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Copyright © 1999-2013  Vietnam Venture Group, Inc. All rights reserved.   Written May 1, 1999; updated January 1, 2005

Expert's: business & investment advisors & consultants
Who are they? Who needs them?

By Peter N. Sheridan


The "experts" to be careful of are not always foreign to Vietnam.

However, this article focuses on the foreigners.  They include Overseas Vietnamese (called "Vietkieu" in the language of Vietnam), citizens of regional countries in Asia, Europeans and Americans. Some live in Vietnam. Many are occasional visitors. They sell their services to the unwary and create a lot of resentment to doing business in Vietnam. They write of their experiences and instruct others how to accomplish what they are unwilling, or not able, to complete themselves.

Foreign investors are heard to complain that Vietnam is a "sink-hole" into which money must be poured. "Where is the place that every investor can leave with a million dollars in his pocket?" starts the outdated joke.   "Vietnam, after you bring in two million and leave before the year is out."

Even Gary Trudeau wrote of Vietnam in Doonsbury in those terms:

Boopsie - So what’s your friend doing in Vietnam?

BD - Well, he’s involved in some sort of joint venture. Apparently you can’t really do business there unless you have a Vietnamese partner. Basically the arrangement is you pour in a lot of money and your partner secures all the necessary permits.

Boopsie - Permits to do what?

BD - To pour in more money. It sort of reminds me of the war….

The "experts" say they have been to Vietnam for (an) extensive period(s). They claim to come here every month or two.  How often do you fly half-way around the world and still feel comfortable to conduct business during the next few days.  A short trip will still take at least a week.  Recovery and turn-around time makes that ten days.  How many successful business people have ten days out of every 30 to travel to Vietnam?

The "experts" claim they visit Vietnam "many, many" times. Question them hard. Ask to look at their passports. Go ahead.  You will pay them a small fortune if you hire them. They are not shy about their boast.  Why should you be shy to call them on their bluff? 

Not Quite. It is our experience that such experts actually go to Vietnam for short stays, at most one month, usually once or  twice a year.  Many travel here less and stay for shorter periods. One man who annoyed me with his bragging eventually admitted he'd only been to Vietnam twice in the past three years.  He stayed no longer than a week each time.  

Gary Trudeau was here for less than two weeks.  He's been writing his tales for several years.

Ask for references. They say they know "everybody." Usually they claim the ability to "get you to see the Prime Minister."   You want the names, dates AND contact numbers of the past two people they got "in" to visit.  Pay attention to why THAT information is privileged.

As for the name, dates and contact numbers of the two most recently satisfied customers and listen closely to why that information is privileged.

"Experts" speak of the need to "be flexible" in payments as the "true Asian" way of doing business. Ask the "expert" to provide you with a chart of organization of the industry, ministry and approval authorities necessary for making the decision you are keen to receive. Don’t be surprised when they do not draw a meaningful chart, if they even attempt one.

Do not be surprised to hear their excuse why they can not or will not. If a chart of organization is supplied, it will have tens of names. Don’t be afraid to ask which among them will receive the payment and make the decision in your favor.

Don't be afraid to ask, because you WILL NOT make any such payment. It is illegal to make such payments not only in your home country.   It is also illegal in Vietnam.

HANOI, June 30, 1996 (Reuters) - Vietnam's Communist Party Secretary General Do Muoi said on Sunday corruption would be rooted out and that no matter who the offenders were they would be severely punished -- even with the death penalty.

"I think this is a kind of disease of government," Muoi told reporters during a break in the ruling party's landmark congress. "This is a disease that can only be cured by the people."

"They (the offenders) will be severely punished, even being shot dead...no matter what position the people hold," he added.

Conviction of misappropriating State property (giving or accepting a bribe) in Vietnam as of May 1997 of as little as US$ 450 is now punishable by a mandatory imprisonment of not less than two years. Life imprisonment or a sentence of death can apply to those who steal more than US$ 45,000.

Don’t be fooled. The so-called experts offer to prove their contact-making ability by making appointments at the deputy-minister-level authority. Sometimes they even arrange "deep-discount deluxe" hotel rooms.

You can make your own appointments. If you have the name and address of the official you wish to see, write to him or her by mail or fax. You will spend a long time on the phone, and you may become frustrated from making so many overseas calls. But that is the way the "experts" get the appointments.

The hotel industry is presently suffering from over-capacity, yet more large hotels are a-building. Rack rates are down by as much as 50% or more.   Most expat or Vietkieu businesses are given an automatic 25% further discount for all room referrals. If your "expert" offers you less than 50% off rack rates, ask him/her who is keeping the balance. Be more aware: "Deluxe" is the designation for the cheapest rooms in most of the new hotels in Vietnam.

Experts who claim substantial business success in Vietnam need to be asked about their prior experience that has given them their ability to achieve such success. Be critical in your inquiry, and wear rubber soled shoes. The floor may get hard to walk on with the slippery answers they will offer.

One senior "expert" claims to have been in a "high political connection" with the Diem regime! Diem is the guy who banned dancing in the south while his sister-in-law (called the Dragon Lady) rivaled Imelda Marcos shopping for shoes. When Diem was assassinated in 1963, the now senior "expert" was only 27. In a land that has always revered "age as equal to wisdom," don’t fail to ask that "expert" to name the exact "high political position" he held 34 years before. You should not be surprised if his recent experience is equally void of solid, international transactional or political success.

