Setting up and doing business in vietnam aug2017 v2 (6in1)

8/18/2017
1
LEE Kar Heng
Setting Up
and
Doing Business
in
1
About the Seminar
Objectives
Topics
2
• To share our experiences in setting up
companies and running businesses in Vietnam
• To discuss the current Vietnam business
environment
• To highlight problems and challenges and how
we overcome them
• To offer services in business license acquisition
and business operations management
Objectives
3
1. Entrepreneurship in Singapore and Vietnam
2. Setting Up and Doing Business in Vietnam
3. Challenges and Real Problems
4. Dealing with Locals
5. Industries and Profession Level to Enter
6. Assistance and Funding (New)
7. Sharing - Our Experiences
Topics
4
About the Speaker
Contacts
Work
Teaching Leader Roles
Professional Activities
Publications
Voluntary Works
5
Contacts
Name: LEE Kar Heng
Email: lkarheng@gmail.com
Mobile: +65 9191 6893, +84 1638 006 000
Facebook: https://www.facebook.com/karheng
(personal interests, thoughts, comments and reflections)
Linkedln: https://www.linkedin.com/in/karheng
(professional profiles and short articles on business and entrepreneurship)
Academia: https://edithcowan.academia.edu/KarHengLee
(technical papers, students’ projects, course materials of academic
programs and short courses)
Slideshare: http://www.slideshare.net/karheng1
(company information of TBSS Companies and Partners)
6

8/18/2017
2
Academics
§ Top 3 student, GCE ‘O’ Level, Tiong Bahru Secondary School
(TBSS)
§ Diploma in Electronics and Communications Engineering, SP
§ B.Tech(Hons), NUS
§ Dean’s List in 4 out of 8 Semester, B.Tech(Hons), NUS
§ Asia Compaq Book Prize, Top student in Year 1998,
B.Tech(Hons), NUS
§ M.Eng Electrical Engineering, NUS
§ M.Sc Control, Information and System Engineering, Sheffield
(UK)
§ Certified Teacher in Higher Education, SEDA (UK) and TP
§ Certificate in Principles of Continuous Wave Radar,
GeogiaTech (USA)
§ Ph.D Engineering Management MHU (USA)
7
• TBSS Group (Current Job)
• Ministry of Home Affairs
– Police Technology Department (Maritime)
• Defense Science and Technology Agency
– Sensors
• DSO National Laboratories
– Radar Systems
• Maritime and Port Authority
– Electronics and Communications
Work
8
• Institute of Technical Education
‒ Electronics
• Temasek Polytechnic
– Telecommunications
• Republic of Singapore Navy
– Fire Control Systems
– Certified Instructor
Work
9
• TBSS Group
– Designed, developed and delivered
professional courses:
• Electronic Warfare for the Republic of
Singapore Air Force
• Radar Systems for Operations and
Maintenance for Raytheon Anschuetz
• Radar System in Aviation, Maritime and
Defense for Air Defense Operations
Command, Singapore Technologies
and Police Technical Department
• LTE with Military Applications for Army
Signal Institution
• Understand EMC for Ammunition
Command and DSTA
Current Job
10
• TBSS Group
– Organzied and delivered lecture on
Coastal Surveillance System for the
Border Defense Force, Vietnam
– Installed, Commissioned,
Integrated and Tested 2 Vessel Traffic
Radars for the Port of Hai Phong,
Vietnam
Integrated and Tested 3 Vessel Traffic
Radars for the Port of Cai Mep,
Vietnam
Current Job
11
• TBSS Group
Integrated and Tested 1 Coastal
Surveillance Radar and AIS
Transponder for the Vietnam Navy
Integrated and Tested 2 Radar
Training Systems (PSR and FMCW)
for Vietnam Military Academy
Integrated and Tested 1 Surface
Movement Radar for the Civil Port
Authority, Pakistan
Current Job
12

