In the past few years, Vietnam has experienced a huge economic boom, thanks to the influx of foreign investors. Since 1991, the country’s GDP per capita has increased to 350%, which is second only to China. Nowadays, Vietnam has one of the fastest growing economies in Southeast Asia and it’s predicted that the country will become a developed nation by the year 2020.
Aside from attracting millions of tourists around the world, Vietnam also attracts a lot of foreign business investors. In fact, foreign investments account for almost 10% of the country’s overall GDP. If you are planning to do business in Vietnam, here are some of the things that you may need to know.
Major Cities of Vietnam
Regardless of the kind of business that you plan to establish in Vietnam, it’s important that you do your research. First of all, you need to determine the most appropriate location for your business.
Vietnam’s capital city is Hanoi but the largest city is Ho Chi Minh, which is formerly called Saigon. As the country’s financial hub, the city of Ho Chi Minh is a great base for business. In fact, Ho Chi Minh is recognized by CNN as one of the top emerging cities in the world for startups. Of all the foreign business investments in Vietnam, 24% of this is in Ho Chi Minh.
On the other hand, the country’s capital city of Hanoi is not too far behind in Ho Chi Minh in terms of economic development. The city’s geographical location and lower labor cost make it an ideal location for international business.
Traveling to Vietnam
Whether you’re traveling to Vietnam as a tourist or to do business, it’s important that you come prepared. First of all, you need to have a proper visa. If you’re traveling to Vietnam for business, you can apply for your Business Visa in advance at vietnamimmigrartion.org. Take note that Business Visas for Vietnam require an official invitation from a local business partner. You can choose from a one-month single entry or a three-month single entry visa. It’s also possible to obtain multiple entry visas and for a much longer duration but it can cost more and additional requirements may be needed.
If you are visiting in the southern part of Vietnam, you should fly to the city of Ho Chi Minh. Otherwise, if you plan on going to the northern part, then it is best to fly to Hanoi, the country’s capital city. Your business visa is acceptable in both the airport of Ho Chi Minh and Hanoi.
Business Culture in Vietnam
Like most Asian countries, Vietnam’s business culture focus mainly on a social connection that’s made between two business partners. This may be a result of the influence of Confucianism in the Vietnamese culture. Therefore, it’s important to establish a connection with whomever you plan on doing business in Vietnam.
Before you start with any business dealings, it may be a good idea to build a good rapport with your local business partner. You can share some information about yourself, your family, hobbies, etc. Once you’ve developed a good relationship, it will be easier to establish a business relationship.
Most business connections in Vietnam are made through recommendations and referrals from friends and associates. Vietnamese locals are friendly and hospitable in nature so it should be easy to socialize with them. Hiring a local interpreter may be a good idea when doing business in Vietnam. Your local interpreter can also offer some tips when it comes to negotiating and socializing with potential business partners.
Business Etiquette in Vietnam
Most Vietnamese entrepreneurs are punctual and they expect their foreign business partners to be punctual as well. Therefore, when attending meetings, make sure you arrive on time. Also, consider the fact that the major cities in Vietnam tend to have excessive traffic so plan your commute well.
Before you sit down with your local business partner for a meeting, it’s customary to offer tea or some gifts. Although not necessary, this is a good gesture and something that your local partner will surely appreciate. Try to learn a few Vietnamese greetings and make sure you pronounce their names correctly.
Challenges in Doing Business in Vietnam
Just like with other countries in Southeast Asia, corruption in Vietnam is widespread, which is one of the challenges that you could face as an investor. Also, gifts might be considered bribery so avoid offering extremely expensive gifts so it will not be taken as a bribe. You might also encounter corruption in the country’s justice system, local authorities, and within the business community. It’s important that you familiarize yourself with the laws in doing business in Vietnam so as to avoid any legal troubles.
Doing business in Vietnam these days is not really that challenging. Furthermore, there are now plenty of investment and trade opportunities available for foreign investors, thanks to its growing infrastructures. Hiring a local Vietnamese interpreter or negotiator may be a great idea when doing business in the country for the first time.