How Viet Kieu Workers Are Changing HCMC's Job Market

By: 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.

Untapped potential

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.

Viet KieuImage source: i.imgur.com

This may only be a fraction of the potential size of this community. Recruitment firm Robert Walters conducted a survey in which 70 percent of overseas Vietnamese professionals expressed an interest in returning.

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.

Viet KieuImage 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.

Viet KieuImage 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.

Viet KieuImage 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


Tips on Starting a Business in Vietnam

By: City Pass Guide

Whether you want to start an LLC, JSC, franchise or any other sort of local entity in HCMC, there are myriad problems – from cultural precautions to transparency to taxes – that ultimately drive away the uninitiated.

How do you even begin to enter this exciting, yet wild territory?

LLC or JSC?

For the purposes of brevity, we’ll look at two particular local entities: the jointly-owned foreign-Vietnamese LLC, and the JSC. The following information has been gathered with the aid of the Healy Consultants PLC website.

Joint-venture LLC – There are two shareholders in a joint-venture limited liability company: a foreigner and a local. This entity allows entry into many industries and foreign ownership can range from a maximum of 49% to 99%. These companies are required to have an appointed local legal representative, a capital account at a local bank, and a Foreign Investment Certificate (FIC).

Also required is a registered local address, a certificate of deposit from a local bank for the share capital ($50,000), and yearly audited financial statements.

This entity is best for foreign business owners who want access to partially restricted industries, and when the business owner has a local partner they trust. It takes about three months to set up.

JSC – For a joint stock company, there must be three shareholders of any nationality, although one of them must be appointed as the legal representative of the business. If that representative is a foreigner, they will be required to get a work permit and show proof of at least one year of management experience.

In addition, requirements include a bank certificate as proof of the funds available for investment ($10,000), the opening of a capital account with a local bank, an FIC, and annual submission of audited financial statements.

A JSC is a useful entity for anyone looking to start a business with more than two partners. The lower investment requirements are also a plus. It takes about two months to set up.

Labour and Tax

Kenneth Atkinson, the Executive Chairman at Grant Thornton Vietnam, pointed out two big factors to keep in mind:

The tax regime and labour laws are the two most important things to keep in mind. Both are quite complex. In the context of taxes, structuring your investments from a tax-planning perspective is very important. You have to ask yourself questions like, are you investing from your personal name? Are you investing through a corporate structure? What double tax treaties exist that make it beneficial to invest from, say, Singapore, instead of Hong Kong or the U.K. What is the impact of those regulations if you exit the business through a sale?

A thorough read of the Labour Code (vietnamlegal.com.vn is a useful resource) is a must, and when it comes to local taxes, Grant Thornton’s 2016 Doing Business in Vietnam report has a great overview of tax requirements.

 

Cultural Mindfulness

If you’re coming from an Asian country, you’re likely to understand the cultural ways here better than Westerners. Gone are brash negotiations, rapid-fire contracts and cutting to the chase. Vietnam in general is a long-term game that requires patience above all else.

The client meetings at karaoke bars (now slowly being overtaken by beer club meetings), the formal business cards exchange, the contract-over-drinks approach, the sheer politeness of it all – it’s all part of getting to know you as a person. People do business with whom they trust, and foreigners here seem to like these practices enough to uphold the local business culture. As Mr. Atkinson points out: “I actually prefer being handed a business card rather than some American guy flicking it across a table at me.” A final story from Mr. Atkinson:

In 1999, we had a fairly big project with the Asian Development Bank and the Ministry of Finance. I first went to dinner with these guys at the introduction of a Vietnamese friend. We had an enjoyable dinner and a few bottles of wine. Once it ended, my friend said they liked me, but they didn’t know Grant Thornton. So I said to one of the guys, What football team do you support? He said, Manchester United. I said, That’s great because we’re the auditors to Manchester United. Then two bottles of brandy appeared on the table and we stay there for another hour and a half. In the end we actually got the job.