8/18/2017
3
• TBSS Group
– Installed, Tested and Configured
Security and Surveillance for
Bowker Garment Vietnam (the
Addidas and Reebok Apparels)
Video Analytic System for Apple
Premium Retails in Vietnam and
Cambodia
Camera Surveillance for Roche
Building, Singapore (the Addidas
and Reebok Apparels)
Current Job
13
• TBSS Group
Security and Surveillance for
Bowker Garment Cambodia (the
Addidas and Reebok Apparels)
Traffic Analysis System for Apple
Premium Store in Vietnam and
Cambodia
– Acquired Business Licenses, Set Up
Offices and Manage Business
Operations for Singapore
Companies in Vietnam
Current Job
14
Setting Up and Doing Business
in Vietnam
Entrepreneurship in Singapore
and Vietnam
15
Entreprenuership
• Includes setting up a business, taking on
financial risks and managing business
opportunties with the hope to success
• A successful entreprenuer
• millionaire? billionaire?
• luxuous vehicles? big houses?
• feed family well
• When one starts a business, the usually objective
is to substitute fixed salary with profits earned
via doing business
• hence, when one achieves substituting fixed salary and
survive, he or she is successful in his or her
entreprenuership
?
16
Businesses in Singapore
• TBSS is a specialist company
• specialized in radar, coastal surveillance, vessel
traffic system (VTS), industry surveillance and
security
• provides training, consultancty, engineering
services, project management in specialized areas
• one-stop business service: business license,
business operations, business maintenance
• In Singapore, we have to work under big
brothers in such jobs, ST, NCS, ...
17
Businesses in Singapore
• Limited opportunities
• “why don't you work for us?”
18

8/18/2017
4
Businesses Outside Singapore
• Where?
• Vietnam - offers greater
opportunity in
specialized domains
(radar, coastal
surveillance, VTS, ...)
• Coastline: 3,260
kilometers!!!
• Not fully exposed to
advanced technologies
19
Businesses and Entreprenuership in
Vietnam
• “Vietnam is not known as a country of
innovative risk-takers, but across the big
cities, young entrepreneurs have been
breaking out of the conservative mould and
taking a shot at starting their own
businesses.”, CNA 28 Nov 2015
• “Young Vietnamese are more more
enterprising than Singaporeans in the
service and tourism industries.”, TBSS
• online shops, freelance tour services, delivery, ...
20
Vietnam
• Vietnam joined the WTO in 2007,
• gradually liberalising the retail market
• easing regulations and previous laws that had
required specific planning permission for any
foreign-owned outlet larger than 500 sq metres
• Under WTO agreement, since January 2015
Vietnam has allowed foreign retailers to set
up businesses with 100% foreign capital
21
Vietnam
• Big names are moving in to offer more
choices to the Vietnamese consumer
• According to a report released by the
Ministry of Industry and Trade (MIT) in
early 2017, foreign retail enterprises now
hold
• 17% retail market share in shopping centres and
supermarkets
• 70% in convenience stores
• 15% in minimarts, and
• around 50% in online, TV and phone sales
22
Singaporeans in Vietnam
• There are basically two types:
• employed ones and entreprenuers
• Employed ones are largely deployed by
their parent companies to work in Vietnam
• live a more luxuous lifestyle
• solve daily routine problems
• have understanding of Vietnam culture but not
the real ground problems
• many still can't speak Vietnamese even after
living in Vietnam for many years
23
Singaporeans in Vietnam
• Entrepreneurs in Vietnam are largely
problem solvers and achievers
• experienced hardship living in Vietnam
• travel local modes, i.e., motorbikes
• went through all the processes to get works done
• largely speak Vietnamese
• have a real understanding of locals and problems
facing
• Did Singapore help? or is their assistance
useful?
24

8/18/2017
5
in Vietnam
Setting Up Business in Vietnam
25
• Issued by the Ministry of Planning and
Investment (MPI)
• Administered by Provincial Department of
Planning and Investment (DPI) outside Hanoi
• Do you need a law firm to obtain the business
license?
• Same question, do you need to law firm to register
with ACRA?
• No, but many law firms in Vietnam will advise you
to consult with a law firm for advice and service
offering
• You need a partner who knows the procedure,
requirements, conditions and DPI personnel
The Business License
26
• A private business enterprise
• owned by an individual and self-
responsibility in all their properties for all
activities of the enterprise
• each individual shall be entitled to establish a
private enterprise
• has legal status
• does not issue any securities
27
• A share holding company
– Has charter capital divided into equal portions
called shares
– Shareholders are only liable for the debts and other
property obligations of the enterprise to the extent
of capital contributed to the business
– Shareholders have the right to freely transfer their
shares to another person, except in some cases
– Shareholders may be organizations or individuals;
minimum number of shareholders is three and
there is no limit for the maximum number
– Has legal personality as from the date of issuance
of the certificate of business registration
– Has the right to issue securities to raise capital
28
• A limited liability company with one
member**
– common with Singaporean companies
– owned by an organization or an individual
– owner is responsible for the debts and other
property obligations of the company to the
extent of the company's charter capital
– has legal personality as from the date of
issuance of the certificate of business
registration
– may not issue shares
– company name carries - Cong Ty TNHH ...
Company Limited
29
• A limited liability company with two or more
members
– used to be common: 1 Singaporean with 1
Vietnamese
– Members responsible for the debts and other
property obligations of the enterprise to the extent
the amount of capital committed to the enterprise
– Members can be organizations, individuals and the
number of members shall not exceed fifty
– Has legal personality as from the date of issuance
of the certificate of business registration
– May not issue shares
– Common name carries Cong Ty CP (Shareholding
Company)
30

