "ESTABLISHING FOREIGN BANK PRESENCE IN VIETNAM" gives you the crucial insights you need, including:

  • 2024–2025 Sector Overview: Key economic and banking industry analysis.
  • Step-by-Step Entry Guidance: A deep dive into all primary market entry modes.
  • The Latest Legal Updates: Critical regulatory changes taking effect in 2025.
  • Smart Investment Strategies: Insights on M&A, strategic equity, and Fintech.

Download now for the expert knowledge to invest with confidence.

Download E-Book

About Us

Founded in 2009, Viettonkin Consulting is a multi-disciplinary group of consulting firms headquartered in Hanoi, Vietnam with offices in Ho Chi Minh City, Jakarta, Bangkok, Singapore, and Hong Kong and a strong presence through strategic alliances throughout Southeast Asia. Our firm’s guiding mission is aimed towards facilitating intra-ASEAN investments and connecting investors in Southeast Asia with the rest of the world, thus promoting international business relationships and strengthening inter-nation connections.
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