The Advantage of Having a Powerful Business Network

By: Victor Burrill

Go some years into a corporate career and you may notice that the reality of climbing the executive ladder is - the further up you go, the less direct feedback you tend to receive, and the more difficult it can become to ask for support from your peers. You might also find that there is nobody you know who has the know-how to guide you towards making the right strategic decisions and effectively run your organization. Nobody is brilliant enough to go the distance alone and this became the inspiration for Vietnam’s very own executive group, The Business Executive Network (BEN). This young organization was established in 2017 as a support system for executives leading both local and multinational companies in Ho Chi Minh City. 

Business Executive Network

The network operates by holding monthly functions for its members, where they meet together to discuss current topics, share their professional challenges, and even meet informally at events such as lunches and social gatherings. The majority of these meetings are held confidentially and when necessary, are professionally chaired. 

There are three primary reasons why members join this network... 

- Some come looking to build strong business relationships.

- Others seek peer support in managing their companies. 

- And some come to receive insight for their own personal development. 

Whatever the reason, each session is designed to be relevant and applicable to all members. On top of this, it is the diverse community of ethnicity, industry, and experience that really gives BEN its unique edge.

Business Executive Network

To meet BEN’s requirements of membership, applicants should be business leaders who are operating companies in Vietnam with teams of 30 or more staff. In contrast, there are some members leading teams of thousands in Vietnam alone. These requirements can be flexible however, as the group can make, and has made in the past, exceptions through internal approval. This will often happen if an applicant has a particularly strong experience in management, ambition to develop his/her business in Vietnam, and shows good rapport with other members. 

Business Executive Network

The current vision for BEN is to be the first choice for executive development and support for business leaders in Vietnam, with goals to significantly grow their number of members in 2020. With more members come more meetings, larger peer groups, and a greater, more inspiring atmosphere at leadership gatherings.

The world over, there are businesses being run, and behind each business is a leader trying to make it succeed. It is not often that these leaders have a tightly knit group of fellow leaders that they can regularly meet and confide in. As part of the Ho Chi Minh City community we are always excited to see organizations like this one grow. We really look forward to seeing the Business Executive Network grow and reach new heights over the next few years. Will you come and join us on this exciting journey?

Are you interested in joining as a member of the Business Executive Network?

Contact us:
M: (+84) 969 645 653
E: tim.andre@businessexecutivenetwork.com
W: www.businessexecutivenetwork.com

Image source: Business Executive Network


Tourism in Vietnam: The Past and Future

By: Mark Gwyther

American presidents usually give a “State of the Union” speech to the legislature around this time, discussing the past year and what their goals for the future are. While I don’t have orange skin, here is my address about the state of tourism in Vietnam and a few predictions for 2017.

travel in vietnam

Looking Back at the Monkey

Chinese and Koreans All Around...

By any measurement, last year was an excellent year for tourism in Vietnam. Out of 29 countries, only Cambodia showed a drop in international visitors to Vietnam. In fact, the number of inbound foreigners increased by nearly 50 percent in the last four years.

Those of you in Saigon reading this English-language newspaper and working in the hospitality or tourism industry may be surprised or sceptical about the numbers. That is because Vietnam has been experiencing a tremendous shift in markets. Nearly 70 percent of this growth has come from China and South Korea alone, the two largest and fastest-growing inbound markets in 2016.

This shift accelerated in 2016 at a staggering rate. Between 2012 and 2016, the number of international arrivals to Vietnam grew by 3,165,000 people. Of that increase in visitors, 2,230,000 came from China and South Korea.

The reason for the increase is pretty simple: China and South Korea have large populations with a rising average income which is creating a larger middle class. People typically begin travelling internationally when their family income reaches about $1,500 per month. The first trip is usually to a country nearby with a familiar culture. Vietnam is a close, warm-weather destination with a familiar Asian culture.

 

growth in arrivals

 

… and Also More Westerners

You might think all this growth is great, but not really relevant to your business if you rely on American, European and Australian tourists. Sorry, those markets haven’t grown significantly. That is why on 1 July 2015, Vietnam’s government waived visa fees for five European countries for a 15-day visit.

So, did it work? Apparently it did.

Granting a few months for word to spread, from November 2015 through the end of 2016 each month saw a significant improvement over the same month the year before.