8/18/2017
6
• Business Type
– all licenses require business activities to be stated
– trading, engineering, projects, services, ....
– maritime, industrial, cosmetic, cameras, ....
• Company Name
– one Vietnamese name - Cong Ty TNHH Cong Nghe
va Giam Sat RADAR TBSS
– one English name (translated) - TBSS Radar
Technology and Monitoring Company Limited
• Address
– a legimate location for official correspondence
– working address where workers are housed
Setting Up Process
31
• Capital Required
– depends on the business plan
– subject to the approval of the provincial DPI
– In some business areas like real estate,
banking and finance, minimum capital is
required
– Non-conditional investment area, the law
does not specify the minimum capital
– State agencies will evaluate investment plan
for practicality of the amount
– Bank statement in foreign banks could be
used to prove sufficient fund of investment
capital
Setting Up Process
32
• Legal Representative
– to oversee the business performance and take
legal responsibility in Vietnam
– The expatriate who is one of the followings
DO NOT need a work permit
• capital contributing member or
• owner of a limited liability company or
• member of the Board of Management of a
shareholding company
– The work permit holder would then apply for
temporary residence card to live in Vietnam
as long as the work permit allows
Setting Up Process
33
• Company Structure
– one member limited liability company
– two or more member limited liability company or
joint stocks company
• Duration
– depends on type, scale, and whether or not
conditions are required (completion and
furnishment of details are important)
– a simple minimum capital without conditions
company would take 30 working days (we usually
get it within 1-2 months)
– a company in conditional investment areas that
involve other State agencies it would take about 3-4
months
Setting Up Process
34
• Full compliance to the government's guidelines
• The process starts off with obtaining a business
license with the intended company name and
business activities, USING A VIETNAMESE
name as one-man limited company
• A legimate business address is required ( TBSS is
able to provide)
• Within 1 week after submission, the license will
be issued
• Another process will kick off for the official legal
representative (Singaporean) to take over the
business
TBSS Registration Process
35
• The legal representative will need to submit
– notarized passport (TBSS will assist)
– residential address (Vietnam or Singapore)
• The process will take about 1 month to
complete
• A legal business entity will be issued
– the business license
– business guidelines
– an official company stamp
• The legal representative will then open a
company bank account
TBSS Registration Process
36

8/18/2017
7
in Vietnam
Maintaining the Business
37
• The business address must be legimate and used
in the official correspondence with DPI or
government/state/province agencies
• It must be provided during the application of
business license
• Companies engaging TBSS office service can use
TBSS address to register and maintain the company
Business Address
38
• Companies are to pay annual/2-year or 3-year
business operating fee to the Government
• with a token to report tax and submit annual report
online
• The business registration fee offered by TBSS
includes an 1-year fee
Maintaining the Business
39
• Major taxes in Vietnam
• corporate income tax
• import and export tax
• value added tax (VAT)
• personal income tax
• in some special areas, there are other taxes
• The corporate income tax is currently at about 22%
• Export tax is 0% unless special cases
• Import tax varies according to tariff
• VAT is mostly at 10%-15%, in some cases 0% or 5%
• Personal Income tax varies according to income
level and is applicable from VND 9,000,000
Tax Liability
40
• Companies are required
• to keep accounting books
• prepare and submit tax reports on monthly,
quarterly and annually
• Foreign companies are also required to have
financial audit taken before the financial year
end
• The financial year in Vietnam is from January to
December and the deadline to submit financial
report is March 30th for the previous year
• Other reports are required to be submitted at
other State agencies
• TBSS provides full compliance tax reporting service
Tax Reporting
41
in Vietnam
Challenges and Real Problems
42

