Vietnam’s business environment has been improving and is becoming an increasingly attractive place for business. As reported by the World Bank, Vietnam’s GDP per capita increased 3.6 times between 2002 and 2021 – making it no surprise that more companies are selecting Vietnam as their next destination for expansion.
The country has joined many new free trade agreements like the European Union Vietnam Free Trade Agreement (EVFTA) and the Regional Comprehensive Economic Partnership (RCEP), meaning foreign direct investment into Vietnam is expected to continue to increase.
However, even though Vietnam has made leaps in its ease for companies and attractiveness for international companies, there remain challenges that leaders can face when setting up shop. Read more to learn how to overcome those challenges with a breeze!
Common Challenges When Expanding into Vietnam:
1. Language Barrier
One of the most common problems overseas businesses faces is the language barrier. Translators are often required during business conversations and much of the paperwork needs to be conducted in Vietnamese. All foreign paperwork must also have the Vietnamese translation certified. It is learnt that a huge majority of the Vietnamese population do not communicate in English.
2. Employee Orientated Labour Laws
An area in which international investors may not know about Vietnam is that local labour laws grant strong protection for employees and in the case of labour disputes it is largely orientated in favour of the employee. For example, when unilaterally terminating a labour contract, an employer can only do so providing it is supported by a legitimate reason and the minimum notice period is served.
The rapid development of Vietnam also means the business environment is continually reforming. In Q4 of 2022 itself, Vietnam saw a set of changes including unemployment funding for employee/employers affected by Covid-19, changes in region-based minimum wages, interest rate support for businesses and more – which you can learn about in our Q4 Onboard publication.
The corporate tax system is complicated with multiple payments needed to be made each year. Although there have been reforms to the system, companies can find themselves spending hours on paperwork to complete the process. It was learnt that the multi-layered taxation system became a lot more difficult to navigate after changes were made to the Law on Tax Administration in 2020.
PEO – The Fastest Way to Expand into Vietnam Securely
Want to expand into Vietnam but find these potential challenges and paperwork off-putting? Expanding your business’ presence overseas is an essential step in growing revenue and a global footprint, but the process can be complex and long.
Secondment services are a great way to bypass all these issues, as the service provider will be the ones doing all the work. PEO/EoR vendors will legally employ staff in Vietnam on your behalf making hiring overseas a simpler procedure. Businesses will not have to set up a legal entity in the country, meaning the complexities and risks associated will not be an issue.
For example, by using PEO/EoR services you will not need to worry about the probation agreements or termination rules introduced in “Vietnam Labour Code 2019”, as a good service provider will ensure that you are compliant with all the latest updates. In-country specialists will communicate easily with locals and ensure your tax and payroll are within protocols. Having a team of specialists deal with your payroll and labour law is especially settling for businesses that are unfamiliar with local rules.
PEO/EoR is the most flexible and quickest way to launch your business into a new market. Hire employees and have a workforce on the ground in 48 hours!
To learn more about how Links can help you expand into Vietnam or another country in Asia, contact us now!
Join Our 2022 Vietnam Labour Law Webinar to Learn More
Got plans to grow your business in Vietnam or even start a new company altogether? The first thing you’ll need to do is be aware of local labour laws, so you can ensure you remain compliant with them.
Through Links International’s Payroll, Labour Law & Compliance Workshop series, we will be holding a COMPLIMENTARY webinar on the 7th of December at 11:00 am Hong Kong time to talk about Vietnam’s latest legislation and payroll updates. Don’t miss this chance to learn more on Vietnam’s labour laws, as we will also have an interactive Q&A session! Sign up now.
Our speakers, Alex Le & Van Nguyen, have vast experience in payroll compliance will be happy to take your questions as they share the must-knows of Vietnamese labour law.
Alex has over 12 years of experience in the HR industry and is an expert in payroll outsourcing solutions. He has a wide span of HR/Payroll and technical related experience, working with high volume payrolls involving complex integrations with Workday & SAP.
Van is responsible for managing our payroll team in Vietnam. Van has over 10 years’ experience in the payroll practice, as well as providing labour management and compensation & benefits advice in Vietnam.
This is a great opportunity to learn about the latest labour law updates, employment act, maternity leave, and much more! Take this chance to ask an expert any questions you may have on Vietnam’s rules and regulations!
- Vietnam Labour Law & Compliance
- Vietnam Payroll Basics
- Q&A Session
|Date:||Wednesday, 7 December 2022|
|Time:||11:00AM – 12:00PM HKT|
|Venue:||Online (Zoom) Webinar|
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, PEO/EOR Secondment, outplacement, recruitment and more! Contact us for more information on how we can help leverage your HR function.