![]() |
City Guide - Ho Chi Minh City - Business | ||
![]() |
||
Business Ho Chi Minh City was at the spearhead of Vietnam's economic growth, when the government introduced a market economy at the end of the 1980s - following years of stagnation under a centrally planned economic system that crippled agriculture and industry. The city looked to the Asian 'tiger' markets, such as Japan, South Korea, Thailand and Taiwan, to find willing investors and, for the first time, exports began to take over imports. Multinational businesses from Europe, Australia and elsewhere in Asia recognised the advantages of a cheap but hardworking workforce and organisations, such as Coca-Cola, opened factories close to the city. Joint ventures with other countries have been very successful, particularly within the hotel industry, where names such as Sofitel and Novotel from France are very well established. Many international service organisations, such as banks (Standard Chartered), legal firms (Deacons) and accountants (Arthur Andersen), established offices in the city to take advantage of the fledgling economy. Most of these are based in District 1 of the city. Manufacturing and consumer companies, such as Unilever, are located on the outskirts of the city in the industrial zones of Bien Hoa, Long Binh and Amata. With a steady annual economic growth of around 8% and low inflation, the economy was given a further boost in 1995 when Vietnam became a member of ASEAN (Association of South East Asian Nations), as well as established diplomatic relations with the United States. When other Asian economies went into free-fall in 1997, the knock-on effect was felt in Vietnam, particularly in Ho Chi Minh City, which had benefited most from investment from Asian countries. Contracts were cancelled and projects put on hold, such as oil exploration by Texaco, Total and Shell. Although the city and country has not suffered as much as some of the other Asian economies, it has been a period of reassessment and multinational companies who were planning to invest are now looking elsewhere. The crisis has added to the problems of setting up in Vietnam, in particular the rampant corruption and lengthy bureaucracy. The advantages of a hardworking and well-educated workforce have been outweighed by the fact that it is now easier and cheaper to invest in Thailand or Indonesia. The consequence is that the unemployment rate in Ho Chi Minh City is around 7.4%, close to the national average of 7.04%. The government is now addressing its problems by allowing 100% foreign-owned enterprises in most sectors, reduced utility and telecommunication charges for companies and the provision for paying wages in Vietnamese Dong rather than US Dollars. Business Etiquette Most senior businesspeople in large and international companies will speak English, but it is not common in smaller companies. It is essential to make appointments for business meetings and to exchange business cards. Business cards should be offered and received with both hands. Vietnamese hosts are quite likely to present their guests with gifts, such as lacquerware, so visitors take along a gift typical to their own area of residence in order to reciprocate. Vietnamese businesspeople are generally quite formal so protracted niceties are inevitable before you can get down to business. Also, it is important to realise that the Vietnamese never like to say no to any request, so arrangements and contracts should be checked and rechecked. Long lunch breaks are a legacy from the French so visitors should not schedule appointments between 1130 and 1400, unless invited to lunch. Generally, offices open early between 0730 and 0800 and close around 1700 or 1800. Many offices are also open on Saturdays but this has changed recently with the introduction of a five-day week. Vietnamese businesspeople are gradually becoming more formal in their dress, as contact with international business increases. However, because of the extreme heat it is quite acceptable, and practical, to dispense with the wearing of a suit jacket. |