As one of the potential developing economies in Asia, Vietnam is attracting more and more investors to come and set up their businesses. With the huge advantages of the investment preferential policies for foreign enterprises from the government specialized in tax and low cost of skillful labor, these are reasons that big corporations like Samsung and LG have been present in Vietnam since very early and most recently LEGO Group has started building their billion-dollar factory by the end of 2022 in Vietnam.
Hence, if you are planning to start a business in Vietnam, this article will give you advice in basic Legal and local worker issues with a general view about Local Legislative Regulations and Vietnamese Labor such as working culture, labor costs.
THE INVESTMENT PREFERENTIAL POLICIES FOR FOREIGN INVESTORS
Not only made preparations in terms of infrastructure, labor resources to making Vietnam the typical place that appeals more international investment sources, but also the Vietnam government offered land rental and customs duty incentives policies, above all, the investment incentives for foreign business, especially preferential tax rate and tax holidays for each type of business and strategic area. Thanks to support from the government, businesses will outstandingly reduce expenses – however, there are accompanied requirement terms to be applied for these benefits. In short, there are many advantages for foreign businesses in Vietnam, investors who are planning to open or expand business in this rising market should consider carefully the business law system and local incentive program to achieve the most favorable preferential.
Apart from Legislative Requirements, understanding Vietnamese labor manner is an essential point for new business owners who have plan to expand business. In addition, knowledge of Vietnamese characteristics and labor cost is helpful for you in hiring and building your team.
Quick learning, ingenuity, teamwork spirit, and high sense of responsibility are recognized characteristics of Vietnamese Labor force. Besides, the government also concentrates on upgrade foreign languages and vocational guidance to their young generations. Generally, their current generation is highly competitive and performs in Southeast Asia thanks to their expertise and language skills.
The advantage of low labor costs is also one of the factors that make Vietnam an ideal destination for foreign investors. Indeed, by using skilled and qualified labor at a cheaper cost, businesses will significantly reduce their operating costs. According to Statista, a company providing global business – data platform, Vietnamese labor cost per hour is 2 times lower than Chinese workers and this gap is predicted to increase significantly year by year. Proof of this, “Apple is moving production of its MacBooks from China into Vietnam with the assistance of its top supplier, Foxconn” – Forbes, with its expectation that their new production line in Vietnam will come into operation from May
ADVICE FOR BUSINESSES COMING TO VIETNAM
To set up a business in Vietnam, researching Vietnam Legislative Regulations and building a local team are important points that foreign businesses need to concentrate. It might be complex for individuals or small and medium-sized businesses without a global legal team support as big corporations in registering their own business in any other country, not only in Vietnam.
Understanding the legal challenges that foreign businesses are facing, more and more business consulting companies have been established which provide a full service package helping new foreign businesses in local with risks avoiding and competitive fee. Therefore, using consulting services from a third-party is the suitable choice that enterprises should think about when planning to enter the Vietnam market. Alongside with legal terms, hiring new staff is also another struggle issue for foreign investors.
In fact, lacking knowledge about local employee market and network leading to not affective hiring new employees. To solve this problem, we suggest new businesses coming to Vietnam should consider the headhunting services provided by HR agencies in Vietnam. Additionally, using support from recruitment partner is assumed as the top hiring and recruitment trend for 2023. Instead of finding and looking for candidates yourself, let your recruitment partner do it for you. In fact, these service companies are able to assist you in a wide range of industries, from Senior level to C-level positions at a suitable rate of fee thanks to their large talent pool. Moreover, with vast talent networks, Recruitment Agencies will provide you with a short list of the most qualified candidate in a short time
compared to hiring by yourself in a strange investment location.
Finally, to handle legal challenges and urgent demand in hiring staffs or building totally new team in Vietnam, using services from business consulting companies and headhunt companies is the optimist choices for HR internal for their organization because of its time and cost saving.