The Vietnamese market is on an upward trajectory and it is owed to its ever-expanding middle-class and increased manufacturing and exports. The nation’s market is shifting constantly in flux with the changing consumer purchasing power and behavior. With the rise in income, the middle class is inclining towards a modern consumer-driven lifestyle, setting up the stage for foreign investors to invest in Vietnam’s market. Knowing how to do so with a full understanding of the market and a corresponding strategy is essential.
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In this article, we will talk about how foreign investors can make the best of Vietnam’s lucrative market through a successful Market Entry Strategy.
Market Research – The Stepping Stone
For a successful market entry in Vietnam, market research is the essential first stepping stone. It can assist investors to gain insight into the country’s constantly shifting market and devise business strategies accordingly. It helps a business remain competitive in the market while reaping maximum yields.
Market Research, as valuable as it is, should not be dealt with leniency or compromise. Professionals can do a much better job at market research and analysis than novices. Here are some of the top five market research companies in Ho Chi Minh City that can get you the desired results:
- Nielsen Market Research Company
- Market Research Company CI Research
- Khaosat.me Market Research Firm
- Q&Me Vietnam Market Research Service Company
After choosing the right market research partner for a company, it comes down to the initial investment and company incorporation in Vietnam.
Company Setup in Vietnam:
Vietnam makes it lucrative to invest in its market, however, it comes with drawbacks, expected of any developing economy. It is necessary to have a thorough grasp of the corporate environment as well as legal procedures.
For setting up a business in Vietnam, foreign investors can follow one of the following ways:
- Company Registration
Incorporating a business in Vietnam may be done via the following entities, with Joint-Stock Company and Limited Liability Company being the most popular options among international investors. Read More.
- Business Partner & Selection
Collaborating with a local Vietnamese business partner will help you get closer to your company objectives. Companies importing and distributing goods in the nation should seek assistance from a local agent. Collaborating with a local Vietnamese business partner can help get closer to your company objectives much sooner. Companies importing and distributing goods in the nation should seek assistance from a local agent. Read More.
- Virtual Office
A virtual office is becoming increasingly popular among modern enterprises and startups. A virtual office may be provided with facilities and services to meet the company’s needs, depending on the supplier. Read more.
- Shelf Company
A shelf company has been formed and registered but is kept “on the shelf” after the incorporation procedure is completed. You simply buy the shelf company, after due diligence has been completed, with all necessary paperwork in place. As a result, a shelf company is a great alternative for firms looking to enter a new market quickly. Read More.
Government Incentives for Foreign Firms in Vietnam:
Vietnam has one of the most competitive tax systems in Southeast Asia, with the following tax benefits available to businesses and organizations:
- Corporate Income Tax (CIT) Incentive
New investment projects will be awarded preferential tax rates and tax breaks based on their location, industry, and magnitude.
- Import Duty Exemption For Fixed Assets
Import duty exemptions are available for projects categorized as approved sectors/located in encouraging areas, as well as products imported under certain conditions.
- Exemption of Land Rental Fee
A variety of investment projects are eligible for a land rental charge exemption if they meet certain criteria, such as investing in supporting industries or business areas, and/or in encouraging geographic regions.
What to Know About Free Trade Zones
Investing in Vietnam’s free trade industrial zones is the optimal way for foreign investors (looking to establish production and distribute their products globally) to enjoy various government incentives and investment perks. The incentives include: only 10% payable CIT for 15 years; 50% tax reduction on Personal Income; and tariff cuts on goods among ASEAN regions have lured investors from all over the world. The following are the notable Free Trade Zones in Vietnam, among the total of 250 industrial zones spread across the country:
- Northern Vietnam Key Economic Region (NVKER)
- Southern Key Economic Zone (SKEZ)
- Central Vietnam Key Economic Region (CVKER)
- Mekong River Delta Economic Zone (MeKEZ)
Strategy for Hiring Staff in Vietnam
The next aspect of the market strategy for investment in Vietnam is hiring staff as they make up the backbone of a company. The following strategies have been drawn up for businesses to help gain a better perspective on hiring staff in Vietnam:
- Hiring Talents: When it comes to doing business in Vietnam, talents are crucial to business operations and smooth maintenance. A business must ensure higher, yet competitive pay, better incentives, top-notch employee benefits in order to attract the best candidates.
- Professional Employer Organization (PEO): Partnering with a PEO can be highly beneficial for you in cutting overhead costs. PEO can handle all your talent recruitment, human resource, payroll, & administrative functions.
- Background Check on Employees: One must conduct a background check on their employees in order to stay ahead of legal compliances, avoid fraud, and get a better look into an employee’s previous work-life.
Ensure a Successful Market Entry Strategy in Vietnam with Cekindo
Although lucrative, a foreign investor must be aware of every aspect of making a market entry in Vietnam to rule out any mishaps. Company incorporation in Vietnam consists of multiple procedures that are time-taking and overly official. Having company registration professionals, like Cekindo, by your side can save you a great deal of time as well as provide you with a hassle-free experience. Cekindo provides a wide spectrum of ancillary services related to company registration, like legal consultancy, license and other documents acquisition, tax and accounting, and HR services. Due to the global pandemic, our services are now run entirely online and your business needs can be executed from wherever you are in the world.
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