DEVELOP CLOSE TIES WITH LOCAL AUTHORITIES, BANKERS IN VIETNAM, BUSINESSMEN TOLD

KUALA LUMPUR, Oct 11 (Bernama) -- Malaysian businessmen need to develop
close ties with the local authorities and bankers in Vietnam to speed up the
registration of their businesses to avoid any difficulty or complexity that may
arise.

Director of consulting firm, Finex Co Ltd, Betty Lim, said the businessmen
needed to also observe the business practices in Vietnam to ensure a smooth
ride.

She said it was practical to enter the market as a fully-owned foreign
enterprise to gain better control of the business and direction.

"It is also wise to understand how the business operates there first," she
said at a seminar on "Doing Business in Vietnam" here Monday.

Lim said besides obtaining company seal and licence from the Department of
Planning Investment, a foreign enterprise also needed to register for tax code
at the municipal taxation department and make public annoucements of its
existence in daily newspapers.

"The companies will also have to buy pre-printed value-added tax invoices
from the Municipal Tax Department as these invoices will be needed for any
transactions with suppliers and customers," she said.

She said the human resources procedures needed to be registered with the
labour office and the employees with the social insurance fund for the payment
of health insurance.

"It is also crucial for foreign enterprise to register its human resource
policy in Vietnamese as this procedure is sometimes overlooked and the
consequences are that foreign companies could be fined when the local
authorities conduct an audit on the respective foreign companies," she said.

Lim said despite the many legal issues and practices which could get very
complicated, Vietnam, an emerging economy, offered vast potentials.

"Vietnam gets the support of developed countries such as US, France and
Japan. Compared to China, there are less competition in the market," she said.

She said Vietnam offered various incentives such as tax reductions,
sponsored training to upgrade unskilled engineers and preferential loan at lower
than market interest rates.

"However, there are various challenges that foreign businesses will have to
face like control on currency repatriations and the need to establish local
distributors," she said.

Finex Co Ltd has two offices in Vietnam -- Hanoi and Ho Chi Minh city.

-- BERNAMA