ICHAM Members will receive a $100 Discount for a 3-Day Ticket And $50 Discount for a 1-Day Ticket Visit the conference website for more information
IN THIS ISSUE News
Italian Food and Wine 2017 (IFWS)
17 How to Draft Vietnamese
HR Tech Asia 2017 Conference &
Probation Contracts That
Will Reduce Your Turnover
Vietnam-Italy Trade Promotion Seminar
Meeting of Dong Thap People's Committee with EuroCham
Business Thursday: Allâ€™italiana
10 HOMI September 2017: Focus on the Lifestyle
19 3PL Networks in Vietnam: How to Engage Partners to Boost Sales
Italian Food and Wine 2017 (IFWS)
delegation of Vietnamese Buyers in F&B sector joined the second edition of the event â€œItalian Food and Wine (IFWS)â€?, which took place this year on 11th and 12th July at Suntech Singapore. The event is organized by the Italian Chamber of Commerce in Singapore, in collaboration with other Italian Chambers of Commerce in Asia. This time, the delegation led by ICHAM Vietnam consisted of 4 companies: Wine Plaza, Net Vang, Nier Fine Wine and An Nam Gourmet. Participating in this project, Italian food and wine SMEs have a chance to meet Business to Business with various Buyers coming from Singapore, Malaysia,
the Philippines,Indonesia, Cambodian, Vietnam, Thailand, Hong Kong, China and Australia. These Buyers are importers, distributors and prestigious restaurants which will help promote wine and food products "Made in Italy" in their own market.
HR Tech Asia 2017 Conference & Expo The Conference & Expo on HR tech ASIA was held successfully at Gem Center, HCMC on August 18th. The speech was held by thought leaders, technology leaders, business and HR experts coming from different Asian countries. During Plenary session, the speakers focused on the issue of whether technology can uberize Human Resources, decreasing the diversity, increasing the inclusion in the work place, as well as optimizing the workload and process of Human Resources. Another important point was about new HR Teach solutions in these times, including SaaS, Platforms on Cloud or Onpremise Software. The speakers also highlighted Data Analytics, which might play a key role in helping HR leaders make better informed decisions and improve work performance. They focused on the question of how other
companies in the world are leveraging analytics to do HR functions and on how managers use HR. Last but not least, there was a discussion between experts from different enterprises about how to approach HR technology, solutions to HR and technology adoption. This year, as a media partner, the Italian Chamber of Commerce in Vietnam (ICHAM) continues to give its contribution to promotional activities for the event.
Vietnam-Italy Trade Promotion Seminar Two seminars on Vietnam â€“ Italy Trade Promotion were successfully held in Hanoi (Movenpick Hotel) on 25th July and in HCMC (Nikko Saigon Hotel) on 27th July. The event was organized by the Italian Chamber of Commerce in Vietnam (ICHAM) and the Italian Foreign Trade Association (AICE). It aimed to provide the latest insight of business opportunities, consumption trends in Italy and import - export procedures between Vietnam and Italy.
commercial contracts with Italian counterparts in particular and European counterparts in general. Some information was highlighted which could be interesting for enterprises of both sides such as current Italyâ€™s main export sectors (luxury and textile, chemical goods, food, car engine and design); the key imported goods from Vietnam to Italy (coffee, cacao, chestnut and fish) and the tariff elimination for 99% of all tariff lines for Vietnam due to EVFTA which is coming into force by 2018.
The seminar gave an overview of potential business opportunities for the two countries and current consumption trends in Italy. The speakers also explained the structural and cultural differences between Vietnam and Italy, illustrating which are the most common mistakes when a Vietnamese company drafts
The two seminars attracted over 130 participants, including enterprises operating in the field of import - export, business associations and journalists. The event welcomed the honorable presence of the Italian Vice Ambassador to Vietnam â€“ Ms Natalia Sanginiti (in Hanoi) and the Deputy Consul General of Italy - Mr. Roberto Cajati (in HCMC).
