If you are planning on working in Vietnam, it is essential that you understand the country’s cultural values and traditions. Only then can you successfully develop strong business relationships. After all, cultural values are strongly reflected in the business environment.
The country saw a large degree of economic turmoil in the second half of the last century. The US-Vietnam war and the US trade embargo have left their mark. However, although the country faces some troublesome problems resulting from the international economic recession, it is enjoying a period of economic growth and as such, working in Vietnam offers many rewards.
While working in Vietnam, be it in Hanoi or Ho Chi Minh, you will soon find that Vietnamese companies function in a defined hierarchical manner. Decisions are made at the top, and more often than not, it’s the oldest person in the company who is the decision maker. For that reason, you have to make sure to pay respect to your coworkers and partners, especially if they are older than you.
Status is an important element of Vietnam’s business world and society. You achieve a certain status not through age alone but also through education when working in Vietnam. Although the business universe in Vietnam was once dominated by men, the country is moving toward a sexual revolution with increasing numbers of women populating senior positions.
Vietnam has one of the world’s lowest unemployment rates, placed at just 2.23 at the beginning of 2016.Since 1986, Vietnam has developed an economic success story. It went from one of the poorest countries in the world to a lower middle income status within a quarter of a century. Since the 2000s, the GDP has been growing sharply, and the poverty rate declined from 58% to 14%.
In 2015, the only country that experienced a growth in its exports was Vietnam, and the impact of the financial crisis was thus limited. In fact, the country was praised for handling the crisis efficiently, and experienced a GDP growth of 5.5% in 2014, and 6.5% in 2015.
Most of these achievements are due to government reforms in every key sector of the economy, which are agriculture, food industry, textile, furniture, energy, tourism, and telecommunications. These reforms consisted of privatizing public companies, improving the business climate, stimulating foreign investments, and the introduction of effective monetary policies.
They are the reason why Vietnam is a very attractive destination for skilled and experienced expats. With a high domestic consumption, and an increasingly FDI-friendly environment, there are a lot of opportunities to be taken.
There is, however, a thorn in Vietnam’s economic potential. In fact, the banking sector is handicapped by a large number of bad loans, and its insufficient capitalization is also a significant threat. However future prospects for the country remain positive; in 2016, Vietnam signed the Trans-Pacific Partnership (TPP), which linked it to eleven other countries in the Pacific. Furthermore, the potential in agriculture and energy, coupled with its skilled and inexpensive workforce, guarantee a good economic future. Moreover, the Vietnamese GDP is expected to have grown by 6.4% at the end of 2016.
To begin working in Vietnam, expats need to secure a work permit. To do this, foreigners need to have a work contract and an employer who is willing to arrange the details for them. They will apply to the local Department of Labor, War Invalid & Social Affairs in their city. The government is currently making reforms to simplify the requirements for the work permits, and extend exemptions. The last reform was implemented in April 2016.
There is an important list of exempted expats, and here is the explanation in detail of who is eligible:
Also, the employer will have to send documents to the Ministry of Labor, War Invalids, and Social Welfare. The ministry will confirm the exemption within three days, and this exemption will be valid for two years.
Any other foreigner working in Vietnam will need a work permit. They will have to send their documents to the Ministry of Labor, War Invalids, and Social Welfare. You must submit the following documents to the ministry at least two weeks prior to the beginning of employment, but it is highly advisable to begin the procedures a couple of months beforehand if possible:
The ministry will respond within seven days, and this work permit will be valid for two years.
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