Tiếng Việt
Software outsourcing is increasingly becoming a strategic choice for businesses that want to scale quickly, optimize costs and still maintain quality. Alongside that trend, the Onshore model is emerging as a preferred outsourcing approach when the challenge is not only cost efficiency but also close collaboration, real time flexibility and a deep understanding of the domestic market.
What is the Onshore model?
Software outsourcing under the Onshore model means that a business hires a software development provider located within the same country, specifically Vietnam in this context.
Unlike the Offshore model, which involves hiring companies based overseas such as in India, Ukraine or the United States, and the Nearshore which involves vendors in nearby regions like ASEAN countries including Thailand or Malaysia, the Onshore model significantly reduces barriers related to language, time zones, legal frameworks and unclear hidden costs.
Advantages of Onshore software outsourcing services: almost like working in the same office
Extremely convenient communication and feedback
- No language barriers: business requirements and specialized workflows can be communicated clearly and accurately.
- Offline meetings can be arranged when needed: this is especially important for projects that require close cross department collaboration.
Deep understanding of the local market and domestic characteristics
- Onshore partners are capable of deeply understanding corporate culture, local user behavior, accounting standards, electronic invoicing standards and domestic legal regulations such as:
- Cybersecurity Law.
- Tax and electronic invoice regulations (Decree 123/2020/NĐ-CP).
- System integration standards with government authorities such as the General Department of Taxation and Customs.
Clear legal framework and easier dispute resolution
- Contracts governed by Vietnamese law: making litigation and liability enforcement more straightforward.
- Minimized risks of fraud or source code loss after contract termination.
Security and quality control
- Ability to require NDA agreements, on site source code reviews or security deployment: in accordance with ISO/IEC 27001 standards within Vietnam.
- Onshore vendors typically provide detailed documentation, guidance and training in Vietnamese.
Limitations of the Onshore software outsourcing model: not suitable for every budget
Costs are no longer “as cheap as in the early days”
- Compared to Offshore outsourcing in countries such as Bangladesh or Pakistan, labor costs in Vietnam, especially in major cities like Hanoi and Ho Chi Minh City, have increased significantly.
- A software engineer with 3 to 5 years of experience in Hanoi currently costs around 25 to 40 million VND per month, equivalent to approximately 1,000 to 1,600 USD per month.
Quality disparity among companies
- The domestic outsourcing market shows significant variation in quality. Some companies operate very professionally, applying Agile, DevOps and holding international certifications, while many freelancer groups still label themselves as “software companies” despite lacking proper project management capabilities.
- There is no publicly recognized and credible ranking system like Clutch.co specifically for Vietnamese software companies.
Limitations in advanced technological capabilities
Some Onshore companies in Vietnam still mainly focus on basic website or mobile app projects.
For complex projects such as AI, blockchain, highly distributed systems or Big Data processing, the number of domestic companies with sufficient capabilities remains limited.
When should Vietnamese businesses choose the Onshore model?
- When the product targets domestic users: and requires deep understanding of local market insights.
- When integration with government management systems is required: such as Tax, Customs or Banking systems.
- When the project involves clear legal obligations: and contracts need to be signed in Vietnamese.
- When rapid development is needed: with reduced communication risks and the ability to meet in person when necessary.
- When the business lacks an internal IT department: and needs a full service partner providing end to end support in Vietnamese.
Cost of hiring Onshore services in Vietnam
Below is a reference pricing table for domestic Onshore software outsourcing services in Vietnam (updated 2025):
| Service type | Average cost | Notes |
| Corporate website | 20 – 80 million VND | Responsive design, integrated CMS |
| Mobile application (iOS/Android) | 100 – 300 million VND | Depending on complexity |
| Internal ERP system | 300 – 800 million VND | Depending on modules: accounting, inventory, HR |
| Public API integration system | 200 – 500 million VND | Tax, social insurance, banking, etc. |
| Long term dedicated dev team package | 20 – 60 million VND/dev/month | Usually requires a 3–6 month contract |
Note: these costs do not include VAT and may vary depending on location and working model (onsite or remote).
Onshore software outsourcing process in Vietnam
Onshore software outsourcing today is no longer just about signing a contract and waiting for the product to be completed and delivered. To ensure progress, quality and transparency in collaboration, professional technology companies in Vietnam typically implement a six step process.
Step 1: Requirement intake and preliminary analysis
- The business presents its needs: what the product is, expected functions, usage goals, target users and desired deadline.
