Are there any legal differences between hiring an expatriate and a Vietnamese worker?
An expatriate worker must have a work permit to work in Vietnam (although there are some exceptions). Also, if an expatriate works with a contract of longer than three months, they must have statutory health insurance. All local workers are subject to social, health and unemployment insurance.
Has the increase in foreign businesses and workers affected labour laws?
The government has made it harder for expatriates to obtain work permits and work visas. The process is generally longer than it used to be, too. Theoretically, expats are only supposed to be doing jobs that Vietnamese people wouldn’t be able to do.
What’s the biggest issue employers face when it comes to labour laws?
Most labour disputes are centered around wrongful termination. In other countries, like the United States, it’s easier to fire an employee for poor performance. In Vietnam, if an employer gets angry at an employee and fires them on the spot, that’s unlawful termination. There’s a specific set of procedures that needs to be followed. It’s always best if both parties agree to amicably part ways if possible. If you’re an employer and want to terminate a labour contract, it’s safest to discuss it first with a lawyer.
If an employee believes he or she has been wrongfully terminated, what can they do?
Generally, when a labour contract is breached by an employer, the employee may directly send his or her contract-related demand to the employer for remedy or request help from the trade union. The employee may also terminate the labour contract, make a complaint against the employer to the labour authorities or bring the dispute to a labour mediator or to the court. An employer who breaches a labour contract will be, depending on the seriousness of the situation, subject to paying compensation and reinstatement of the rights and benefits of the employee, and may face an administrative penalty.
What advice would you give to somebody starting a new company in Vietnam?
The most important thing is to have a good labour contract that clearly outlines the rights of both the employee and the employer. And how well do you really know someone when you hire them? If the business relationship doesn’t work out, the legal ramifications can be severe. It’s best to start with a probationary period and then a one-year fixed term contract before signing a permanent contract.
Just the Facts
– Usually 8 hours per day, 48 hours per week.
– Should not exceed 50 percent of regular working hours per day.
– The worker is paid 150 percent of salary on normal working days,
200 percent on scheduled days off, and 300 percent on public holidays.
– Depends on the region. As of 1 January 2017, the minimum wage in HCMC is VND 3.75 million per month.
– An employee in normal working conditions is entitled to at least 12 vacation days per year.
– A local employee is entitled to sick leave allowance from the social insurance fund if the employee provides documentation from the healthcare provider proving just cause.
– The mother is entitled to six months of maternity leave.
– If she gives birth to more than one child at a time, she can take one additional month for each additional child.
– If a woman is in her third trimester of pregnancy, she is not permitted to work at night, work overtime or take business trips.
– A female employee can’t be subject to labour discipline while pregnant, during maternity leave or while nursing a child under 12 months old.
As with most laws and regulations, loopholes and exceptions abound. Be sure to consult a lawyer before making any legal decisions.
Why the Middle Class is Vietnam’s Future
City Pass Guide
It’s no secret that the middle class carries the economic stability of a country more than any other demographic. The recent growth of exactly this group of consumers, who have left the constraints of poverty and have reached a new quality of life, is a very good sign for all businesses in the country. Simply put, the growing middle class is the motor of Vietnam’s rapidly growing economy.
According to the Boston Consulting Group (BCG), the “Middle and Affluent Class” (MAC) is experiencing a significant increase from 12 million people as of 2014, up to a projected 33 million people three years from now. This will be around a third of the country’s total population, which is forecast to reach 97 million by 2020.
A member of the middle class is defined by a monthly income of VND 15 million or more, which gives them significant purchasing power. Keep in mind, however, that these numbers should be taken with a grain of salt. According to the Singapore-based Institute of Southeast Asian Studies, reliable data is difficult to obtain, since the discrepancy between a worker’s official salary and their unofficial income can be quite significant.
The Implications of Change
The influence of the growing middle class can be seen in many fields already, from restaurant businesses to office buildings and nice apartments; another good sign of increased purchasing power is the high quality of imported goods flowing into the country.