Meeting of Dong Thap People's Committee with EuroCham On the 18th August, The Dong Thap Peoples’ Committee held a meeting with EuroCham’s board about investment opportunities in Dong Thap which in the past years stands as one of top cities in the Provincial Competitiveness Index (PCI). They also briefed about the investment forum in Dong Thap which will take place in November 2017 . One of the main focus of the conference were the key areas for investments: in order t¬¬o increase import/ export with Europe, agriculture and food processing in the Agriculture needs to be reinforced, as well as tourism, ecotourism (Tram Chim, etc.) and real estate projects. Water purification for use and water management are also to be planned. To pursue these goals, Dong Thap needs EU investments and ODA. So far there are 18 FDI projects in Dong Thap; For HR & Training, the province has 1 university, 3 vocational training schools and each district has its own schools. The committee underlines the importace of adopting new climate change and prevention/protection measures, since Dong Thap province is affected by a decrease of water level during summer and autumn in which people need to channel the water from 2 main
rivers to the land to provide water for daily use and agriculture production. They have reported to the government the request for ODA for provision of clean water for rural areas and Sadec. EU companies are called to come now to survey before deciding to invest and to sign MOU. For those who inteds to invest, IRCS will be issued during the conference for inauguration of 2 bridges completition, chaired by Vietnamese Prime Minister Nguyen Xuan Phuc and Prime Minister of Australia . EuroCham will support this venture by connecting with with BAs, SCs (FAASC, Tourism and Green Growth) and Vietwater Delegation to organize 1-2 day excursion to Dong Thap between 11-12 November. It will also help to promote the activity to the members by posting details on the website; moreover as there is a boom of dutch experts supporting SMEs, EuroCham will ask the Dutch Business Association to support Dong Thap as well . During the meeting some representatives of Eurocham’s sector committee and other European Chambers of Commerce, included ICHAM, were interested in investment opportunities in Dong Thap.
Business Thursday: All’italiana On 14th September, the Italian edition of Business Thursday was hosted by the Italian Chamber of Commerce in Vietnam (ICHAM), attracting many business guests coming from Vietnamese and foreign companies. This is also the first networking event held by the Chamber in Hanoi. The event created an authentic networking atmosphere “in the Italian style” for the guests to enjoy, accompanied by particular Italian food and drinks. “Lucky Draws”, as always, was the most awaited part of the event, in which the guests could a lot of interesting prizes, including one round trip to Italy. Business Thursday takes place on the second Thursday of the month and is jointly organized by eight different business associations: - British Business Group in Vietnam (BBGV)
- Central and Eastern European Chamber of Commerce in Vietnam (CEEC)
- Eurocham Vietnam (EUROCHAM) - French Chamber of Commerce and Industry in Vietnam (CCIFV) - German Business Association in Vietnam (GBA) - Indian Business Chamber Vietnam (Incham) - Italian Chamber of Commerce in Vietnam (Icham) - Singaporean Business Association Vietnam (SBAV)
On this occasion, ICHAM would like to send sincere thanks to all sponsors for their precious contribution to the success of the event: Turkish Airline, Sir Tailor, S.K.International Joint Stock Company, Pan pacific, Red Apron, Piaggio, Maserati, Redwood, House of Barbaard, Gelato and Saporo.
HOMI September 2017: Focus on the Lifestyle
ollowing the success of the first edition of HOMI 2017, the second edition took place from 15 September to 18 September 2017, continuing to promote new trends towards objects for the home and accessories for individuals. This edition of HOMI focused on the tables and aesthetics of new home furnishings, which are always more functional and in line with the lifestyle, where barriers are overcome and technology leads the way while keeping an eye on tradition. Taking place twice a year at RHO Fiera Milano, HOMI is a trade fair dedicated to lifestyle and new trends for the home with a focus on the latest trends and habits: from tableware to decorations, from furniture to fabrics, environmental fragrances, jewelery, accessories as well as products and ideas designed to improve the lifestyle of the youngsters. Additionally, there are numerous workshops, conferences, research labs and talk shows which are either a highly informative moment for the industry players and visitors, or an opportunity to meet up and exchange views and ideas. HOMI Hosted Buyers is one of the projects for which ICHAM has been working as local coordinator for Fiera Milano. Seven Vietnamese companies were chosen to join this edition of HOMI: Family Care, Bel Decor, Maison Decor, Remix Deco, AC Design&Furnishing, Mai Viet and Nha Xinh group. This is a huge opportunity for Vietnamese companies to develop their business, finding new product lines and looking for potential partners through B2B meetings with Italian and international representatives.
Dear Members & Friends, We are pleased to inform you of the following upcoming events co-hosted or supported by ICHAM.
