Business in Vietnam

Business Culture

Vietnamese business culture focuses on both social connections and seniority, particularly when dealing with the Vietnamese government or any state-owned organization.

Most Vietnamese business connections are initially made through referrals and recommendations from associates: with this in mind, hiring a Vietnamese interpreter and having a local Vietnamese representative is important when entering negotiations with potential partners.

Business Communication

Generally, Vietnamese business decisions are done by committee, with the result that the connection that is made with the group is of paramount importance, overshadowing any individual personal connections (as may be the case in other Asian cultures).

However, it’s important to note that if a Vietnamese business client disagrees with an opinion, they may remain silent so they don’t “lose face” or offend.

Business Etiquette

• The Vietnamese business dress code is generally conservative; however business-wear in South Vietnam is more casual, with suit jackets not necessarily required.
• Seniority is an important part of Vietnamese culture.
• Your Vietnamese business host will usually arrange for a dinner during the earlier part of your visit. It’s customary that you return the courtesy and arrange a dinner near the end of your trip to Vietnam.
• Toasts are commonly exchanged during Vietnamese dinners. When toasting your host, stand and raise your glass in both hands in the direction of the most senior Vietnamese member. Subsequent toasts may be made afterwards and can be answered from your seat. It’s customary that the host performs the first toast.
• The meal usually ends with a dessert or fruit plate. When leaving, it’s recommended that you shake hands with all Vietnamese participants, following rank.

Import and Export Regulations

You must register with the Department of Planning and Investment (DPI) if you intend to import goods from Vietnam, and provide a custom declarations form for export goods, a detailed packaging list, an export permit (for goods that require it) and a purchase and sale contract or receipt.

Vietnamese regulations ban certain goods from being imported to, or exported from, Vietnam. These banned goods include petroleum oil, which cannot be exported from Vietnam. The importation of cigars, tobacco products, petroleum oil, newspapers, journals or aircraft to Vietnam may not be attempted by foreign entities.

Certain other items also require specific import/export permits, including chemicals, explosives, and goods that are exported within quotas set by foreign countries.

Imports and exports that move across the Vietnamese border are usually subject to duties, with the exceptions of goods that are in transit and goods exported abroad from a non-tariffed zone.

Duties on Vietnamese imports and exports can vary based on Vietnam’s trade conditions with the respective country, as well as the types of goods being imported or exported. Export duties can range from 0% - 45% and must be paid within 30 days of registration of a customs declaration. You can learn about the duties specific to your business and country by visiting the Vietnam Customs website.

Most Vietnamese exports are subject to VAT of between 0% - 10%, but some are exempt, including goods that temporarily leave Vietnam before returning, usually for some form of processing.

When calculating the import/export tariff on your goods, you multiply the product’s unit volume (noted in customs declaration) by the tax calculation price and the product’s tax rate (noted in tariff).

Business Advisories in Vietnam

Vietnam’s developing infrastructure, allied to onerous bureaucracy and endemic corruption may pose problems for foreign importers.

Corruption in Vietnam affects the judiciary, policing and Vietnamese businesses. One way to avoid encountering corrupt practices is to work through a Vietnamese local distributor. This also gives the knock-on effect of speeding up the bureaucracy inherent in securing a deal with a supply partner.

Payments in Vietnam

During Covid-19, digital wallets as a payment mechanism reached a high level of acceptance throughout Vietnam. In 2021 the value of digital transactions, including card payments, reached 12.3 billion USD. Whilst cash continues to be popular, the government aims to accelerate the country’s move to cashless payments, with most Vietnamese businesses using wire transfers to send funds.

The Key to Successful Business in Vietnam

Engaging a local Vietnamese representative or distributor for your business could greatly benefit any potential supply deals, as the Vietnamese prefer to deal via referrals and recommendations. The benefits of hiring one or more Vietnamese employee/s include having an informal method of interpreting and translating local business practices, and can make a significant difference in the Vietnamese bureaucratic process.

Vietnam Business Information