Vietnam is a country that has seen significant economic growth in recent years, making it an attractive destination for foreign investors. However, many potential investors may be deterred by myths and misconceptions about the process of setting up a business in Vietnam as a foreigner. In this article, we will examine some of the most common myths about foreign investment in Vietnam and provide accurate information to help potential investors make informed decisions.
Myth 1: Foreigners are not allowed to own a business in Vietnam
This is not entirely true. While there are certain restrictions on foreign ownership in certain sectors, such as real estate and banking, foreigners are generally allowed to own and operate businesses in Vietnam. In fact, Vietnam has made significant efforts to attract foreign investment in recent years, including by enacting laws and regulations that make it easier for foreigners to invest in the country.
Myth 2: The process of setting up a business in Vietnam is complicated and time-consuming
This is also not entirely true. While the process of setting up a business in Vietnam can be more complex than in some other countries, it is not overly burdensome. In fact, the government has made efforts to streamline the process in recent years, and the establishment of special economic zones and the implementation of an e-commerce law have made it easier for foreigners to invest in the country.
Myth 3: It is difficult to find and hire qualified employees in Vietnam
This is not entirely true. While it is true that the labor market in Vietnam is not as developed as in some other countries, there is a large pool of qualified and skilled workers available for hire. The government has also made efforts to improve the education system in recent years, which has led to an increase in the number of highly-skilled workers in the country. Additionally, many foreign investors have found success by partnering with local companies or using recruiting agencies to help find qualified employees.
Myth 4: It is difficult to access financing for a business in Vietnam
This is also not entirely true. While access to financing can be more difficult in Vietnam than in some other countries, it is not impossible. The government has made efforts to improve access to financing for businesses in recent years, including by enacting laws and regulations that make it easier for businesses to access credit. Additionally, many foreign investors have found success by partnering with local companies or using alternative forms of financing such as crowdfunding or angel investing.
The move of international companies towards Vietnam has been on the rise in recent years, as the country has become a more attractive investment destination with its positive economic outlook and relatively low cost of doing business. However, foreign companies looking to invest in Vietnam should be aware of the restrictions that the government places on certain business fields. It is important to note that while Vietnam is a member of the World Trade Organization (WTO), there are some areas in which foreign companies are restricted from doing business without approval from the government.
The Vietnamese government restricts foreign companies from engaging in certain business activities in order to protect local businesses and industries. These restrictions are known as the Decree on Investment in Industry and Trade (DPI), and they specify which areas foreign companies are prohibited from engaging in. Generally speaking, these are activities that are considered to be sensitive or which could potentially have a negative impact on the local economy. For example, foreign companies are restricted from engaging in the production and distribution of pharmaceuticals, tobacco, and alcohol, and the operation of certain financial services.
In addition to the DPI restrictions, there are certain areas in which foreign companies can only engage in business activities with approval from the government. These areas are known as “restricted business fields”, and they include activities such as the production and distribution of certain goods, the provision of certain services, and the operation of certain financial institutions. Generally speaking, these activities require approval from the government because they could potentially have a negative impact on the local economy or they could be harmful to the public interest.
In order to receive approval to engage in restricted business fields, foreign companies must submit an application to the government, as well as provide evidence that the business activity will not have a negative impact on the local economy or public interest. The government will then review the application and make a decision based on the evidence provided. If the application is approved, the foreign company will be granted a license to operate in the restricted business field, subject to certain conditions.
Furthermore, foreign companies looking to invest in Vietnam must also take into account the country’s commitments under the WTO agreements. While the WTO agreements do not impose restrictions on foreign companies, they do require the country to ensure that foreign companies are treated in a fair and non-discriminatory manner in comparison to local businesses. This means that, in certain cases, the government may be required to grant foreign companies the same rights, privileges, and immunities that it grants to local businesses.
In conclusion, setting up a business in Vietnam as a foreigner is definitely possible with the help of a knowledgeable and experienced professional, the process can be completed relatively quickly and smoothly. If you’re looking to start a business in Vietnam, don’t hesitate to reach out to Metasource for assistance. We’re here to help you make your business in Vietnam a success.