CM May 2020

COUNTRY FOCUS
In business meetings,
silence may suggest
trouble
Silence is golden
Part Two: Vietnam
ONE of the reasons that
Vietnam has risen higher
in the World Bank’s ease
of doing business ratings
is because the government
has been reforming what
was once a complicated tax system. It’s of
note that the Tax Department has issued
regulations that have helped created
favourable conditions for businesses.
The country has also moved into the 21st
century when it comes to tax reporting
and electronic tax declarations were fully
implemented late 2017.
Income tax rates follow seven bands,
based on income, and range from five
percent (up to five million Vietnamese
dong (VND)) to 35 percent (more than 80mn
VND). On top of that are the usual taxes
on business income (one- to five-percent),
interest and dividends (five percent), sale of
real estate (two percent) and inheritances/
gifts/prizes (ten percent) and more. A good
advisor is essential given the remaining
complexities.
It’s quite telling that despite the advent
of modern payment methods Vietnam
is still one of the most cash-dependent
economies in the world; more than 90
percent of all domestic transactions are
done in cash as there is a lack of ATMs
and trustworthy cashless systems. As The
Travel Brief wrote: “While credit cards are
accepted in many places in major cities like
Hanoi and Ho Chi Minh City, you will still
have a lot of trouble getting around without
enough cash in hand.”
The matter isn’t helped by Vietnamese
who feel distrustful of corrupt local banks.
As such, many Vietnamese businesses
use wire transfers to send funds. Fintech
Singapore reported in January 2017 that the
government planned to make the country
cashless by 2020. The goal is to provide
the infrastructure for such a system while
increasing the fees on cash payments,
and decreasing fees related to electronic
payments.
INTELLECTUAL PROPERTY
Intellectual property rights are key for
any business and while Vietnam, like
other nations, offers protections, the
enforcement of the law is very weak, and
abuse remains a problem. The government
is taking steps to address the problem, and
has introduced new legislation to protect
IP rights, including copyright, industrial
property and plant varieties.
It’s important to recognise that home
IP protections will not apply in Vietnam.
Foreign companies that want to register
their intellectual ownership should file
an application with the National Office
of Industrial Property of Vietnam via an
“While credit cards are
accepted in many places
in major cities like Hanoi
and Ho Chi Minh City,
you will still have a lot
of trouble getting around
without enough cash in
hand.”
authorised agent. The Copyright Office
of Vietnam (COV) administers copyright
protection law. Although copyright
can be protected in Vietnam without
any registration requirement, formal
recordation of copyright at the COV is
recommended.
Vietnam is a part of the Patent
Cooperation Treaty and the Madrid
Agreement Concerning the International
Registration of Marks. Patent and trademark
applicants may use these international
systems for filing international patent
and trademark applications for requesting
protection in Vietnam.
OTHER MATTERS TO NOTE
Despite reform in the country, corruption
is still widespread in Vietnam and anyone
doing business in the country is likely to
encounter it or hear of it at some point.
However, the Vietnamese government
is fighting the problem and its Anti-
Corruption Law 2005 is considered by the
World Bank to be among the best anticorruption
legal frameworks in Asia.
BUSINESS CULTURE
Vietnamese remains the dominant language
and the Vietnamese appreciate foreigners
trying simple phrases. A handshake and a
slight bow of the head is given when saying
hello and goodbye.
Deals are rarely completed in a
few encounters and person to person
conversations are preferred over online
communication and emails. Cold calling is
not recommended.
When giving or receiving business cards,
do so with both hands and the card should
be read; anything otherwise is deemed
offensive; business cards ought to have
both English and Vietnamese translations.
Seniority and hierarchy are important
in Vietnam, so giving the eldest person
respect by giving them a business card first
is appropriate.
Similarly, documents should be
translated into Vietnamese and agendas
before meetings are welcomed. Silence
means contemplation and interruptions
are considered rude. Further, silence may
be used when someone disagrees.
Saying ‘yes’ may merely indicate
understanding, rather than actual
agreement so it’s best to follow up and
confirm with a business partner to
understand if a deal has actually been
agreed.
Vietnamese will ask questions that may
seem personal to a foreigner – discussing
family and personal life is normal and
is seen as a sign of friendliness and
interest. Lastly, as with many other Asian
countries, a person’s reputation, dignity,
and prestige – ‘face’ – is very important
and unintentionally causing a loss of face
due to their words or actions should be
avoided… suggestions or challenges should
be dealt with in private.
Adam Bernstein is a freelance business
writer.
Advancing the credit profession / www.cicm.com / May 2020 / PAGE 35