The Perfect Supply Chain Alternative
The Covid-19 pandemic has accelerated the deterioration of the US-China relations, signaling troubling times ahead for businesses with operations in both superpowers. The rising tensions have led enterprises to look for options to diversify their supply chains, with Vietnam being the first choice for many organisations.
Large multinational companies like Apple, Samsung, and Nintendo have moved some of their production lines to Vietnam and many other companies are to follow suit. Vietnam offers the perfect opportunity for companies due to its prime location, young workforce and improving infrastructure. For years businesses have recognised the strong potential of Vietnam, and foreign investment looks set to increase as the country continues to open up.
4 Key Things to Note About Relocating Your Operations to Vietnam
Good planning is important when relocating your supply chain. When shifting your operations, it is always best to have people on the ground to ensure the process is smooth. Building a small workforce to guide your switch into Vietnam is essential, as labour laws can vastly differ to other countries.
Although Vietnam has many positive aspects, there are still a few things business leaders should keep in mind before going forward with their expansion plans:
- Transforming Infrastructure: Vietnam is developing quickly, and its manufacturing infrastructure is maturing to catch up with China’s capabilities. Local insights will be key to finding a good supplier with similar efficiency to meet your company’s needs.
- Reforming Business Environment: Vietnam ranked 70th globally in the World Bank’s “Ease of Doing Business Ranking 2020”. With Vietnam trying to attract more foreign investment, the business environment has been steadily improving for the private sector. As reforms continue, the business landscape of Vietnam will constantly evolve.
- Language Barrier & Culture: In Vietnampaperwork is still conducted in the Vietnamese language and all foreign paperwork must have a certified translation. The nation’s Confucian traditions have a strong influence on the culture, relationship building and decision-making processes. Enterprises need to be ready to adapt to the differences.
- Labour Laws: Vietnamese Labour laws are very protective of employees. With maximum working hours set at 8 hours per day, overtime regulations and 6 months maternity leave, the protocols shield workers more than countries like China. Knowledge of local labour laws is essential for compliance.
Credit: Infographic from DataLEADS; Source: The World Bank
Tap into Professional Help & Grow Your Business with PEO/EOR
Moving your supply chains will be significantly easier with people on the ground and professional help with local expertise. PEO/EOR services offer the most cost-effective and flexible method to expand your business. Set up your operation in Vietnam within a short timeframe, and have your business’ supply chain up and running promptly.
Quickly build up your workforce in Vietnam without the necessity of setting up a legal entity. Bypass setups and avoid fees for:
- Entity Registration
- Statutory & Labour Registrations
- Entity Tax Compliance & Registrations
- Bank Set-Up & In-Country Capital Requirements
- Legal & Financial Counsel
- Annual Cost of Internal Staff
Remove the administrative costs of maintaining a legal entity and save at least 50% by hiring under a PEO arrangement. Simply pay an annual PEO employment service fee to have full business operations in Vietnam.
If you are interested in generating an effective business expansion strategy, learn more about how Links can assist you through our Secondment services.
Links International has been operating locally in Vietnam for years, and partnering with Links will give you complete insights into the local procedures. Links’ all-round HR expertise will also be able to help resolve any other HR administration, visa application, and insurance-related tasks, leaving you to solely focus on relocating your supply chain and expanding your business.
As Vietnam’s labour laws are expected to change significantly in the future, our local payroll experts will constantly be keeping note of the changes in labour laws, so you don’t have to. Links makes the lives of business leaders simple by ensuring you are never caught out by non-compliance. Outsource your payroll now and partner with Links for all the knowledge you need on Vietnam.
3 Key Takeaways
Plan for the Potential Challenges of Diversifying
Moving your supply chain into Vietnam can present a wide range of challenges. Ensure you’ve analysed the potential problems and consult local experts to give you advice on how to resolve the outstanding issues.
Use PEO/EOR Services to Expand Your Business
Secondment services like PEO/EOR provide expansion-seeking businesses a cost-effective and flexible alternative. Remove the need to set up your own legal entity, and immediately hire staff to meet your workforce needs in your expansion.
Partner with Professionals to Keep Up to Date
Simplify your HR and focus your efforts on growing your business. Partnering with Links International can help you keep up with the latest labour laws, ensuring you are always in-compliance with local rules and regulations.
Related Articles:
- Vietnam’s Post-Covid Business Potential
- Starting a Business in Vietnam – Everything You Need to Know
- Secondment FAQs: How to Use PEO/ EOR to Your Advantage
- Expanding into Southeast Asia: Business in Vietnam
- 3 Pillar Strategy to Sustainable Business Growth Post Covid-19