HO CHI MINH CITY
Talent Management Vietnam 2017
HO CHI MINH CITY
Vietnam Solar Energy Summit 2017
8th Asian Pacific Mediation Forum conference in Vietnam
HO CHI MINH CITY
Global Hotels & Resorts
(*) The aforementioned dates of the event may be the commencement day as some events may take place over the course of more than one day. Please have a look at our website for more information.
SIR Tailor, with 2 boutiques in Saigon and Hanoi, is a growing Vietnamese tailor house that strongly promote Italian styles of suits and jackets. With the aim to create bespoke garments suitable for tropical weather, SIR attaches special importance to the comfort and the usage of different fabric types. The house of SIR Tailor inherits the quintessence of the sartorial world that is carefully adapted for Vietnamese market with local craftsmanship. When there are thousands of choices, style gets blurred, and then most tailors choose to outsource their production, customer service and even basic cutting. This potentially leads to the fact that most products look alike (remaining just a few or even no distinguishing feature among different garments) and the requests for a custom-tailored suit are hard to be made. SIR Tailor sets itself apart by putting all the processes from productions, operations to customer service inside the same building. All SIR Tailor’s products and services are made, controlled and delivered by us and us only. All materials for the production of SIR are imported from foreign countries, mostly from Italy, guaranteeing the best quality ever. Earlier this month, SIR got a chance to participate in a wonderful networking event held by ICHAM – the Italian Chamber of Commerce in Vietnam. As SIR Tailor always looks forward to reaching out and expanding its network with groups and corporations, these kinds of events are great opportunities for SIR to create new partnerships. Showing our appreciation and strengthening our relationship with ICHAM, we offer to all ICHAM members a discount of 10% on all bespoke and RTW products (not including VAT & not in conjunction with any other SIR promotions or packages). We hope to welcome many of you at SIR Tailor in the near future.
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How to Draft Vietnamese Probation Contracts That Will Reduce Your Turnover By Dezan Shira & Associates Finding the right workers can be a difficult task in any market, Vietnam being no exception. Fortunately, prior to entering into a binding labor contract in Vietnam, probationary periods provide both the employer and the employee an opportunity to assess their relationship. With minimized compliance, reduced compensation requirements, and fewer restrictions surrounding termination, probation contracts are an invaluable asset allowing foreign investors to safeguard their operations and reduce turnover.
ed by a probation contract arrangement. Given the shifting position of Vietnam in the value chain, many sectors are susceptible to turnover. At present, IT, professional business services, and managerial positions in manufacturing are all in high demand and thus experience heightened levels of churn. Employers in all sectors, however, should be sure to assess the Vietnamese labor market and to implement probationary contracting if needed.
Who should use probationary contracts? Companies seeking to employ workers in high-skilled positions stand to gain most from use of probation contracts as a first step to prior to standard labor contracting. Not only are the skills for these jobs more subjective and difficult to assess within an interview, wage premiums attached to skilled labor in Vietnam can ex-
acerbate the risks of onboarding of unqualified or unsuited candidates. Generally speaking, the higher the salary of a potential employee, the greater value is add-
How do probationary contracts differ from standard labor contracts? Under the prevailing labor code of 2012, probation contracts are provided as a separate agreement to a standard labor contract. As such, probationary contracts are subject to a reduced list of information and documentation requirements. The specifics of these
requirements can be found above in the chart below outlining the differences in contract structuring:
18 While separated from a legal standpoint, probation contracts can be issued in conjunction with a standard labor contract which will enter into force upon the successful completion of the probation contract. To tie the two agreements legally, clauses within the probationary contract may specify the continuation of a working relationship through a standard labor contract following the successful conclusion of the probation contract. This approach is popular in practice as it allows employers to effectively negotiate with potential candidates prior to the probation stage. Alternatively, it is also possible to incentivize performance over the period of probation by inserting clauses within the probation contract which offer employment but leave salary and benefits negotiations until after the probation period. What length of probation is permitted? Probationary periods permitted for a given position are proportional to the education required for the position and range from six days to 60 days. These contracts are limited to a one-time usage and must be converted to a standard contract of one year or more if both parties wish to continue the relationship beyond the period specified in the probation contract. Existing probationary contract lengths specified under Vietnamese employment law include: 60 days: probationary periods of up to 60 sixty days are reserved for positions that require professional or technical skills that demand a collegiate education or
higher. 30 days: probation periods of up to 30 days may be applied for jobs that require a professional skill set, technical qualifications, some of which may require some degree of education to obtain. 06 days: For all other employment in Vietnam, including most manual labor and manufacturing, probation is limited to six days. The distinction between the 30 and 60 day probationary periods is subject to clarification at the circular level and should be monitored closely when drafting contracts. As a matter of compliance, pursuant to Circular No. 05/2015/NÄ?-CP, companies will be required to notify those undergoing 30 and 60 day probationary periods of their results three days prior to the conclusion of the probation contract. How much do employers have to pay employees under probation contracts? Compensation for probationary employment is subject to the agreement set out by the parties involved and must be stipulated in the agreement negotiated by the employer and employee. While there is considerable latitude with regard to the amount of compensation that is to be provided for probationary employment, employers are obligated to provide compensation no lower than 85 percent of the going wage applied to the position for which the probation is in preparation.