The change is evident everywhere and the Vietnamese are optimistic about their wealth increasing in the future.
According to the BCG, a staggering 92 percent of Vietnamese believe that they live a better life than their parents, and 93 percent believe that their own children will live in better conditions than they do now. This optimism contributes to the stable economic growth Vietnam is experiencing at the moment.
It’s not all good, however. One problem with the rapid development is the lack of consumer goods and distribution channels. While the real estate sector can easily keep up with the trend, shopping for suitable goods is sometimes a pain. The retail environment is simply not ready for the changing consumer behaviour, which creates occasional price and quality problems.
Resourceful business owners like Carey Zesinger of Havang prefer to see this problem as an opportunity to tap into the market.
Technology plays a part in this story as well. Vietnamese are avid internet users – a whopping 43 percent of members of the MAC are using the web on a daily basis; however, just 16 percent shop online. This may be due to a significant lack of trust and the low quality of many available online stores.
On the other hand, many businesses already know how to attract customers: by offering deals and discounts! There are few countries in the world where people are more actively hunting for deals than in Vietnam. Income class does not matter in this case: everybody loves a discount.
Trending to the Future
Of course, economic status doesn’t just affect retail businesses. Middle class families are also tending to invest in proper education for their children, which will in return increase their children’s chances of finding quality, good-paying jobs. This will help them support their own middle class family in the future. Moreover, good education increases awareness of social and health issues, which will in turn lead to responsible consumer behaviour. It’s a good cycle to start.
The demand for healthy food and high-quality, affordable goods and services ultimately drives our economy. Vietnam’s movers and shakers are beginning to realise that producing goods and services in the country will more effectively tap into the increased mass purchasing power. This, in turn, will create more and better jobs. We’re experiencing a period of economic transition in Vietnam, and this is driven in large part by the rising middle class.
When it comes to business, the window of opportunity is wide open. Of course, it comes with obstacles, risks and drawbacks. The competition is huge from both foreign investors and Vietnamese entrepreneurs. But there is rarely an opportunity without risk, so we wish you Chuc mung nam moi! May you dare and grab the rooster by the neck!
The Art of Driving Traffic
City Pass Guide
Everybody wants their website to be successful; everybody dreams of seeing huge numbers of visitors reading the blogs, articles and information pages that they have sweated over to get just right. However there is a lot more to driving traffic to your site than simply writing good content and sitting back. In short, don’t be content with your content - work it! So what else can you do to make sure as many people as possible get to see your work?
What is the Art of Driving Traffic?
In short the answer here falls into four distinct categories. Work in a structured way so each time you write, you write with a formula in your mind. Be consistent and over time you will see what works for you and what doesn’t. The art of driving traffic comes down to:
Quality of the content.
Search engine optimisation (SEO).
Internal and external links.
Use of social media.
Quality of the Content
The way that Google and other search engines work nowadays is completely different to the way it used to be. In the old days you picked a keyword, stuffed it into your article, posted it and away you went. The truth of the matter is that now Google and indeed your readers are craving good quality content. Nothing gives a site more authority than well-written, thoughtful and pertinent content. If your site is about washing machines there is no point rabbiting on about your new Ferrari.
Websites need a constant stream of good quality writing. The length of articles does not matter to a certain degree, though less than 300 words is pretty pointless. It is much better to get a reputation for writing 1,000 word articles that are articulate, interesting and funny. People will simply want to read your stuff if it is engaging.
Search Engine Optimisation
This is a real can of worms to a certain degree. Many people now have different views on how to tackle this thorny subject. There is no doubt that the old approach of stuffing a keyword into an article as many times as you can is old, tired and doesn’t work. Choose a smart, pertinent, long tail keyword and aim to get it into your piece about six or seven times for each 1,000 words. However, don’t just stuff it in anywhere. Be creative and make sure that the article just reads well. The ideal keyword stuffing should not be noticed by the reader.
