Improving Business Environment
Vietnam’s business environment has been improving and is becoming an increasingly attractive place for business. With the country rising over 20 places since 2015 in the World Bank’s Ease of Doing Business Index, it comes as 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.
Common Challenges When Expanding into Vietnam:
1. Language Barrier
One of the most common problems overseas businesses face is the language barrier. Translators are often needed during business conversations and much of the paperwork needs to be conducted in Vietnamese. All foreign paperwork must also have the Vietnamese translation certified
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. At the start of this year (2021), the Vietnam Labour Law Code 2019 came into effect which included key changes to retirement age, employment contracts, work permits, and much more. For businesses, it can be difficult to keep up to date with the ever-evolving legislation.
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.
PEO – The Fastest Way to Expand into Vietnam Securely
Want to expand into Vietnam but don’t find these potential challenges and paperwork off-putting? Expanding your business’ presence overseas is an essential step in growing revenue, 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 much 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 new 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 Vietnam Labour Law Webinar to Learn More
To aid the businesses in or planning to expand into Vietnam, Links is holding a payroll and compliance webinar on the 23rd July 2021 from 11AM to 12PM. If you would like to understand Vietnam labour legislation, employment, taxes, and payroll then this is the perfect opportunity for you to learn more!
Links International’s payroll managers, Alex Le and Van Nguyen will be hosting the webinar. Both Alex and Van have extensive local knowledge and comprehensive knowledge of the new labour code introduced at the start of this year. The webinar is free of charge so sign up now!
|Date:||Friday 23rd July 2021|
|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.