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Vietnam is one of Southeast Asia’s fast-emerging economies, boasting significant growth over the last few decades, predominantly due to market liberalization and economic reforms (Doi Moi) initiated in the late 1980s. The government has been focusing on promoting foreign investment, enhancing infrastructure, and creating favorable conditions for business operations.
As of 2020, Vietnam has showcased impressive economic figures. The GDP stood at around USD 340 billion, and the country maintained a reasonable GDP growth rate, even amidst the global pandemic, demonstrating economic resilience. The major economic drivers are manufacturing and export of electronics and textiles, followed by services and agriculture sectors. The Vietnamese government aims for a more sustainable growth pathway, focusing on improving the quality of growth rather than just accelerating economic expansion.
Vietnam offers a plethora of reasons to invest and do business in the country. Some of these include a young and skilled labor force, a strategic geographical location with access to significant global trade routes, and a steadily growing market with increasing disposable incomes. Moreover, the government is initiating various incentives and support programs to encourage business enterprises and foster a more competitive business environment.
Understanding the Vietnamese business culture is pivotal for successful ventures in the country. Relationships and trust are significant aspects of business dealings in Vietnam. Initial meetings often focus on getting to know each other, while business discussions take a back seat. A hierarchical approach is common in organizations, and decisions are usually centralized. It is customary to address individuals using their titles followed by their first names.
In Vietnam, networking is a vital aspect of business success, and it usually revolves around personal relationships and connections. Building a robust network can be facilitated through attendance at industry events, seminars, and being part of business chambers and associations. Leveraging these networks can open doors and foster business opportunities.
When planning to hire in Vietnam, it is essential to be acquainted with the labor laws that dictate the terms of employment. The Labor Code of Vietnam sets the statutory framework for all employment-related matters, including contracts, working hours, and benefits. Many companies opt to hire locally due to the availability of a young and increasingly skilled workforce. Recruitment can be done through various channels, including online job portals, recruitment agencies, and networking.
Companies aiming to penetrate the Vietnamese market without establishing a full-fledged entity can opt for Employer of Record (EOR) or Professional Employer Organization (PEO) solutions. These facilitate a smoother entry by taking on the employer’s responsibilities, handling all local regulatory and compliance issues. It’s a cost-effective, quick, and low-risk approach to test the market and start operations in Vietnam.
To obtain a work visa in Vietnam, the prospective employer needs to apply on behalf of the foreign employee. The process entails securing a work permit, which requires submission of several documents including, but not limited to, educational degrees, experience certificates, and a medical certificate. Post the approval of the work permit, the process to secure a work visa initiates.
Registering a company in Vietnam involves multiple bureaucratic steps. The process starts with business registration at the Department of Planning and Investment, where a business registration certificate is issued. Following this, the company needs to acquire a tax registration certificate, and further legal compliances depend on the nature of the business.
For acquiring real estate for business in Vietnam, it’s essential to be well-versed with the land laws which have undergone several changes in recent times. Foreign organizations can lease land for a maximum period of 50 years. It is advisable to engage a local real estate expert to navigate the complex real estate landscape in Vietnam effectively.
Entering the Vietnamese market offers promising prospects given the country’s economic resilience, strategic location, and government initiatives fostering a business-friendly environment. Adhering to local business cultures, and leveraging available resources, can aid in navigating the vibrant business landscape of Vietnam, paving the way for a fruitful business venture in the Southeast Asian region.