8/18/2017
8
• Singaporeans travel overseas a lot, it is
different when one travels for leisure
• On holiday you likely see what Vietnam has
to offer rather than to hear the problems they
have
• Entreprenuers need to observe and
understand the problems Vietnam markets
face
• Many came to Vietnam and returned with
following comments:
• “we can distribute Vietnam coffee in Singapore”
• “we can open a Singaporean Kopi Thiam here”
• “we can bring Vietnam made garment back to
sell”
• “we can open a prawn mee stall here”
Understanding of Market
43
• Entrepreneurs returned home with a plan to
solve a pain point and build a business
• But, it is very much focused on Singapore, a
market that they are familiar with
• They don’t consider Vietnam market as they
don’t understand how the market works (I
did not know then too)
• I first went to HCMC in 2010
• went back several times to understand the
market
• decided to start businesses with main focus in
my specializations and secondary focuses in
tradings and services
44
• Solving pain points in Singapore market of
5.5 million people isn’t going to be a big
problem to resolve (how many radars can
TBSS install in Singapore, assuming we can
win all?)
• Vietnam has 92 million people, it is a big and
lucrative market (the coastline is about 3000
km, how many times more the number of
radars can we install?)
• The question: what problem can you solve?
45
• Singaporeans are generally kiasi - you can
keep thinking
• It happened to me initially, to start from
afresh
• what if I fail?
• Now, I will say, if you do it, you will not
fail until you give up
Kiasi Mindset
46
• Government processes are slower and
plenty of manual works are still in place
• one can lost patience, we had seen many
foreigners losing their patience
• Language
• unable to communicate if you do not know
Vietnamese - but you can learn
• Thinking models
• northerners are more Beijing while
southerners are more Shanghai
• what about the central people?
Technical Problems
47
in Vietnam
Dealing with Locals
48

8/18/2017
9
• Vietnam War resulted to two distinct groups
• northerners in Hanoi where the government power
is located
• southerners who live in Ho Chi Minh City (HCMC)
• There are cultural differences between the two
• Southerners tend to be more open-minded, pro-
business, and are direct in doing business
• HCMC as a place for startups doing end-customer
services
• Northerners emphasize political connections as a
key strength (given their proximity to the
government seat of power) before engaging in
business
• Hanoi is for startups with political affiliation
Northerners and Southerners
49
• TBSS observations:
• northerners
• better in academics with many more scholars
• habit of saving money (save 9 when made 10)
• more conservative
• southerners
• more dynamic
• more willing to start up
• spend 9 when made 10
Northerners and Southerners
50
• Viet Kieu are the Vietnamese who left
Vietnam during the Vietnam War
• Many are returning after knowing the
country’s current opportunities
• A report showed that an estimated 1.5
million Viet Kieu live in the US alone, with
many more in other countries
• Their return contributed an estimated
USD12.3 billion in remittances in 2015
Viet Kieu
51
• Viet Kieu also bring the entrepreneurial
skills and connections that come with it
• One such example is Sonny Vu, a
Vietnamese-American who founded
MisFit Wearables Corp, which was
acquired by Fossil Group for US$260
million
• Another is Binh Tran, co-founder of
Silicon Valley-based Klout, who now runs
500 Startups’ Vietnam fund
Viet Kieu
52
• Vietnamese nationals who study abroad
have a significant advantage over overseas
Vietnamese in Vietnam
• They understand the culture and the way
of life
• Viet Kieu have a Western mentality trying
to understand an Eastern mentality
• this is a difficult process in terms of building
a Vietnamese team or attacking the
Vietnamese market
• TBSS is Eastern mentality with Western
education, somewhere between Viet Kieu
and overseas educated Vietnamese
Overseas Educated Vietnamese
53
• If you are deployed here by your company,
there is no need to unless it is your interest to
learn
• per highlighted, there are Singaporeans who live in
Vietnam for decades but can't speak or speak on
merely word-by-word Vietnamese
• local staff in large company speak English or
Mandarin
• If you are here to run your own business, it is
largely necessary to learn so as
• to speak to the Government officers
• to instruct your staff
• to communicate to partners/suppliers/contractors
• to understand their communications
• to run errants, purchase materials, ....
Speaking Vietnamese
54