However, while the chart may look fantastic, the actual increase in 2016 for these five countries averaged about 9,700 more tourists per month. Even if the fee exemption was expanded to North America and Oceania, a similar jump in tourists would result in only an average monthly increase of about 25,000 visitors this year. China and South Korea combined to grow an average of 119,000 visitors per month in 2016 and this coming year will see an even larger increase.

Just how much larger, you ask?

foreign visitors

Looking to the Rooster

Here are a few predictions for 2017:

  1. The new electronic visa system will grow eligible markets by over 50 percent.

At this time, it is not clear who will be eligible, but this may have a greater positive effect on tourism than waiving the visa fee. It seems more likely that the current system of travellers sending their passport to a Vietnamese consulate is a greater barrier than the visa fee.

  1. The number of Russians travelling to Vietnam will double in the second half of 2017.

The number of Russian travellers to Vietnam increased by 28 percent this year from last year, though the number is only up 19 percent over a two-year period. However, with U.S. sanctions likely to be lifted, the Russian currency will rise in value. Political problems in Egypt and Turkey make Vietnam a safe choice for chasing the sun.

  1. The number of Chinese tourists will grow faster than in 2016.

Chinese citizens embarked on an estimated 60 million outbound trips last year, yet only

2.6 million were to its southern neighbour. Despite China already being far and away Vietnam’s largest market, there is plenty of room to grow.

  1. Total number of international visitors to Vietnam will surpass 13 million.

See #1, #2, and #3 above.

  1. A domestic Vietjet flight will leave Ho Chi Minh City on time.

Just joking!

Let’s not get too crazy with these predictions.


Choosing the Right Web Design for Your Business

By: City Pass Guide

A website is the base for all online activities of your business. However, having a badly designed website can be worse than having no site at all. To maintain a successful online presence in Vietnam’s competitive environment, you need to adhere to the one and only commandment of design:

Form Follows Function

The online environment in Vietnam is often colourful, confusing, cluttered and chaotic. Don’t fall into that trap. To set up a profitable website for your business, you need to think about the purpose first. What do you want to use your website for? Or rather, what will your customers want to do on your website?

Case 1: My customers just want my contact information.

In theory, a Facebook profile is enough for this purpose, but your own digital business card looks more professional. And when you own your own domain name, you can and should use it for your email address.

 

Case 2: My customers want some information about my company and our products/services.

A small website with a short introduction and one page per service or product, held together by an easy-to-use navigation system, should be enough.

 

Case 3: I want to keep my customers up to date with promotions, events and company news.

This calls for a small content management system, or CMS. A CMS is where you log in and change pages or add new posts. Usually people have a section of fixed pages on their website and an extra “blog” section, where customers can follow their updates. This is the best option for restaurants.

Case 4: I want to sell my products online.

Shop plugins are available for every major CMS. These are easy to use, cheap and versatile. However, often it is not exactly what you imagine, remember that you can hire a developer to customise the product. Be careful! Customers are entering sensitive data like credit card information, so make sure the security is top-notch. Nothing ruins your online reputation faster than a security leak.

Case 5: I want to be Number One and dominate the search results.

Now we’re talking! The design still follows the function of your project, but create a code as slim as possible to make the pages load quickly and efficiently. It is also imperative to follow the prime online commandment here: Content is King. Effective SEO is necessary as well, to keep on top of Google.

In the past it was easy to fool search engines into ranking your site higher – all you had to do was list your keywords a hundred times per page. Nowadays, programs like Google are much smarter and spamming will harm your business beyond repair. Your only chance is to create content your visitors love to read and pass on to others. For quality content creation, you either have to be multi-talented, hire somebody, or buy content from a third party. But beware, many companies are still stuck in 2005 and will sell you generic content that gets you nowhere. Choose wisely!

 


Vietnam’s Labour Laws: What You Need to Know

By: Keely Burkey

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

Working Hours

– Usually 8 hours per day, 48 hours per week.

Overtime

– 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.

Minimum Wage

– Depends on the region. As of 1 January 2017, the minimum wage in HCMC is VND 3.75 million per month.

Vacation Time

– An employee in normal working conditions is entitled to at least 12 vacation days per year.

Sick Leave

– 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.

Maternity Laws

– 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.


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