This article is written based on my perspective. If you have any other ideas, we welcome your comments below this article.
Vietnam is emerging as a new and potential place for investment. In recent years, Vietnam is planning many industrial zones for new factories. Besides, Vietnam has a golden population as the number of people at labor age counts around 70%. Vietnam government also carries out good policies for foreign enterprises. However, to successfully invest in Vietnam, foreign businesses need to have a good preparation.
Some basic factors I believe that foreign investors need to concern are legal procedures, human, culture, and location factor.
The reason I put law in priority because we have the saying: “When in Rome, do as the Romans do”. Understanding the law of the destination or at least knowing how to get a law consultant will help the company run smoothly and avoid unwanted problems. Right from the first place, the issues should be carefully concerned like: some basic procedures for establishing representative office or company, conditional business lines in Vietnam, employment law in Vietnam, how to handle conflicts with other partners. When you are clear about the plans for these mentioned above, I believe that you will have a more positive and active investment.
The second important factor is human. I have heard lots of problems relevant to using labor from my partners’ managers. Some said that they could not find the laborers for their factories because the factories are too far from city centers or resident areas. Some said that they use headhunters to find staff for them, but this seems not to be a sustainable method because of the high cost. Some complained to me they got a problem in having communication with local staff. Some asked me what appropriate wages are and working benefits for staff as many of their companies leave after a period. There are many barriers to working with local laborers. However, from my point of view, these issues can be avoided if the enterprises have specific recruitment and training at the beginning.
Culture should be noted as an important factor as well. The difference in cultures sometimes creates difficulties in getting the same agreement or conclusion between foreign staff and local staff. Luckily, Vietnamese are good at learning language, so it does not matter for a company to give training to local staff, or to deliver tasks and duties to staff. Anyway, having a good strategy to understand and adjust the working style and working culture between staff come from different countries, regions in the company is needed.
Finally, one factor that decides the success of foreign companies or factories is the location factor. The local authorities of some places have specific quotas or conditions that foreign investors need to meet to set up factories or offices. Sometimes, if you want to search for high-skill staff, you need to have a dormitory or be near the high-living condition places.
This article shares only basic notes when investing in Vietnam. To have a deeper understanding of business lines, markets, labor, culture in Vietnam, feel free to send us an email or leave comments below.