8/18/2017
10
• How did I learn?
• Youtube
https://www.youtube.com/channel/UCdqayK
CVQhmDl2qHZgxsDSw
• Books (with CD)
• Music
• Movies
• Go out to speak
• It is possible to learn Vietnamese from
zero knowledge
Speaking Vietnamese
55
• How did I learn?
• Learn with TBSS
(REVISED)
• One-Time Enrolment:
SGD50.00 (includes
materials - 1 book with
CD and TBSS notes)
• Monthy Subscription Fee
of SGD30.00
• Learn at own pace
• Ad-hoc assistance on
learning issues
• Guided - process
monitored
Speaking Vietnamese
56
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in Vietnam
Industries and Profession Level
to Enter
57
• For large corporations,
• manufacturing, construction, eduations,
agriculture, finance
• Keppel, Mapletree, Capital Land, Sembcorp,
UOB, DBS, ...
• For SME and entreprenuers,
• food and beverage, professional services, IT
services, entertainment, applications
development, small size retail, distribution,
logistic, ...
• Lion City Restaurant, TBSS, ... and many
others
Common Industries
58
• “Why do we need you if we can do the
job?”
• TBSS approach
• do not compete at low level services and
ground level works
• high and advanced technology, sophiscated
system, complex system
• large scale project and engineering services
• expertise-based business
• TBSS
• recognized as a professional, defense system,
large-scale security and surveillance and
radar service and solution provider
Professional Level
59
• Vietnam
• Vietnam Navy, Vietnam
Administration of
Maritime
• Viettel, Elcom, Future
World, FPT
• Bowker Garmen
• Singapore
• DSTA, DSO, PTD
• RSAF, RSN, Army Signal
Institute, SAFAC
• ST, Rohde & Schwarz,
Raytheon Anschütz
• Malaysia
• Transmaris Techno-
Sciences Sdn. Bhd.
Professional Level
• Taiwan
• Coast Guard Command
• ControlIT, 三商電腦股份有
限公司
• Pakistan
• Civil Aviation Authority
• Cambodia
• Bowker Garmen
• Future World
• Denmark
• Terma
• China
• 广东柏高保设备工程有限公
司
• Our customers/end users:
60

8/18/2017
11
in Vietnam
Assistance and Funding
61
Market Readiness Assistance (MRA) grant
• Up to 70% of eligible 3rd-party costs covering
activities such as:
• Overseas market set-up
• Identification of business partners
• Overseas market promotion
• Maximum of 2 applications per fiscal year,
starting 1 April and ending 31 March the
following year
• Limited to one activity (e.g. market entry, or
participation in a trade fair) per application
Government Grants
62
Government Grants
63
• Overseas market set-up
Government Grants
64
• Identification of business partners
Government Grants
65
• Overseas market promotion
Global Company Partnership (GCP) Grant
• Helps companies defray eligible costs of their
overseas expansion projects in capability
building, market access and manpower
development
• engaging a third-party professional
• Office rental and basic salary for up to 2 business
development staff based in the new market for up to
12 months capped at S$100,000 per year
• Basic salary, including employer’s CPF contribution
of nominated Singaporean and PR during the
training period, capped at 6 months
Government Grants
66

8/18/2017
12
Government Grants
67
Global Company Partnership (GCP) Grant • Global HQ anchored in Singapore
• Company annual turnover of less than S$100
million per annum based on the most recent
audited report
• TBSS provides consultancy and services in the
application process such as carrying out market
matching and rental space
• TBSS scouts for reliable and proven partners for
applicants
Government Grants
68
Consultancy
• Consultant’s workflow & support to SMEs when
applying for IE SG grants:
70
Consultancy
• Overseas Business Partner Matching (Identifying
Potential Distributors):
in Vietnam
Sharing - Our Experiences
71
• Ministers' Visits and National Day
Reception
• meet fellow Singaporeans
• meet Vietnamese holding key positions
• PM Lee and Delegates' visit to Vietnam in
March 2017,
• https://www.youtube.com/watch?v=Txp_68T-
G3A
• at 0.51, TBSS was discussing with Mr Baey
Yam Keng on being an entreprenuer in
Vietnam
Interaction
72

8/18/2017
13
Interaction
73
• TBSS is committed to
CSR
• Donated and supported
charity bodies and
Education Institutions in
Vietnam and Singapore
CSR
74
• Do not just talk about
monies, monies, monies, ...
• Raise professional image
• Publish papers
• Attend conferences
• Volunteer in professional
bodies
Professional Image
75

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