- The Onshore vendor conducts a preliminary analysis: requirement complexity, suitable technologies for the business, and the possibility of reusing existing platforms or modules.
Deliverables: initial business requirements document (BRD – Business Requirements Draft).
Step 2: Solution consulting and preliminary quotation
- Technology consulting: helping the business determine which technology stack to use (web or mobile, native or hybrid, PHP, NodeJS, Java, etc.).
- Proposed implementation approach: timeline, cost and resources. Software outsourcing companies may organize demo sessions of similar completed products to help the business evaluate and make decisions more easily.
Deliverables: technical proposal, preliminary quotation and initial implementation schedule.
Step 3: Detailed analysis and contract signing
- The outsourcing vendor works with the business to develop a detailed specification (SRS – Software Requirements Specification), clearly dividing project milestones such as design, development, testing and acceptance.
- Both parties finalize and sign the contract, covering timeline commitments, payment terms, confidentiality (NDA), change handling and source code ownership.
Deliverables: official contract, SRS and detailed development plan.
Step 4: UI/UX design and system architecture
- Interface design in accordance with the company’s brand guidelines.
- User flow mapping, wireframes and mockups.
- System architecture design including database, API, security and access control.
Deliverables: Figma design files and system architecture diagrams.
Step 5: Development, testing and periodic updates
- Development follows Agile/Scrum or Waterfall models depending on agreement.
- Internal testing including unit tests and integration tests, followed by delivery of a user acceptance testing version to the client.
- Weekly progress updates, with access to Git repositories or task dashboards for tracking.
Deliverables: source code updated by sprint, progress reports and test versions.
Step 6: Acceptance, handover and maintenance
- The business conducts acceptance testing based on each function.
- Handover of source code, documentation and deployment environments.
- Maintenance support according to contract terms, usually 1 – 6 months free of charge.
Deliverables: complete source code, user manuals, admin guides and maintenance contracts if applicable.
Notes during implementation
- A single technical point of contact should be designated from the business side to coordinate continuously with the outsourcing vendor.
- For projects longer than three months, it is advisable to divide the project into two or three smaller phases to improve control and feedback efficiency.
- Use tools such as Jira, Notion or Trello to ensure transparency in the development process and allow both sides to track progress in real time.
How to choose a reputable Onshore software development partner in Vietnam
Review legal entity status and actual capabilities
- Request the business registration number and verify the business license.
- Review the company profile, completed products and request real demos.
Prioritize partners with industry relevant experience
- For example, a company specializing in healthcare systems should be capable of developing clinic management software.
- A company that has worked with banks will better understand financial security standards.
Contracts must be clear and detailed
- Clearly specify scope of work, implementation timeline, warranty responsibilities and source code handover.
- Include financial commitments with milestone based payment terms.
Quick comparison of Onshore – Offshore – Hybrid models in Vietnam
| Criteria | Onshore (domestic) | Offshore (international) | Hybrid (combined) |
| Communication | Easy, Vietnamese | English | Vietnamese management, foreign dev team |
| Cost | Medium to high | Low to very low | Medium |
| Legal framework | Clear, easy to litigate | Dispute resolution is difficult | Combination of both |
| Security capability | Easy to control | Dependent on NDA commitments | Requires strong oversight |
| Suitable for | Domestic SMEs | Global startups | Companies with IT managers |
Conclusion
Onshore software outsourcing in Vietnam is a reasonable choice for businesses that want direct collaboration, legal assurance, deep understanding of domestic users and easier quality control. However, do not confuse “being close” with “being sufficient”. Businesses still need to carefully assess capabilities, define requirements clearly and closely monitor progress.
If a business needs to develop software systems for the Vietnamese market, integrate with government authorities or meet high security requirements, the Onshore model is absolutely worth considering as part of its strategic decision making.
Frequently asked questions (FAQ)
Does Onshore software outsourcing require on site work?
No. Many Onshore partners still work remotely within the same country, with flexible arrangements based on agreement.
Is Onshore always more expensive than Offshore?
In most cases, yes. However, some markets such as Eastern Europe or certain Southeast Asian countries have competitive average costs and may still be considered Onshore if they are within the same country.
Are Onshore freelancers reliable?
They can be for small projects. However, for large projects, businesses should choose partners with clear legal entities to avoid risks.
Is the Onshore – Offshore hybrid model common?
Very common. Many businesses currently use a model where the Product Owner is based in the United States while the development team is in Vietnam, optimizing costs while maintaining quality.
