Sabadell International Business
Exporting to Vietnam
Opportunities for Spanish companies in Vietnam
It has displayed a spectacular capacity for economic change.
- Very young population base: 50% aged under 30 years.
- Declining rural sector, while industrial and services sectors continue to grow.
- Income per capita growing quickly.
- Rich in natural resources.
- Appropriate position to face up to external payment obligations
- Vietnam has a sustained growth of 6%.
- State companies have too much importance. A major reform and privatisation plan is pending.
- Continuing work is needed in reforming the banking sector
- Public indebtedness is being contained in the medium term.
- Opportunities related to infrastructures, industrial supplies, chemical and consumer products, tourism and catering.
- Right to transfer and repatriate sums in currency.
- Incentives for foreign investment and restrictions in some sectors.
- There are special economic zones and industrial duty-free zones.
- The Free Trade Agreement between the EU and Vietnam is still to be ratified by the EU. This is the most ambitious agreement of the EU with a developing country.
- The development potential of this country continues to be excellent.
Banco Sabadell in Vietnam
Our relationship with the Vietnamese banking system dates back to 1991- 92, when Banco Sabadell became the first Spanish bank to establish banking relations with the Vietcombank.
One of the first European buyer-credit agreements was signed with this. Over the the years, a sound relationship has been developed with a wide range of local banks, thus covering the needs of Spanish exporters.
The proximity of Banco Sabadell’s regional office in Singapore, with a presence in the country since 1990, has enabled intense collaboration to be developed on this market with public and private agents from Vietnam.
Banco Sabadell in Singapore has also reinforced its capacity for advising companies, investors, importers and exporters.
- Quality personalised service meant for Spanish companies
- Financial and commercial advice on the market.
- Monitoring operations, projects and tenders
Business structure in Vietnam
Incorporating a foreign company
Representative Office / Liaison Office
Can only work in the interests of the company or its subsidiaries. Not allowed to do business nor perform transactions entailing income.
Only applicable for certain very specific cases; the parent company takes on all the obligations of the subsidiary. More complicated to run than a limited company or corporation.
Incorporating a Vietnamese company
Vietnamese laws and commercial regulations follow on in the French tradition, which is similar to the Spanish legal system.
Limited liability company
- Single-person company.
- Multi-person (from 2 to 50 partners): This is the most common type of firm for investments of 100% foreign capital and for joint ventures with a majority of foreign capital. It has one restriction: decisions must be adopted with a minimum quorum of 65% of the structured capital. This is a very common form for the development of businesses that require a local partner in Vietnam.
- Joint stock company: requires at least three partners and it offers advantages for the control of the company with fewer requirements as regards the quorum of subscribed capital. This is the ideal form for joint ventures with a shareholding of less than 65% of the capital.
Can rely on the decisive support of the World Bank and Asian Development Bank (ADB)
Means of payment in Vietnam
Exports to Vietnam
- Documentary Credit:
means the seller has the security of collecting payment prior to shipping the goods. Option of financing for the Vietnamese payer (importer).
collection management of commercial documents with the purchaser by a local bank, usually with sight draft or payment.
- Guarantees for advance payment:
performance bonds, deposits and also for regular transactions or capital goods.
Imports from Vietnam
- Documentary Credit:
banking payment commitment conditional on submitting documents accrediting the export.
- Import remittance:
collection management of payment documents with the purchaser by the Spanish bank.
includes the category of surety up to 12 months to cover regular purchasing periods .
International negotiation protocol in Vietnam
- The Vietnamese are very proud of their country and their modern historical past must be taken into account.
- It is essential to know who to establish a relationship with, and to keep regular visits and follow-ups with them.
- Offer a technical after-sales service of a high level (especially for exporters of equipment and machinery, industrial supplies, etc.).
- Flexible and dynamic negotiations.
- It is important to have a local agent.