Some of these "experts" were among the first foreigners to enter Vietnam after 1975. Others have been ideological supporters of the "communist" movement and growth of Vietnam since before 1975. Don’t fail to ask these "experts" how their own international, transactional business skills were honed in the economic and political vacuum that existed in all of Vietnam from the 1940s (when the Japanese invaded Vietnam stopping major French development, until 1992 when private, foreign investment began to first blossom.

 

Our backgrounds at VVG include decades of Fortune "100" corporate experience as senior management and legal service providers. We have a combined staff experience of more than 100 years in direct work with the people of Vietnam.

We have lived and worked in Vietnam since January 1994. The US embargo was lifted in February 1994. We have decades of international, transactional business experience to include buying and selling companies, technology transfers, contract negotiations and drafting.

We have decades of experience in business and political work in America, Asia and Europe. Our principals are recognized business and legal leaders in the regions of America and Asia. Our founder, Peter N. Sheridan, is listed in Who’s Who In American Law,  Who’s Who in the Asian Pacific Rim, and Who's Who in Vietnam. His is an active member of the Board of Governors of the American Chamber of Commerce in HCMC, and chair of its Government Relations Committee. We have the credentials others only claim are theirs.

We have met all the people you need to know. However, we are able to easily make your appointments for no more significant reasons than (i) we have their names and current contact numbers, and (ii) we are local and can follow-up as is often needed with a personal, preliminary visit.

We will work with you to take the mystery out of doing business in Vietnam. We will help you understand both the chart of organization and the path of decision making in your industry here.

Unlike the cartoonist and similarly skilled "experts," we know that foreign investors can successfully conduct business without a Vietnamese partner. We can cost-effectively guide the committed investor to making an informed and researched decision.

Establishing any business is time consuming and expensive. We are information providers with significant experience in forming and sustaining businesses in Vietnam. We can help you establish your business here.

 

As you seek to make the decision to invest or not, and then obtain a return on your investment, please do not abandon your conservative, strong business principals. Do NOT listen to sharp talkers who tell you with false authority that "doing Vietnamese business is just different." That has not been our experience. It need not be yours.

This is a dynamic, developing nation. While it is a very poor country with weak infrastructure, Vietnam has a very high potential. Success here requires both patience and an understanding of the vast cultural differences. It is a good place to get into an emerging market.  Even in the current (2nd quarter 1999) climate of regional economic problems, the IMF forecasts a conservative yet impressive 5% growth in GDP for 1999.

Regional Downturn. Some raise concern that Vietnam may be severely challenged to meet those goals in the face of downturns in some neighboring lands. Others point out the relative isolation and the internal stability of the government of Vietnam may have insulated it from a similar fate. Similar to China, the Vietnamese currency is not freely traded in the world market, and its value is strictly controlled by the State.  Unlike China, Vietnam has no stock market yet, and has thus avoided completely that problem. 

Exports to the South East Asian region constitute 60% to 70% of all Vietnam's current exports.  As such, Vietnam's products are not competitive with the products of nations that have suffered an unwilling reduction in the value of their currencies.   However, by not permitting a gross down turn in its currency, Vietnam keeps the cost of imported goods, and the cost to service foreign debt, substantially lower than its troubled neighbors.

Foreign investments in Vietnam have taken a down-turn.  Hotel and office building occupancy is down, and rates charged are expected to remain in decline, particularly in the high-density areas of Hanoi and Ho Chi Minh City.  Tourism will suffer from lower-valued, neighboring competition in Malaysia,  Indonesia and Thailand. 

However, headlines in the International Herald Tribune tell an old and not well-kept secret:  "Rich Taiwan Sees Bargains All Around."  Datelined Taipei, the January 22, 1998 front-page article describes a "Go-South" program:

In a major policy move with long term implications for the region, Taiwan businesses are fanning out through the hardest-hit countries of Asia, hoping to take advantage of the current crisis by buying up assets at fire-sale prices.

Time will tell if the estimates of overall gross domestic investment through year 2000, will be met.

Vietnam's Economic Outlook Seems Brighter. Interestingly, the per capita GDP in Saigon for 1998 exceeds $1,100 (General Department of Statistics).  Forecast average inflation in 1999 is at or below 10% annualized.

Widening trade deficits were forecast, with imports continuing to grow faster than exports. But the deficit declined from $4.4 billion in 1996 to $2.0 billion in 1998.   This happened in spite of higher volume exports for less value.

The main expansion in Vietnam is expected to be in intermediate and capital goods. Some industries, such as sugar processing, may soon be foreclosed to foreign investors.   Investors seeking 100% foreign owned forestry enterprises were foreclosed in January 1998.

The government is indeed stable. Three senior leaders were recently retired in the space of less than one year.  The current leaders show every indication of continuing the process of business and government renovation.  There are potential glitches to be aware of, but what land is free from them? 

Discover that Vietnam has a favorable economic and political climate to explore, and then make an investment decision. The literacy rate exceeds 92% of the 78 million population.  While "only" twenty percent of the population lives in the urban areas, that is a population mass of 15.6 million, larger than most European nations.  The average age is about 25 and the minimum wage is at a range of from $35 to $45 per month.  Almost every person we know still goes to school, most in the evenings, and many on Sundays.  The people are loyal, dedicated, and hard working. Importantly, they are friendly to overseas investors and visitors.

Come to Vietnam to see for yourself.   Pay cautious attention to which "expert" you rely upon, however.


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