In addition to your primary keyword you can use secondary keywords that pertain to your product. You can have as many of these as you want, and they only need to appear one or two times. So again if you are talking about washing machines you might want “soap powder”, “spin dryer”, “clothing”, etc. This kind of thing builds a rapport with your audience and Google’s algorithms recognise a pattern. Be consistent, try and get your primary keyword into an H2 heading and also make sure one of your photographs contains the keyword in its alt tag.
Internal and External Links
These work in two different ways. Internal links have the advantage of keeping people on your site. If in one article you mention a product or idea that you have discussed before, link to the relevant page on your site. The best way to do this is not to say “click here”, but simply mention the product or idea and use that as the link. So for example you might say, “Over the years it has been proven that these types of machines work better with softer water”. Then, “these types of machines” can link to a previous relevant article on your site.
External links are different. They need to link to sites with more authority than your own. So Google a phrase or item that you wish to use as an external link and see which sites are ranking well. Then simply link to that article. Over time Google will see that you are being constructive and will start to rank you. You also have the added possible bonus that a really big site might just link back. This is the dream scenario. I know of one site that got a link back from The New York Times that massively increased its traffic. The site maintains these numbers to this day.
Use of Social Media
Ok! You’ve written your piece, added the keywords and used internal and external links - what now? Well nobody is ever going to see it if you rest on your laurels at this point. Track down Facebook groups of interest and post the article with a decent clickbait comment. Be positive and creative. Like your own posts and get other members of your staff or friends to do the same. Each time someone likes it, it moves back up the page and has a greater chance of more likes.
Twitter is a much misunderstood medium, not least of all by me. For the most part people seem to tweet completely, badly written nonsense, but it can really work well on a business level. Each piece that you write can be tweeted about 10 times over a few weeks. Old articles that are still pertinent and not out of date can be rehashed and re-hashtagged. This gets a constant stream of interest on Twitter over a sustained period.
If your product is photogenic, never underestimate the value of a good photo. Use Instagram wisely and often. Build an audience that waits for your images. They say that a photo tells a thousand words, well this has never been more true. You can write the greatest piece of literature known to man, but you will never compete with a fluffy kitten - ever!
So there you have it. Build a strategy, be consistent, be positive and don’t be afraid to talk yourself up. Once your audience starts to recognise that you have something of interest to say, Google, Facebook, Twitter, Instagram and all the others will do the rest. Happy posting!
Vietnamese or Foreign Bank ‒ Which Is the Better for Your Business?
While foreign banking institutions had branches and representative offices in Vietnam starting in the late ‘80s, much of the landscape consisted of the State Bank of Vietnam (SBV), which originally operated as both a private and commercial bank.
In 1990, the SBV produced four offshoot state-owned commercial banks (SOCBs), each focusing on particular sectors of business: Vietinbank took care of the industrial business, Agribank focused on the agricultural money, international trade was taken on by Vietcombank and infrastructure development was handled by BIDV.
When Vietnam joined the WTO in 2007, foreign credit unions could begin to apply for 100 percent ownership in Vietnam, an attractive prospect for countries like South Korea, which was (and still is) investing billions of dollars in Vietnam every year. As Maxfield Brown, Editorial and Research Specialist at Dezan Shira & Associates told us,
“The big foreign banks that are in the country, they’re primarily focused on the commercial perspective on the biggest investors. They want to make sure that they’re targeting Nike when it comes into the country.”
Right now there are seven foreign banks operating independently in Vietnam:
As more multinational companies enter the market, more foreign banks are vying to be the eighth, Citibank in particular.
However, there are many more foreign banks that operate as representative branches – 49, according to the SBV’s website – and they offer most of the same services, depending on your needs.
Foreign banks are definitely a cause for worry for domestic banks, but not as much as you might think. For one thing, local banks know the market better than any foreign bank could, and name recognition goes a long way in Vietnam.
This has prompted some foreign banks to become strategic investors instead of direct competitors. This option is becoming ever more attractive as the investment cap has been increased from 15 percent to 20 percent thanks to the recent adoption of Decree 01.
