Vietnam - An Ideal Destination For Long-term Business Investment

In recent years, Vietnam has been known as a strategic place for many foreign investors to do business. In 2019, Vietnam’s GDP (Gross Domestic Product) was 7 percent, the country is one of the fastest-growing economies in Asia.

In the following article, we will decode all business information about Vietnam, from the business culture in Vietnam to how to do business in Vietnam?

Business lines should be chosen to invest in Vietnam, etc.

1. What is Vietnam Business Culture?

As with many other Asian cultures, the business culture of Vietnam is different from Western culture. If in some Western countries such as the USA, Australia, and the United Kingdom, people tend to prefer formal meetings in business activities whereas Eastern countries, personal sharing, and development of closer long-term bonds are more favored and encouraged.

The concept of face and social connection are important cultural factors that affect business activities in Vietnam. Foreign businessmen should be aware not try to direct disagreement or refuse the proposals from the partners which can be considered as a person to ‘lose face’ in Vietnam. The face is a concept that can be described as reflecting a person’s reputation, dignity, and prestige.

If you have a suggestion, it is recommended that you should discuss it in private and treat your partners with respect. Sharing your personal information about your family and hobbies is also a good key to build and improve business relationships with Vietnamese partners.

Hiring a Vietnamese interpreter, and having a local Vietnamese representative is the right strategy to promote and negotiate with potential Vietnamese supply partners.

2. How to do business in Vietnam?

Vietnam is considered as the land of opportunities for both local and foreign investors. Low Expenses; Free Trade Agreements; Government Support; Young, Skilled Population; Strong Economic Growth Rates; Infrastructure Development; etc. are attractive factors that made Vietnam one of the best destinations to do business in Asia.

As foreigners, you can choose one of two types of companies to do business:

• The Limited Liability Company or Wholly foreign-owned LLC business has the same legal recognition, same rights, and responsibilities as a domestic business in Vietnam.
• A joint venture company or Partly foreign-owned LLC requires foreign investors to collaborate with at least one domestic business. For this type of company, foreign investors can set up their business by partnering agreements.

Generally, foreign investors will go through the basic following steps to set up a business in Vietnam:

• Check the proposed company name, obtain the certificates of business and tax registration and publish the registration contents on the National Business Registration Portal (NBRP);
• Make a company seal;
• Submit an online notification of the seal-sample;
• Open a bank account;
• Approve pre-printed VAT invoices with the Municipal Taxation Department;
• Pay business license tax;
• Register with the local labor office to declare the use of labor;
• Register employees with the Social Insurance Fund for the payment of health insurance and social insurance.

Business Visa is required for most foreign investors (except citizens of Visa Waiver Countries). There are two ways to get Business Visa:

• Business visa on arrival: Applicants provide some personal information and travel details then get a visa letter via email within a certain time after completing the secured online form. Applicants will get a visa stamped upon arrival at Vietnam airport.
• Business visa at Vietnam Embassy abroad: Applicants contact the Vietnam Embassy/Consulate and receive guidance on what to prepare and steps to follow.

To get a business visa for Vietnam, you need to make sure:

• Your passport must be valid at least 6 months from the departure date, has at least 02 blank pages for visa stamp.
• Sponsorship letters from a licensed company in Vietnam are required if you apply through the local embassy in your country.

Which is the best business to start in Vietnam?

According to Global Business Services Company (GBSC), restaurant and bar, garment and textile items, home furniture making and remodeling, exportation, and e-commerce business are the best businesses to start in Vietnam.

Restaurant and Bar

Restaurant and Bar is a great business service in Vietnam. Vietnam food culture has become popular. Vietnameses have a passion for good meals and drinks. People tend to spend a few hours relaxing at a nice restaurant or bar after a difficult day’s job.

Garment and Textile Items

Garment and Textile are among items that Vietnam exports, this is a lucrative business in Southeast Asia. You can open your textile and garment Company which focuses on making ready-to-wear. You are also likely to consider becoming a cloth merchant or start an online clothing business. There are no differences between these businesses as all are profitable equally.

Home Furniture Making and Remodeling

Investment in the home furniture making is not a bad idea, in fact, many businesses and businessmen far away source for home furniture from Vietnam that they take to their countries for resale.

Exportation

Rice, coffee, crude oil, footwear, rubber, electronics, and seafood are Vietnam’s most valuable export products, so there are a lot of opportunities to sell these valuable products to buyers from other countries.

E-Commerce Business

There are a huge number of Internet users in Vietnam (more than 60 million), and the numbers are predicted to continue increasing in 2020. Online business is an attractive business for all local and foreign investors. The cost to set up the business is not high as there is no official minimum capital requirement in the country for most business lines.

How many does it cost of doing business in VietNam?

Cost is one of the reasons that made foreign investors choose Vietnam for their investment. Thecost to conduct business in Vietnam is low. Vietnam’s labor costs are competitive and operation costs are also estimated to be cheaper, at about one-third of the levels in India.

You can consider starting your business in three zones in Vietnam including Hanoi (Capital city), Da Nang (3rd largest city, important seaport), and Ho Chi Minh City (largest and most populous city).