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Business opportunities can be squandered if basic business protocols are not met. At the beginning, it is very important to focus on building trust and getting to know the counterpart. When meeting for the first time, business cards should be exchanged. The business will be discussed in the following meetings.

Background: The first meeting should not discuss business and should only be seen as an opportunity to get to know the counterpart and cultivate a good working relationship. Placing hands together and bowing is the most suitable form of introduction.

Businesses may find it difficult to communicate with the Vietnamese locals as many do not speak English. Maintaining productivity and efficiency may, therefore, be difficult.

Background: Vietnamese remains the dominant language as it´s spoken by 86% of the population. Due to emigration, Vietnamese speakers are found in many parts of the world, including East and Southeast Asia, North America, Australia and Western Europe. Vietnamese is a minority language in the Czech Republic.

If conducting meetings in Vietnam, even as a host, it is important to be patient for the guests to finish the meeting.

Background: In Vietnam, guests are the ones to dictate the tempo of the meetings.

In Vietnam, it is common to give presents in business meetings. Not exchanging gifts, however, should not traditionally hurt the business relationship.

Background: The gifts for business meetings can be small and need not to be expensive. A possible item could be a pen or stationary with a company logo or a common item from your country.

An investment license requires the approval of at least a dozen local institutions, hence increasing the occurrence of red-tape. Strong measures from the government and local level must be taken to combat corruption that is seeping in the business institutions. Foreign businesses might find it challenging to operate in Vietnam due to this concurrent problem.

Background: According to the Business Anti-Corruption Portal, Vietnam is characterised by corruption, a weak legal infrastructure, financial unpredictability and conflicting and negative bureaucratic decision-making. Surveys reveal that petty corruption has decreased significantly throughout the country, while high-level corruption has increased. This has slowed the development of Vietnamese enterprises.

Along with local policies, businesses must also be aware of macro-level policies. Vietnamese government can be biased towards protecting their domestic firms in terms of price subsidies, taxation policies, etc. This can discourage foreign companies from coming to Vietnam.

Background: Since the introduction of Doi Moi – or ‘renovation’ policy – in the 1980s, which began the transition from the country’s socialist economy to a market economy, Vietnam has experienced many significant changes, including a rise in the standard of living. These factors have in turn inspired a flurry of foreign businesses looking to start operations or expand in the country.

It is recommended to have business ideas translated to avoid communication pitfalls. One party can easily misinterpret and come to terms of agreement without having a holistic understanding. But translators also need to make sure that they understand and convey ideas properly.

Background: As most of the Vietnamese people do not speak English, it is imperative that there are translators while signing business deals. Translators enhance communication by conveying information accurately from one language to another, thus removing any potential misunderstanding.

According to experts, countries around the world, especially those in Northeast Asia, are very interested in Vietnam's ICT sector and see it as a driving force for innovation in the region.

Background: KPMG conducted a survey of more than 300,000 CIOs (IT directors) in 108 countries on trends in technology investment and digital transformation of businesses. In particular, Vietnam is ranked 2nd in 108 countries globally for commitments to make investments in IT and ranks 3rd for commitments to bring automation into business and production. Although in the past 5 years, the investment level of enterprises in IT in Vietnam is still quite low (at 2%) compared to ASEAN (about 5%) but it is increasing every year. Manufacturers are gradually transitioning to automation. Notably, in 2019, businesses in Vietnam were paying great attention to investing in robots for automation production.

The wave of technology investment and digital transformation is opening up a breakthrough opportunity for Vietnam's information technology industry to transform itself from outsourcing to innovation. Numerous necessary and sufficient factors have converged for Vietnam to become the leading "Innovation Hub" in Southeast Asia.

Background: The Government of Vietnam and Ho Chi Minh City (HCMC) are also implementing construction projects to build smart cities across the country, promote creative start-up programs and projects to build HCMC into a regional and international financial centre. This is a great advantage for Vietnam, especially for businesses that want to deploy products based on new technology. It is a golden opportunity for Vietnam's IT industry to break through and become the ‘leading innovation centre’ in Southeast Asia.

Vietnam´s economic growth in the past few decades has been transformational. Whilst proper developmental policies and frameworks can further slim the poverty rates, business production right now is better off due to the lower poverty rate and higher employment rate.

Background: By 2011, the poverty rate had dropped to 12%. Vietnam’s education system and educational efforts have also been largely successful. The education systems success is demonstrated by a 98% literacy rate in Vietnam.

Is it complicated for foreign companies to reach the Vietnamese market? How to behave during the first meeting with Vietnamese business partners? Take the Cube In quiz and test your knowledge on this Southeast Asian country!

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Last updated: 24.08.2020 - 15:00
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