Japan, which has no independent bank in Vietnam but is the second-largest foreign direct investment (FDI) presence, is the best example of this. Brown considers this a long-term plan, and a good one at that:
“Over time the threshold for investments is going to go up, and maybe 10 or 15 years down the line they might own those banks outright.”
So, say you’re opening a business and you’re trying to find the right bank that suits your fledgling company’s needs. You might think that a foreign-owned bank, which has more capital, a better reputation and international experience than a Vietnamese bank, is the way to go. Well, you’re probably wrong.
It all depends on the needs of your business. If you control a large company with sales overseas, sure, a foreign bank is probably your best bet. They’ll offer you more international coverage and provide easier ways to ship money back to your home base, if it happens to be abroad.
However, if you’re looking to open a small or medium-sized enterprise (SME) in Vietnam, a domestic bank is probably a better choice. As Brown reasons,
“If you don’t need to send your money out of the country all the time, and if you’re perfectly happy growing your business domestically, then Vietnamese banks are going to be much more interested in retaining your business.”
You might receive more attention than you would at a larger, international bank, since these banks are often subject to reporting requirements in their home markets that can slow the delivery of key services in Vietnam. Here are Asiamoney’s Cash Management Poll 2016 winners for the top banks for small businesses, both foreign and domestic.
How Viet Kieu Workers Are Changing HCMC's Job Market
Jesus Lopez Gomez
Julie Huynh, marketing and operations manager at Ho Chi Minh City-based bespoke tailor Rita Phil, has had a few experiences that remind her she’s not in Los Angeles anymore.
Speaking to #iAMHCMC, she said one that stands out to her was working with a local photographer. Huynh has worked with photographers in the US in the past, and the interaction there usually begins with a contract and a discussion of the fee.
But “photographers here [say] ‘oh, we’ll give you a good deal,’ ” Huynh said.
“I’m still learning to finesse that.” While she speaks Vietnamese well enough, “I still have a very Western attitude. I’ve been told I’m too aggressive,” a remark she said was more about her role as a foreigner in Vietnam than being a woman. She said Viet Kieu of both genders have to tread lightly here.
Huynh moved to Vietnam to join her sister at her a couture garment firm she founded, called Rita Phil. Huynh, a California-educated Vietnamese professional who was at that time working at an accountancy firm, made the leap to Vietnam in 2015.
Why? “It just seemed like the right time. I just wanted something different in my life,” she said, adding her mum and sister already lived in Vietnam.
Nguyen Phuong Mai, managing director for executive recruitment firm Navigos Search, said family is a commonly reported reason for Viet Kieus coming to Vietnam. Those who make the journey also express an interest Vietnam’s nature and a love of Vietnamese food as their big draws in coming back.
There are around five million Vietnamese overseas, according to the World Bank. In 2015, the Communist Party reported around 12,000 Viet Kieu—or “overseas Vietnamese”—had come to Ho Chi Minh City to either relocate permanently or to live as long-term residents.
The top reasons for returning were caring for ageing parents, a perceived ability to earn a higher salary in Vietnam and a love of Vietnamese culture.
The top factors overseas Vietnamese look at in evaluating a return was a suitably high salary in comparison to local rates, a clear career path forward and flexible work arrangements.
However, Nguyen said micromanagement was one of the biggest fears the Viet Kieu have expressed to her in coming to work in Vietnam.
Their biggest fear is “empowerment”, Nguyen said. “They’re afraid of [a] micromanagement style.”
A Western-educated employee has been invited to have a critical role and look for opportunities to innovate. So, she advised companies that want to successfully recruit and retain the overseas Vietnamese to offer recruits roles with a high degree of agency and self-determination. Like the Western classroom they come from, a Viet Kieu educated abroad will expect to have their questions and criticisms heard, something that may not be welcome in a more traditional setting.
Huynh said she’s seen that with new Rita Phil employees who’ve moved in from other firms with a more culturally Vietnamese setting.