About Us Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com. Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
By Dezan Shira & Associates Vietnam is a significant target for companies in the consumer goods sector. The country’s blossoming middle class, shifting spending habits, and a sizable population of over 90 million is rapidly becoming the focal point for investors building up brand identity and sales networks throughout the Association of Southeast Asian Nations (ASEAN). As the fundamentals of the Vietnamese economy continue to fall into place, foreign companies who are able to develop and implement effective market-entry strategies will be well positioned to gain increasing market share in the years to come. For the largest players, Vietnam’s demographics and proximity to other markets present an opportunity to establish localized production and to expand distribution networks through mergers and acquisitions. Small and medium sized players, however, for whom the costs of setting up can often be inhibitive, increasingly turn to third-party logistics providers to boost their sales and build brand identity within Vietnam. In general terms, third-party logistics, or 3PL as it is commonly referred, involves the outsourcing of logistics functions – such as customs clearance, storage of products, and order fulfillment – to a third party. Depending on the 3PL provider and range of services utilized, third party logistics can completely remove the need for a foreign company to establish a market presence in Vietnam. Instead, all operations can be run out of a single regional management center where the costs and risks of doing business are lower.
etnam. For those unfamiliar with the third party logistics industry, the following lists common 3PL services in Vietnam ordered in terms of their rates of usage by foreign investors currently engaging 3PL providers.
Domestic transportation – 92% International transportation – 89% Warehousing – 70% Customs clearance – 68% Forwarding – 60% Shipment consolidation – 40% Product labeling/packaging – 33% Transportation management – 25% Reverse logistics – 25% Cross-docking – 25% Freight auditing and payment – 18% Fleet management – 15% Order entry, processing, and fulfillment – 12% Which companies will benefit from 3PL services? The decision to engage a 3PL provider and the exact services required by a company will ultimately ride on the findings of a cost-benefit comparison between the acquisition of physical assets to facilitate distribution and the engagement of a local 3PL provider to handle these tasks. While each company will differ in terms of its products and business strategy, 3PL providers are generally of greatest utility to mid-market players seeking to explore the Vietnamese market for the first time.
What types of third party logistics services are available in Vietnam? Particularly for those with low headcounts, the re3PL providers can offer a variety of services to com- sources needed to fully commit to the Vietnamese panies seeking to outsource logistics functions in Vi- market may make market entry a daunting task. In
20 these cases, the low-profile approach provided through 3PL allows companies the flexibility to build up name recognition and sales while temporarily avoiding the capital-intensive process of establishing a foreign-owned trading company.
How to structure 3PL networks to boost sales? Companies must choose a corporate structure that reflects their desired level of involvement in Vietnam. Below, we outline two of the most common low-cost 3PL entry strategies â€“ selling into the Vietnamese market without a legal entity and outsourcing order fulfillment while maintaining a representative office to facilitate sales. Both of these options perfectly suit SMEs seeking to explore opportunities and expand sales networks within the Vietnamese market.
Option 1 â€“ Fully outsourcing operations Companies with existing Vietnamese customers can often utilize 3PL providers to handle the entire logistics process and remove the need to maintain a physical presence in the county entirely. Under this structure, 3PL providers import goods on behalf of the foreign company, handle the customs process, store goods for the company within Vietnam, and fulfill orders on behalf of the company throughout the country.
goods within Vietnam. This is a particularly good option for companies which have managed to effectively market their goods to large buyers on a wholesale level and therefore do not desire to further expand their networks within Vietnam.
