Representatives from Vietnamese and Japanese software companies have agreed to form a joint-venture company with the aim of outsourcing some software development to Vietnam, a Vietnamese government report said Tuesday.

Vietnamese programmers will develop software, which will be sold by the Japanese software partners to Japanese end users. Six Vietnamese and seven Japanese companies will be involved, according to the report.

The company will be known as Vietnam-Japan Software Gate (Vijasgate) and has been founded with US$1.5 million in investment capital. The joint-venture company will shortly apply for a business license and will begin operation in January 2004. The first phase of the project will consist of sending Japanese-speaking Vietnamese software engineers for training with Japanese software companies, the report said.

The Vietnamese companies involved are the Corporation for Financing and Promoting Technology (FPT), CMC Group, Hai Hoa Co., Dan Phong Co., Niem Tin Co. and Elcom Co. Ltd. The Japanese companies were not all named, but NEC Corp., Hitachi Ltd. and TIS Inc. have existing software development deals with FPT, which they will expand next year, the report said.

The company will be headquartered in Hanoi with a branch office in Tokyo, according to the report.

Vietnam is keen to build up its software industry to exploit a large pool of computer-literate workers, and has had some success in the U.S., largely through expatriate Vietnamese organizations.

The agreement follows a visit to Japan in September made by Vietnam Software Association (Vinasa) whose members include the six companies involved in Vijasgate.