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More About This Title VIETNAM BUSINESS GUIDE
English
Raymond Burghardt
Former US Ambassador to Vietnam
Director, Indochina Capital Corporation
Vietnam Business Guide is the book that every seasoned Southeast Asia hand, bellied up to a Saigon bar, says he ought to write. Be thankful the Vierras made good on this common boast. Unstinting, pragmatic, penetrating and incredibly accessible, this highly readable volume may not keep you from the suffering the pain of starting up, but—if read closely, with a yellow highlighter—may very well spare you the agony of undue blood-letting. There will be blood, but Vietnam Business Guide will mitigate the flow.
James Sullivan
Managing Director, Mandarin Media
Author, National Geographic Vietnam and Over the Moat
Vietnam Business Guide provides practical and balanced information about Vietnam for foreigners to plan their first steps to enter the market. What separate this book from others are its reality and practicality, brought about by both the authors who themselves are entrepreneurs having walked the same journey and the experts who contributed their experiences on different topics throughout the book. The business landscape in Vietnam is speedily changing. Some facts, by the time you read the book, may need updating but still it serves best in providing newcomers essential starting points—a should-read book for those who consider doing business in Vietnam!
Vu Minh Tri
General Director, Yahoo! Vietnam Co. Ltd.
I believe that Vietnam Business Guide has been very objective and true to its purpose. It covers almost all relevant business and personal challenges that one would face in Vietnam, with the authors’ firsthand experience shining through in their handling of culture issues and the Vietnamese mindset. Despite the constraints on size, it has sufficient details and a wealth of references to guide entrepreneurs and business executives in the right direction. Crisply written with interviews and real-life anecdotes, it makes for a very interesting read. A must-read book and an invaluable tool kit for anyone looking to Vietnam for business.
Manish Dhawan
Vice President – Coffee Division, Olam International Limited
English
businesses in Vietnam, he was the import manager for the New York branch of a global logistics firm. Before this, he served as a Peace Corps Volunteer in Tanzania, East Africa, working as a university economics instructor. Brian is currently the director of Embers Asia Ltd. and the managing director of Phat Tire Ventures. Both companies have operated successfully in Vietnam for more than seven years.
Kimberly Vierra graduated with a Bachelor’s degree in Economics (honors) from Lewis and Clark College, and a Master’s degree in International Management from Portland State University. Kimberly has been a Senior Consultant with ORC Worldwide’s Singapore office since March 2007, after relocating from Dalat, Vietnam where she was the co-founder of Embers Asia. Previously, she was a consultant in ORC’s New York headquarters where she consulted with Fortune 500 companies on their international assignments programs. Prior to ORC, Kimberly worked in the International Assignment Solutions Technology Group of PricewaterhouseCoopers in New York City, and before this worked in the International Human Resources department at Nike, Inc.’s world headquarters.
English
Preface xiii
Introduction xvii
Structure of the Book xix
Part 1: Considering Vietnam—Get Ready! xix
Part 2: Starting up in Vietnam—Get Set! xx
Part 3: The Daily Challenges—Go! xxi
Part 1 Considering Vietnam—Get Ready! 1
Chapter 1 Why Vietnam? 3
A Snapshot of Vietnam’s Economy 3
Economic Overview 4
Summary 7
Web Resources 8
Endnotes 8
Chapter 2 Living in Vietnam—It isn’t for Everyone 9
Part 2 Starting up in Vietnam—Get Set! 13
Roadmap to Starting your Business in Vietnam 13
Chapter 3 Establishing Your Presence 17
Getting Started: A Vietnamese Perspective 18
Legal Structure 21
Work Permits 23
Work Permit Exemptions 23
Outline for Process of Obtaining a
Work Permit 24
Renting Office Space 26
Exit Strategy 28
Summary 30
Endnotes 31
Chapter 4 Navigating the Business Landscape 32