Option 2 â€“ Order fulfillment support An increasingly common structure involves the establishment of a Representative Office (RO) to supplement the services of 3PL providers with sales and marketing support. ROs provide a much lower investment profile compared to establishing a 100 percent foreign owned entity (100% FOE) and allow investors to minimize financial exposure while maintaining direct connections with 3PL providers and customers. ROs are faced with lower capital requirements and setup times and are not subject to corporate income tax as they are prevented from directly invoicing clients.
Under current Vietnamese law, ROs are limited to hiring staff to conduct marketing and market research activities and are not permitted to revive incoming payments. While preventing investors from billing their clients within Vietnam, the RO structure does allow foreign companies to maintain a sales team within the Vietnamese market while outsourcing the import and distribution of goods to a 3PL proFor firms with concerns over establishing a physical vider. Compared to the costs associated with 100 presence in Vietnam, fully outsourcing operations to FOE setup and the lack of on the ground presence a 3PL provider may be a good first step towards bestemming from a fully outsourced distribution operacoming more comfortable with the Vietnamese martion, supplementation of 3PL services with RO sales ket. However, it is also important to point out that the support is currently the preferred method of entry for range of services provided by the 3PL, in this case, SMEs. will likely come at a significant service fee. Furthermore, it may be difficult to maintain and expand rela- The role of regional management tionships with current and future customers without a While Vietnam continues to provide among the most more significant on the ground presence. attractive consumer markets regionally, it is far from As such, distribution under a fully outsourced model the only market where opportunities lie. Increasingly, is only recommended for companies confident in companies choose to target not one but many martheir ability to fill orders in the near to medium term kets in Southeast Asia for expansion simultaneously. and require an immediate solution to distribute their In these cases, it often makes sense to establish a
21 regional management center in Asia from which to base operations. This center will be able to handle the contractual relationships with 3PL providers – an area beyond the legal scope of representative office operations – and to handle the invoicing of clients in some cases.
market find that it is more effective to engage with separate 3PL providers in different locations within the country to ensure that they are able to provide the most effective delivery to their clients in every location.
At present Singapore is the best-positioned location from which to base operations due to its extensive trade and tax agreements covering Vietnam, other ASEAN members, as well as many of home markets for Vietnam’s current investors such as China, the United States, the European Union, Japan, and Korea.
Storage and transport capacity
The importance of evaluating 3PL providers Finally, following the selection of a market entry method, investors must select a 3PL provider that can effectively support their agenda in Vietnam. While 3PL firms are in ample supply, these partners will take on a significant degree of control over the storage and transport of a company’s goods. As such, there is potential for the quality of goods and service provided by the 3PL to influence the reputation of a good or brand, particularly in the initial stages of a company’ entry into Vietnam.
In addition to geographic coverage, it is important to select a 3PL provider that has the capacity and specialization to transport the goods that a company wishes to distribute in Vietnam. For frozen goods and other items requiring the use of cold chain logistics networks, specialized transportation equipment and storage will certainly be required. In these cases, vetting 3PL providers prior to engagement will ensure that they are able to are able to provide the storage and transport specifications to meet the standards of a given product.
Range of service lines
More generally, companies should review 3PL providers to select a firm that can provide the services needed to implement their market entry strategy. This will include assessing firms based on their ability to invoice clients, clear goods through customs, or conduct other aspects of logistics outsourcing required for a given operation. Each firm will likely With this in mind, the following are some of the most have different services and a be able to provide a important considerations for new entrants to Vidifferent range of services depending on the part of etnam to consider when selecting a 3PL provider: the country that they are operating in.
Due diligence Finally, due diligence on 3PL providers is the most important consideration from a brand reputation Consumption centers in Vietnam are spread across perspective. Given the opaque nature of Vietnam’s the country. Ranging from Ho Chi Minh City in the business environment, investors often struggle to assess the reputation of 3PL providers from outside South, to Da Nang in the Center, and Hanoi in the North, it is important for investors to understand con- of the country. This, along with ongoing coordination with clients often forms the basis for investors sumption trends within their respective business decisions to set up a representative office to further lines and to engage a 3PL provider that can store expand their operations in Vietnam. and possibly transport goods between these targeted locations effectively. Many firms entering the
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Some highlights: - Vietnam-Italy Trade Promotion Seminar - Business Thursday: All’italiana - HOMI September 2017: Focus on the Lifestyle
Published on Oct 6, 2017
Some highlights: - Vietnam-Italy Trade Promotion Seminar - Business Thursday: All’italiana - HOMI September 2017: Focus on the Lifestyle