Support solutions for companies which want to set up in Vietnam
Several years ago, it was complicated for a company to establish itself in another country. Today, there are solutions to carry out all the steps to set up a business (market study, renting an office, sales prospecting, recruitment, accounting...) in Vietnam at a lower cost. We met Thierry MERMET, co-director of Source of Asia, who told us about his activity here in Vietnam.
SOA was founded in 2007 and has a team of 40 people specialized in international business development in South-East Asian markets.
About 15 years ago, a company wanting to set up in Vietnam started by making a prospecting trip to discover the market and meet potential suppliers, customers and investors. Then, it was necessary to rent an office, establish a legal entity, recruit an expatriate and send him or her there. The expatriate in turn had to settle down, recruit staff and manage the local entity. Even before starting the commercial activity, many expenses were incurred. Only international groups could afford to come to Vietnam and the market was therefore reserved for them.
Today, everything has changed. SMEs wishing to set up in Vietnam now have at their disposal a whole range of services to limit start-up costs and facilitate their establishment on the Vietnamese market.
To start sales, there is a solution to ensure a permanent presence of the business customer on Vietnamese soil without hiring anyone (expatriate or local). A team member is seconded from the hosting company, such as SOA, to the business customer on a part-time or full-time basis. This is called time-sharing sales representation or outsourced export management. The employee is trained on the product remotely by the business customer and works in the name and on behalf of it: participating in meetings or events, finding suppliers or partners, approaching customers... The advantage of this solution is that it is flexible and meets the needs of the business customer, because it decides how much time the employee spends on its activities according to its needs.
If the development of the company requires the hiring of an employee, whether local or expatriate, the company must create a legal entity to pay the employee and apply for his or her work permit. The creation of a legal entity is a relatively easy process (except for sensitive activities), but it requires time and money. On the other hand, legally closing a business is very complicated and usually takes 6 to 8 months. There is a solution to remedy these problems: wage portage and hosting. The employee, hired either by the business customer or with the help of the hosting company, will be paid by the latter and will be able to work directly on its premises and benefit from a work permit. The developing company will then have no steps to take with the Vietnamese government, but will appear to have an office in Vietnam under the name of the hosting company. At any time, the business customer may terminate the contract, considering of course the local applicable laws.
However, there are some companies that are obliged to have a legal entity. In this case, these can be registered in the offices of the hosting company, which can also manage the human resources and accounting of the developing company. This facilitates the process, as it should be noted that a company that creates a legal entity in Vietnam is subject to an audit by a government-certified chief accountant, regardless of its activities level in the country.
In conclusion, thanks to these outsourcing services, people wishing to set up their business in Vietnam will decide, after each step taken, whether to do the next one or not. These services also allow them to set up their business at lower cost and to be flexible. Finally, consulting companies offer experience in business relations with Vietnamese people. Thierry specifies that Vietnamese professional codes are different from other countries (like China, South America, India...), which makes Vietnam hardly comprehensible to an European.