Image source: hbr.org
“It’s a culture where you have to save face,” she said. For example, “if you have an argument with a coworker, [traditional Vietnamese employees] don’t want to engage that at all.”
Rather than trying to make her employees more like her, Huynh described a process in which a middle ground is negotiated between her Western training and the Vietnamese staff she oversees. For example, Rita Phil’s work schedule does not permit afternoon naps as some Vietnamese staff enjoy elsewhere, but she is working with her staff to decide the right length of time for their Tet holiday vacation.
“That’s an example of us transitioning and adapting,” she said. “When the Viet Kieu [perform] under the Vietnamese culture better, we can adapt our perspective better.”
The Three Kinds
Returning Viet Kieu broadly fall into three categories.
The first is what Nikkei Asian Review in 2016 called “pilot” actors helping foreign companies expand into Vietnam, such as Henry Nguyen, the prime minister’s son-in-law and McDonald’s’ first franchise partner.
The second are entrepreneurial actors who enter Vietnam and build something new, as Duytan Tran did. In 2010, he started eSilicon Vietnam, a semiconductor producer that Nguyen said was originally started with a group of 20 engineers. The US investors who acquired it a year later acquired a successful firm that had grown to a 100-person staff, Nguyen said.
The third are highly qualified professionals who move to Vietnam and are installed in leadership positions at local firms, as Nguyen has as head of Navigos Search. Online publication Vietcetera profiled Crystal Lam, a University of Chicago-educated Vietnamese woman who is currently managing director of lumber retailer Vinawood.
Huynh’s role as one member of Rita Phil’s leadership team doesn’t excuse her from performing some of the business’s toughest work. “We’re still just a startup,” she said, adding the business has been able to expand globally—her responsibilities are specifically the US, Australia, Canada and United Kingdom markets. The company has done so on a lean staff you could count on two hands.
So, “any great idea you do have...you have to do it yourself,” Huynh said, laughing.
Video source: Vietcetera
In the Office as in the Classroom
Vietnamese living abroad to who come to Vietnam have a complicated relationship with their work environment almost immediately.
For one, corporate structures in Vietnam tend to be more top down and hierarchical, according to Nguyen.
She said Vietnamese management expects more deference from their employees and adherence on the agreed-to goals. It’s a reflection of the typical Vietnamese classroom where rote memorisation and lecture-style instruction are the mainstays of the educational philosophy. Because colouring outside the metaphorical lines or giving anything other than the back-of-the-book answer in school would earn a Vietnamese reprimand or even punishment in a school setting, the work environment that students move into after schools tends to hew very rigorously to standardards and authority, Nguyen said. Management can feel empowered—and often is, if not officially then implicitly—to tightly manage staff.
Image source: ibb.co
This, Nguyen said, was a key concern for Vietnamese abroad thinking of making the move to Vietnam.
Nguyen said the other big bugbear for Vietnamese who are recruited overseas is the local business culture’s tendency to mix emotions and business. It’s a conflation that a Western-educated worker steeped in a work culture with a heavy emphasis in meritocracy may bristle at.
Here, “people treasure [the] relationship,” Nguyen said. “Many Vietnamese companies here, they let the relationship or personal feelings get in” to their business dealings.
Those entering the local business scene “need to be more aware of that.”
“We Need a Viet Kieu”
By law, only if a company can’t find the necessary talent at the local level can they expand their search. Nguyen said companies said Viet Kieu are usually among the last candidates to be looked at, although she has in the past worked with clients who’ve specifically asked for a position to be filled by a Vietnamese abroad.
Image source: studentexchange.vn
“We’ve seen that. Companies will say ‘We need a Viet Kieu,’” Nguyen said. These are roles where the experience of a business person living abroad while also having an understanding of Vietnamese culture are needed.
“It’s better still if they can speak Vietnamese,” she said.
For companies that are recruiting a leader who will themselves recruit and build a new department within the company, a Viet Kieu is preferred, Nguyen said.
Nguyen said it can take maybe two years for local Vietnamese to see a returning Viet Kieu as one of them. Until then, they’re just another Westerner.
