Discovery The Business Opportunity In Vietnam

Foreign enterprises must have a thorough awareness of the difficulties and commercial prospects that lie ahead when beginning a business in Vietnam, regardless of how big or little, whether or not they have a strong worldwide brand.

Businesses entering Vietnam should develop an appropriate entry strategy to better understand the culture and customs of the host country, product-market fit, as well as the current and future business opportunities there. This is important for sustainable development and a positive impact on the brand image.

CHALLENGES OF DOING BUSINESS IN VIETNAM

Besides there are many business opportunities in Vietnam, conducting business in Vietnam may provide several difficulties, most notably the language barrier. Vietnamese is still the main language of communication in Vietnam's corporate environment, even if English is frequently used. This is especially true when dealing with administrative institutions and blue-collar workers. When a company lacks a dedicated support division, writing legal paperwork, taxes, employment licenses, and other documentation in Vietnamese soon becomes a problem.

Another barrier to international companies operating in Vietnam is cultural differences, particularly in human resource management, which lowers output and negatively impacts the operation of the company. Limited cultural awareness also impairs a manager's vision and harms the long-term growth of the business.

Furthermore, because it demands a significant amount of time and money from foreign investors, taxes are one of Vietnam's most complicated commercial processes. Vietnam has a more than ten-type tax system, including value-added tax (VAT), corporate income tax, personal income tax, and others. Each tax has a unique calculating mechanism based on numerous scenarios and processes. For many international firms, especially in periodic assessment reports, such intricacy can be a huge burden. As a result, it is crucial for businesses to collaborate with a competent tax processing service provider that has a firm grasp of the law because even a tiny mistake can result in unnecessary danger.

Foreign investors are urged to work with a reputable and experienced local service provider to help ease the burden and resolve issues that arise with the government or caused by language or cultural differences in order to focus on the aspects of investment and operations and mitigate the aforementioned challenges.

It is recommended to select a company partner that has extensive expertise working with international enterprises since they will comprehend the significant issues that foreign organizations frequently encounter. Businesses can receive helpful advice and be assisted in developing human resource strategies that are in line with local culture by working with an experienced consulting partner like Talentnet, which has a team of consultants who are professional, highly specialized, and knowledgeable about Vietnam's most recent laws and tariffs.

Vietnamese Currency

The Vietnamese dong and the US dollar have a steady exchange rate, which is advantageous for all types of business partners. As a result, one of the most reliable Asian currencies for international investors is the Vietnamese dong.

However, the government rigorously controls transactions involving foreign currency; controls on their intake are less severe than those on their outflow.

Vietnamese Language is Used in Paperwork

Documentation for reporting and filing, including licenses, must be written in Vietnamese. The court in the home country must certify the Vietnamese translation of any papers that are currently in English or another language. This is not the end of it. After that, a Vietnamese embassy must certify the translated paperwork.

Taxes in Vietnam

There are still ten business tax payments required annually, despite the fact that reform of Vietnam's complex tax structure is in progress. VAT and social insurance are additional levies.

The Vietnamese government wants to promote a conducive business climate by streamlining the tax computation and declaration processes through the reform as well as resolving any tax ambiguities.

The authorities must also put in a lot of effort to develop tax reporting technologies, such as electronic tax declarations.

Lack of Transparency and Bureaucracy

Vietnam is a nation that is transitioning toward a more globalized viewpoint. As a result, even as rules advance into the contemporary era, you'll probably still run into a lot of red tape and lack of transparency. A lack of consistency in government policy may be caused by Vietnam's regulatory frameworks, commercial law, and the overlapping authorities of several government departments. Additionally, there are low corporate disclosure rules and a lack of financial transparency, which can make due diligence and KYC more difficult.

Payment in Cash

Cash is the predominant form of payment in Vietnam. Due to a lack of trustworthy cashless systems and ATMs, more than 90% of transactions in the nation are conducted in cash.

The compromised local banks make it more difficult for the Vietnamese to accept and believe in other forms of payment.

However, the government is working to make Vietnam one of the few cashless nations in the area, with a focus on the use of blockchain technology and simple digital payment methods.

BUSINESS OPPORTUNITIES IN VIETNAM FOR FOREIGN COMPANIES

The open, attractive market for foreign investors

Vietnam is seen by many analysts as a viable market for international enterprises to invest in and tap into, with a market of more than 95 million people. Due to its youthful and dynamic population, high internet penetration rate, and greater readiness to new projects, Vietnam offers a wealth of business prospects, particularly in the technology and inventive industries. Due to Vietnam's expanding wealth and skilled workforce, multinational companies may easily develop their production and distribution networks with the correct plan in place.

