Challenges and opportunities for business in vietnam

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Presentation at Vietnam Open for Business seminar, Mar 13 2014.

Presentation at Vietnam Open for Business seminar, Mar 13 2014.

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  • 1. Challenges and opportunities for business in Vietnam - A comparative perspective March 13, 2014
  • 2. 2 Nokia in Asia • In China Nokia is one of the largest Whole Foreign Owned Enterprises in China, with presence since 1985 and two major mobile phone factories. • In India, Nokia has been running the currently world´s biggest mobile phone factory since 2006. • In Vietnam, a new mobile phone factory opened summer 2013. • In these countries, and many others, also sales and marketing teams and in China and India also R&D.
  • 3. 3 The circumstances in Vietnam • All in all Vietnam offers a modern environment for a global export business - there are diverse operating models for a foreign investor. • Benefits are based on legislation: If one fulfils the criteria in the legislation, the benefits will be granted to you. The culture is not one of customised models per company. • The phase of negotiating the investment certificate can be slow and bureaucratic. • Vietnam´s ability to utilize the benefits of digitazation and ICT are unique in Asia, eg. electronic customs clearance functions well. • Some challenges still in terms of supply of adequate competences, the Government needs to work on improving the education system. • At the same time bringing in foreign workers to bridge the competence gap is not easy enough. • Some pressure for using local suppliers – there is a need for the Government to work on improving the skills and competencies of the local companies. • Corruption has not been an issue for Nokia even though it is said to be common in Vietnam generally.
  • 4. 4 Success factors Vietnam - When negotiating the investment certificate, a deep knowledge of the legislation is a key. - At this stage also a good relationship on the high, central government level is important. - In the on going business stage the relationship with the local authorities gains more importance. China - Understanding the national interests and the priorities of the 5-year plan, as well as and target alignment. - Understanding the key performance indicators of the central and local government officials. - Building and maintaining a network of senior officials who are sympathetic to your causes, on central and local level India - Engaging experienced local lawyers and consultants. High risk ratio at the moment.
  • 5. 5 Other points to pay attention to Watch the following factors - Economic situation – e.g.budget deficit? - Political stability – upcoming elections? - The stage of industrialization – impact on cost development? - Membership in WTO? - General administrative culture - based on legislation or personal relationships? - Do you have flexibility to react to increased risks caused by the above factors?
  • 6. Thank you