That’s usually the proper amount of vetting time a Viet Kieu would need to see if their life in Vietnam has legs, Nguyen said. Those who come have many reasons for living here, but after a year or two, those who have settled here either do so permanently or find a stopping point for this chapter in their lives.
Huynh spoke to #iAMHCMC having recently decided to extend her stay in Vietnam another two or three years.
Professionally, “I’m not really giving up…anything.”
“People [who want to] make the jump to come…that’s what they think,” she said. “I’m following a path I wasn’t sure I wanted,” Huynh said.
“Vietnam is obviously growing. The economy is getting better. I think it’s prime time for Vietnam.”
Banner Image source: orbitz.com
How to obtain a temporary resident card in Vietnam?
City Pass Guide
What are the cases in which a foreigner can obtain a temporary resident card in Vietnam?
- He/she is member of diplomatic missions, consular offices, representative offices of international organisations of the UN, intergovernmental organisations in Vietnam, or the spouse, child under 18 years of age, housemaid that comes along during his/her term of office. In this case, he/she will be issued with a temporary resident card NG3.
- He/she has a visa of type LV1, LV2, ĐT, NN1, NN2, DH, PV1, LĐ or TT. In these cases, he/she will be issued a temporary residence card NG3.
What do the codes of common visa types in Vietnam mean?
NG3: Issued to members of diplomatic missions, consular offices, representative offices of international organisations affiliated with the UN, representative offices of intergovernmental organisations and their spouses, children under 18 years of age, and housemaids during their term of office.
LV1: Issued to people who come to work with units affiliated with Vietnam’s Communist Party; the National Assembly, the government, Central Committee of Vietnamese Fatherland Front, the People’s Supreme Court, the People’s Supreme Procuracy, State Audit Agency, ministries, ministerial agencies, governmental agencies, the People’s Councils, the People’s Committees of provinces.
LV2: Issued to people who come to work with socio-political organisations, social organisations, Vietnam Chamber of Commerce and Industry.
ĐT: Issued to foreign investors in Vietnam and foreign lawyers practising in Vietnam.
DH: Issued to people who come to study or serve internships.
V1: Issued to journalists who have permanent residency in Vietnam.
LĐ: Issued to people who come to work.
TT: Issued to foreigners who are parents, spouses or children under 18 years of age of foreigners issued with LV1, LV2, ĐT, NN1, NN2, DH, PV1, LĐ visas, or foreigners who are parents, spouses or children of Vietnamese citizens.
What are the documents needed to obtain a temporary resident card in Vietnam?
The main required documents needed for the temporary resident card are:
- A written request from the inviting entity - A declaration bearing a picture - The passport - Papers proving your status (such as: Proof of residence registration with ward police where the applicant lives; Work permit (if applicable); Certificate, business registration certificate, licence of establishment of representative office, company branch (including announcement of activation), certificate of seal registration. In the case of family members, proof of relation can include a marriage certificate, birth certificate, or family book).
Note that any papers that are not in Vietnamese must be translated and notarised or legalised according to Vietnamese regulations.
Where can you apply for a temporary residence card?
According to the 2015 Immigration Law, an application for the NG3 temporary residence card must be made to the competent authority of the Ministry of Affairs while applications for other types of temporary residence card must be made at the immigration authority in the same administrative division in which the inviting entity is based or residing.
Therefore, for other temporary residence cards than NG3, your documents need to be filed with the Immigration Department. The government fee varies according to the duration of the temporary resident card, such as: one year: US$80; one to two years: US$100; two to three years: US$120.
How long does it take to obtain a temporary resident card in Vietnam?
Theoretically, the time frame for processing is between five and seven working days.
What is the address of public authority that you need to know to obtain immigration papers?
Immigration Department Office of the Ministry of Public Security 254 Nguyễn Trãi, D1; +84 28 3920 2300
Immigration Department Office of the HCMC Public Security 196 Nguyễn Thị Minh Khai, D3; +84 28 3829 9398