In instance, Vietnam is one of the nations experiencing the highest economic growth rate in 2020, despite the global economic crisis brought on by the Covid-19 epidemic. The nation has had a spectacular economic rebound as a result of prompt pandemic control measures and the trust of foreign investors, and is anticipated to be the only ASEAN nation to retain positive growth.

The Vietnam-EU Free Trade Agreement (EVFTA), on the other hand, goes into force and eliminates a number of tariff obstacles, providing several chances for EU nations to invest in Vietnam. Vietnam is a desirable location for international investors due to its good geographic location for commerce, available labor force, and competitive productivity when compared to other nations in the area. In the foreseeable future, the surge of FDI investment will also have a cascading impact.

Despite this, there are several reasons why Vietnam has drawn the attention of global investors, particularly in these unsettling times.

In the middle of SouthEast Asia, Vietnam has borders with China to the north, Laos to the west, and Cambodia to the south.

Vietnam's population and wealth are both expanding

Vietnam is the country with the 14th-highest population in the world. With 93 million people, half of whom are under 30, Vietnam offers a sizable pool of both prospective clients and staff for many investors.

Vietnam's business environment is dynamic and rapidly changing as a result of sustained high economic development, continuous reform, a young population, rising wealth, and shifting consumer attitudes. Over the past 30 years, Vietnam's economy has experienced some of the fastest growth in Asia, transforming it from a low-income market to one.

Numerous prospects exist in Vietnam in the form of infrastructure investments, the industrial sector, export industries, and more recent consumer markets.

Principal products that Vietnam exports

- Phones and their components

- Garment

- Timber and wooden goods

- Seafood

- Products from agriculture including coffee, rice, and cashew nuts

- Transport and components

Main products that Vietnam imports

- Equipment, tools, and accessories

- Plastic components

- Steel and iron

- Crude petroleum oil

- Fabrics, textiles

- Pharmaceuticals and medical equipment

Vietnam’s infrastructure and manpower costs

Vietnamese governmental and private infrastructure investment is the greatest in Southeast Asia, according to data published by the Asian Development Bank (ADB) in April 2017.

Vietnam is seen as a new manufacturing option to China, India, and other Asian nations due to its affordable labor costs.

Vietnam as a new market to enter

Vietnam is a market that will be open for a long time and is full with clients, rivals, and coworkers. Create a strategy for your entry and expansion in Vietnam, bring patience, and plan your establishment in phases.

Choosing the best route into the local market can be difficult without local expertise and experience, regardless of the motivations for admission.

Your steps to Vietnam market:

- Understand Vietnam opportunities

- See how Vietnam fits into your strategy

- Build Vietnam’s strategy execution plans

- Invest in Vietnam competencies and people

- Invest in business relationships

LIST OF 10 SMALL BUSINESS IDEAS CAN BE ONE OF BUSINESS OPPORTUNITIES IN VIETNAM

The first business opportunities in Vietnam - Agriculture & Food Processing

Vietnam has a thriving agricultural sector and exports a variety of goods, including sugarcane, rice, coffee, cotton, peanuts, and rubber. In addition to these, there are several additional commodities, such as fruits and vegetables, that you may prepare, market, and make money from. They can even be exported.

You may run an agricultural processing business by owning a farm and cultivating your own food. As an alternative, you may purchase them from producers and farmers. Just one thing: You must conduct thorough study on both the domestic and international markets for processed foods.

The second business opportunities in Vietnam - Furniture Making & Remodeling

Vietnamese people enjoy furnishings a lot. They redecorate their home and business with new furnishings on a regular basis. You may make good money from the furniture-making industry in Vietnam if you have a strong understanding of furniture design, construction, and decorating.

The third business opportunities in Vietnam -  Textile & Garment

Vietnam is a significant exporter of clothing. The cotton from Vietnam is likewise of high grade. This makes the textile and apparel industry a lucrative and well-known one for you.

You can engage in textile and apparel trading. If not, you can establish your clothing manufacturing. You must, however, be well-aware of the clothing and garments you are constructing. Additionally, thoroughly investigate who your target customer is and adjust your company ideas appropriately.

The fourth business opportunities in Vietnam -  Cosmetics & Detergent

Due to a growing economy and a sizable young population, Vietnam is seeing an increase in the demand for beauty goods. This is a fantastic chance for you to benefit greatly from this well-liked Vietnamese business concept.

Making detergent is one of the most well-liked business ventures in Vietnam. People always seek fresh and distinctive things, and there is a consistent need. Detergent production is thus a profitable endeavor.

Do thorough study on the market, the product you intend to produce, and your target market before investing in either the cosmetics or detergent industries.