Business Protocol 33
Meetings 33
Business Attire 34
Business Entertaining 34
Time Sensitivity 34
Corruption 35
Negotiating with the Vietnamese 39
Dealing with the Different Government Departments 41
Import and Export Considerations 44
Banking and Money Matters 44
Banking 45
Repatriating Profits 46
Exchange Rate 47
Interest Rates 48
Pricing and Naming Considerations 49
Summary 50
Endnotes 50
Chapter 5 The Labor of Labor 51
Overview of the Labor Landscape 51
What to Expect: Local Candidates 51
Summary 54
Skill Set Gaps 54
What to Expect: The Viet Kieu Candidate 56
What to Expect: Working Regulations 58
Wages 59
Working Hours 61
Overtime 61
Annual Leave 62
Other Leave 62
Sick Leave 63
Child Care Leave 63
Maternity Leave and Special Benefits 64
Marriage and Death Leave 64
Working Age 65
Recruiting Procedure 65
Labor Contracts 65
Compulsory Insurances 67
Employment of Expatriates 68
Summary 69
Endnotes 69
Chapter 6 Working with Local Business Partners 71
Why Do You Need a Partner? 72
Finding a Partner 75
Protecting Yourself 76
How to Approach and Structure a Partnership 79
Managing Your Business from Abroad 80
Summary 81
Endnotes 82
Chapter 7 Legal and Other Administrative Hurdles 83
Permitting 84
Regulation and Overall Ease of Doing Business 86
The Post Office Metaphor 87
Laws You Have Probably Already Broken 88
Endnotes 90
Part 3 The Daily Challenges—Go! 91
Chapter 8 Manufacturing, Outsourcing, and Agricultural Production 93
Manufacturing in Vietnam 94
Quality Concerns 96
Strikes 97
Tax Incentives 99
Outsourcing to Vietnam 99
Quality Concerns 100
Education and Literacy 101
Agricultural Production 103
Summary 106
Endnotes 106
Chapter 9 Selling into the Vietnamese Market 108
What the Vietnamese Want 109
Branding and Name Recognition 112
Local Competition 113
Distribution 118
Managing a Local Sales Force 119
Advertising 122
Pirated Products and Copies: How They Are Viewed 124
Summary 125
Endnotes 126
Chapter 10 Intellectual Property Rights 127
IPR Challenges and Realities in Vietnam 127
The Path to Protection 131
Patents 131
Copyrights 133
Trade Secrets 135
Trademarks 135
Intellectual Property Rights Resources 137
Legal Counsel and IPR Advice in Vietnam 138
Endnotes 139
Chapter 11 Tax 140
Taxation Overview 140
Business Taxation 141
Calculating Business Taxable Income 143
Deductions 144
Depreciation 146
Losses 147
Capital Gains Taxation 147
Withholding Tax 147
Dividends 147
Interest 148
Royalties 148
Foreign Income and Tax Treaties 148
Transactions Between Related Parties 148
Transfer Pricing 148
Debt to Equity Proportion Requirements 151
Consolidated Returns 151
Indirect Taxes and Duties 151
Value-added Tax (VAT) 151
Special Consumption Tax (SCT) 153
Accounting Standards 153
Corporate Tax Administration 155
Personal Taxation 156
Determination of Taxable Income Prior to 2009 158
Personal Income Taxes from January 1, 2009 159
Inheritance Tax 160
Gift Tax 161
Tax-related Resources 161
Endnotes 163
Epilogue—Can you Handle the Truth? 165
Appendix A Industrial and Economic Sector
Overview 167
Export Production 167
Agricultural Sector 168
Power Generation and Related Services/
Products 168
Construction 169
Telecommunications Equipment and Services 170
Oil and Gas Services/Machinery 171
Airport Support Services and Equipment 175
Environmental Services 177
Health Care 178
Education and Training 180
Franchising 181
Information Technology 181
Endnotes 182
Appendix B Vietnam Living Conditions 183
Severe Climate 183
Pollution, Sanitation Issues and Disease 184
Vaccination Schedule for Shorter Stays (Less than Four Weeks) 184
Hepatitis A 185
Typhoid 185
Hepatitis B 185
Vaccination Schedule for Longer Stays (More than Four Weeks) 186
Japanese Encephalitis 186
Rabies 186
Tuberculosis (TB) 186
Other Diseases 187
Inadequate Medical Facilities/Questionable Pharmaceutical Products 187
Crime 188
Traffic and Transportation Concerns 189
Social, Cultural and Recreation Outlets 190
Hanoi 190
Ho Chi Minh City 191
Schooling 191
Ho Chi Minh City 192
Hanoi 192
Infrastructure Concerns 192
Religious Matters 193
Housing 194
Ho Chi Minh City 194
Hanoi 194
Goods and Services 195
Air Travel from Vietnam 195
Endnotes 196
Index 197
