Using Business Process Outsourcing in Vietnam to expand to new markets

How can business process outsourcing optimize your business and increase your company’s performance? Here are some of the top reasons why you should consider outsourcing to Vietnam.

Outsourcing is not only about reducing costs. Outsourcing can allow your company to be more efficient and productive. How can outsourcing to Vietnam optimize your business and increase your company’s performance? This article lists some of the top reasons why you should consider business process outsourcing in Vietnam.

Table of contents

    What is business process outsourcing?

    Business process outsourcing (BPO) is delegating business activities to a third-party service provider.

    Some activities a company can outsource:

    • Accounting and payroll
    • Due diligence
    • Employer of Record

    Types of business process outsourcing

    There are three major categories for business process outsourcing:

    • Onshore outsourcing. When the outsourced service provider is in the same country.
    • Nearshore outsourcing. When the outsourced service provider is in a nearby country. For example, when a business in China outsources activities to Vietnam.
    • Offshore outsourcing. When the outsourced service provider is in a distant country. For example, when a business in the United States outsources services to Vietnam.

    4 ways BPO can improve your business

    #1 Saves money on your overhead expenses

    Businesses may cut costs by outsourcing services.

    For example, instead of hiring a dedicated payroll staff member, they can outsource payroll management which reduces costs on salary. The business will also not need to purchase accounting and payroll software meaning more savings for the company. Same goes for accounting and tax reporting, and with many other non-core operations.

    #2 Allows you to be more productive

    When you outsource non-core activities, you have more time to focus on improving your business and working on main activities. This is good because being more productive allows your business to be more competitive.

    #3 Gives you better results in non-core activities

    Many starting businesses cannot afford to hire in-house specialists to complete certain tasks. BPO providers connect you with knowledgeable professionals who will deliver high-quality services. Finding an excellent service provider means getting better results.

    #4 Enables you to expand to new markets faster

    The timeframe to set up a company can be quite long when entering a new market. This is especially true for emerging markets such as Indonesia, Vietnam, or the Philippines. Getting all the relevant documents, permits, and licenses can take several months, depending on your business classification.

    But with business process outsourcing, you can start your business activities instantly. A service provider like Emerhub can hire staff on your behalf with the employer of record service. The importer of record service allows you to start importing goods immediately. Accounting and tax reporting services ensure that everything complies with the laws.

    BPO service providers are also able to assist you in local hiring. Your BPO service provider already knows the local hiring market. Their expert knowledge in this area means businesses will be able to hire employees without having to deeply familiarize themselves with the local market.

    #5 Hire full-time employees in remote markets

    Through the employer of record service, it is possible to hire full-time employees abroad without setting up an office in their location.

    As the employer of record, your BPO service provider will handle the following:

    • Recruitment and background checks
    • Employment contracts
    • Payroll
    • Tax filing for employees

    The employer of record service makes it easy to hire and manage staff, no matter where they are in the world. With this arrangement, the employee gets to enjoy local employment benefits. This makes the employee more likely to stay with the company for a long time.

    Business process outsourcing in Vietnam

    Vietnam is a country that has undergone a remarkable transformation in the past few decades. In addition to the openness of the market and regulatory changes that attract foreign direct investment, Vietnam has become a destination for outsourcing different types of business processes as well.

    In the 2019 Kearney Global Services Location Index, Vietnam ranked 5th in offshore business services. The country is home to a highly-skilled workforce that continues to grow. The country is also putting a lot of focus on higher education and English proficiency, the research says.

    Despite placing more importance on English proficiency, the 9th edition of the EF English Proficiency Index ranks Vietnam in the 52nd spot out of 100 countries across the globe. The same index ranks Vietnam 10th out of 25 countries in Asia. For processes highly dependent on communicating in English, outsourcing to the Philippines might be a better idea.

    However, English proficiency is not essential for many BPO services in Vietnam since Emerhub’s managers handle them.

    Low labor costs

    Despite the stable economic growth, minimum wages in Vietnam still remain relatively low. The minimum wage in Vietnam ranges from about USD 130 to USD 190 per month, depending on the region in which the company operates. For comparison, this is about half of the minimum wage in China.

    Besides becoming a lower-cost alternative for manufacturing companies, Vietnam has also emerged as an outsourcing destination for back-office services like accounting and payroll.

    Young and growing workforce

    The median age in Vietnam is 32.5 years old, according to Worldometers. An overview of Vietnam written by the World Bank states that 70% of the country’s population is under 35 years old. This shows that most of Vietnam’s population is part of the workforce making it a great place to hire employees.

    Vietnam invests around a fifth of its finances in education. This is more than many other countries at a similar level of development do. This makes Vietnam ripe with educated and skilled workers.

    Outsourcing IT and Software Development to Vietnam

    The technology sector of Vietnam is growing and the country is a new technological outsourcing hotspot in Asia. Tax incentives for businesses related to technology have attracted a lot of investors, among other reasons.

    Giants like Samsung, LG, and Google have already moved some of their operations to Vietnam. The 2019 Kearney Global Services Location Index backs this up by listing Intel and Microsoft as some of the country’s investors. It also notes that Japanese IT companies outsource services to Vietnam a lot. This shows how strong the IT sector in Vietnam is.

    Because of Vietnam’s focus on technology, there are a lot of software developers and IT staff you can hire. Emerhub offers the employer of record service which allows businesses to hire remote staff without setting up operations abroad. Hire a software developer in Vietnam through Emerhub by filling out the form below.

    BPO to Emerhub

    Outsource your business activities to the reliable and educated workforce of Vietnam. Emerhub offers BPO services like the following:

    ServiceWhat we do
    Accounting and tax reportingWe take care of everything related to accounting and tax reporting, from setting up accounts to submitting your financial statements.
    Due diligenceWe collect and review all the relevant information regarding your future business deals.
    Payroll managementWe calculate salaries and make payments on your behalf.
    Importer of RecordWe import your products to Vietnam using our licenses.
    Employer of RecordAs your employer of record in Vietnam, we will find you a person or a team that will work full time for you.
    Product Registration and Nominee RegistrarWe register your products under our import company allowing you to use us as your nominee registrar and import your goods to Vietnam

    Outsource your business activities to Vietnam by emailing us at [email protected]. You can also fill out the form below to further discuss how we can help to reduce your costs and improve your business.

    Let's grow your business in Vietnam

    Emerhub has years of experience with employer of record in Vietnam.

    Get in touch with Emerhub by filling in the form below and our consultants will reach out to you within a few working hours.

    employer of record in Vietnam

    Helped to set up my first company in Vietnam

    I really like and appreciated the support and help from Ms. Uyen and the team. The responses were fast and clear and helped me to set up my first company in Vietna,

    Jasmine Chau
    CSO & CMO, italianatelier.it

    Very helpful at every stage of the company registration process

    Alex, Tran, and Ha were very helpful at every single stage of our company registration process. They took their time to explain, to translate, and help to select the appropriate options for our activity.

    Alexandre Portier
    Vietnam National Representative, IC Pharma

    Responsible and very supportive

    Collaboration with Emerhub Vietnam has been excellent at all times. Responsible, fast-acting and very supportive concerning the whole ongoing process. We highly appreciate working together with Emerhub and are able to recommend it with pleasure. Here I have to name Thinh Phat Tran for great service, many thanks!

    Liza Boehm
    Hemmersbach

    Search Emerhub blog