The fifth business opportunities in Vietnam -  Restaurant/Bar

Vietnamese people like eating out at many types of establishments. You may open a restaurant with nice furnishings and tasty meals. You can provide both international and native Vietnamese cuisine. In Vietnam, opening a restaurant of any size or style is a common business concept. The restaurant industry may generate significant revenues in areas like Ho Chi Minh City, Hanoi, and Da Nang.

The bar also has a strong demand, which presents you with a profitable business potential. But keep in mind that the opening bar is subject to a number of governmental laws and restrictions. To prevent any legal issues, take great care to abide by the rules.

The sixth business opportunities in Vietnam -  Real Estate

Given that Vietnam is expanding and that many immigrants and expats are moving there, the real estate industry is currently a highly well-liked business idea in this nation. You may launch a real estate company in Vietnam and anticipate making a healthy profit.

You may either acquire properties and resell them or develop properties and put them up for sale. There is a high demand for real estate. Real estate agents and property managers are other career options. You must be careful when selecting the time period for your activity because real estate is such a vast industry.

The seventh business opportunities in Vietnam - Tourism

Vietnam is a stunning nation with a distinctive culture that draws travelers from all over the world all year long. For this reason, tourism is a well-liked business concept in Vietnam.

You may start a travel agency and provide various tour packages for visitors. There are many beautiful natural areas in Vietnam, and the country is frequently visited by visitors. You will thus undoubtedly earn a profit.

Make thorough investigations about the locations and culture of the nation so that you may draw visitors and plan an enjoyable vacation for them. Don't forget to include the locally produced foods in your trip itineraries since they are also extremely well known.

You must review the real estate rules and regulations if you plan to visit hotels or guesthouses.

The eighth business opportunities in Vietnam -  Car Dealer

Vietnam has a growing need for automobiles, making the sale of automobiles and related items a very lucrative economic venture. Both new and secondhand automobiles are in high demand, so either one is an option.

Along with selling and servicing auto parts, you can also hire cars. In Vietnam, motorcycles are also widely used. So starting a store selling bike components is another smart business move.

The ninth business opportunities in Vietnam -  Logistics

The expansion of industry that is focused on exports has increased demand for logistical services. With the aid of a few initially hired delivery vehicles, you may launch your logistics business in Vietnam.

You must effectively expand your contact network in this industry and keep the timetable. Many businesses in Vietnam lack a logistics division despite the fact that they require this kind of support. Consequently, this is your chance to expand the logistic company.

The tenth business opportunities in Vietnam -  Exports

One of the most lucrative and well-liked business concepts in Vietnam is export. Important exports from the nation include rice, coffee, crude oil, rubber, shellfish, and others. Through various e-commerce platforms, you may market these products to customers in other countries.

As a freight forwarding agency, you may launch your company by sending manufactured items to customers. You can conduct business both locally and internationally as a freight forwarding agent.

You need a strong network of carriers in this industry to deliver the items to your clients.

There are many profitable small enterprises in Vietnam that are both well-known and successful for you. Let's talk about them.

START A BUSINESS IN VIETNAM - HOW TO REGISTER A COMPANY FOR FOREIGNERS?

Nowadays, there are a lot of international business owners that are highly interested in starting or growing their operations in Vietnam. There are basically four different legal entities that are accessible to outsiders. Let's examine the following choices:

a) Limited Liability Company

There must be at least one founder for this kind of legal body. A limited liability company's straightforward corporate form is a benefit in Vietnam. The ideal type of business entity to create is a limited liability corporation.

The inability to issue shares or list the firm on a public stock market to raise money is a drawback of this structure.

b) Joint Stock Corporation

Forming a joint-stock company is the ideal option if you want to launch a mid-sized or big business in Vietnam.

A joint-stock corporation must have a minimum of three founders in order to be established in Vietnam. A management board and an inspection committee are necessary.

With this structure, promoters are able to generate money by issuing a variety of public shares.

c) Representative Office

The simplest way for international businesses to conduct business in Vietnam is through this route. In this case, foreign businesses do not have to establish a legal company.

However, opening a representative office has significant drawbacks. One of them is that you cannot do business or generate income in the nation.

d) Setting a Branch Office

If you establish a branch office in Vietnam, you will be permitted to engage in business operations and generate income. The parent firm shall be solely responsible for the responsibility. The only activities allowed are those of the parent firm.

Based on the scale and scope, you need to decide on the best fit in forming a legal entity in Vietnam.

Vietnam is a growing economy. The current statistics from Forbes show lots of possibilities and prospects in this part of the world. There are several popular business ideas in this country for you to be successful. The laws and regulations are easier, there is the availability of cheap labor as well as a ready market.