Foreign investors thinking of setting up business in Vietnam face a mountain of hurdles, especially in complex regulatory matters and dealing with the infamously unpredictable Vietnamese bureaucracy. But while there are obstacles to success the rewards for perseverance are plenty with many foreigners having overcome the difficulties and scored big in the Socialist Republic.
Perhaps the most common way for foreign investors to break through in Vietnam is to set up a limited liability company. A legal representative is required but trading is possible under single or multiple owners with 100% foreign ownership or a joint venture.
Employing the assistance of a company registration business is vital but even then expect a wait of up to two months before everything is finalised.
Other options include the establishment of a joint stock company that is good for investors that require complex corporate structures. A management board is required in this instance. For foreign companies seeking to study and research markets in Vietnam, setting up a representative office may be a quicker way to go. A chief representative is required but this can be fully owned by your head office without the need for shareholders or partners. Needless to say, trading cannot be accomplished under this regime.
Vietnam is a viable alternative to doing business in China but like the Asian giant there are numerous pitfalls as outlined below:
Navigating Vietnam’s regulatory environment is a tricky path through laws related to labour and taxation, to name but two. This is a clear reason why professional assistance is vital. Vietnam’s red tape can be frustrating and time-consuming with approval processes often involving several government agencies that can result in delays.
Persistent follow-ups are often required to get results and doing this yourself will require a healthy dose of what the younger generation call chillax.
Legal frameworks can be changed seemingly on a whim and facing up to the challenge of a shifting regulatory base can be daunting. This is where specialist knowledge of the country with access to trustworthy and competent local distributors and partners is vital. Easier said than done and a minefield for the uninitiated.
Dealing with the prospect of corruption and bribery can also be a challenge as in many Asian sectors. Even if things are not downright bent then they can involve practices that might be unfamiliar to standard Western business practice. Time and a big shot of patience can lead to further frustrations.
While it is true to say that English is now more widely spoken in business circles it can still be a barrier to timely entry. If it is not the spoken word then there may be a need for the translation of legal documents, again time-consuming and costly.
Throw cultural misunderstandings into the mix and you can see why understanding Vietnamese business etiquette is not for the faint-hearted!
In conclusion, seek professional help when setting up in Vietnam. It’ll save time in navigating the myriad of laws and pitfalls in the republic.
Sebastian is an accomplished author with a passion for storytelling. His works span various genres, from thrilling mysteries to heartfelt romance novels. With a keen eye for detail and a knack for character development, Sebastian weaves engaging narratives that captivate readers and transport them to new worlds.