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How to ensure effective intercultural communication for doing business in Vietnam

Doing business in Vietnam : develop strong intercultural communication

November 2023

Communication is the key to any project. Indeed, it enables the easy exchange of ideas, laying the foundation for strong relationships and smooth operations. Businesses have plenty of opportunities when they venture into Vietnam’s growing market. However, success mostly relies on effective cross-cultural communication.

In an interview hosted by Zach Herbors for Business Way TV, ALTIOS Vietnam’s Country Coordinator Thuy Minh Giang explores key tips and best practices for successful business interactions in Vietnam.

Overcome Communication Barriers

Communication is greatly influenced by cultural differences. Some words that have neutral meanings in one culture might mean something else in another.

For example, “ambition” or “being ambitious” is viewed differently in Vietnam and Europe. In Europe, ambition is usually positive; it is seen as a trait leading to success and personal fulfillment.

In Vietnam, however, there are two words for ambition, each ones carriying a different meaning. On the one hand, one is positive, like in Europe, while the other suggests competitiveness or even ruthlessness.

Here are some tips understand cultural differences in business:

1. Learn Vietnamese and build personal relationships from scratch

Getting to know people personally makes communication easier and shows a sincere interest in the local culture. Vietnamese partners are more likely to feel at ease and transparent when speaking to you in their mother tongue. Speaking in their native language helps build trust and stronger business relationships.

2. Show Adaptability and Cultural Sensitivity

Effective intercultural communication requires having an open mind and developing cross-cultural awareness, that is to say, being aware of cultural differences. It is important to embrace diversity and recognize that what may be customary in one culture may not hold the same significance in another. By respecting local customs and traditions, you will build credibility and trust.

3. Be clear in your statements

Misunderstandings can happen in any cross-cultural situation. However, in order to minimize it, you should always ask questions and seek clarification. By being proactive, you can prevent potential misinterpretations and develop a transparent and productive working relationship. Clear communication guarantees that everyone’s goals and expectations are in line.

4. Call on a mediator for smooth communication

Sometimes, despite best efforts, there may still be challenges. In this kind of situation, finding a trustworthy mediator can be very helpful. A mediator with expertise in both cultures can assist you in comprehension problems, and help you and your Vietnamese partner communicate effectively. By doing this, you will be sure that both understood messages correctly and that any possible disagreements or inconsistencies are resolved right away.

Three Impacts of Cultural Differences

1. Language barrier

The language barrier can be a real problem, due to the structure of the Vietnamese language. Unlike Latin languages, the Vietnamese language does not use tenses. This fundamental difference in grammar can make it hard to understand nuances.

Also, varying levels of English proficiency among Vietnamese people can also make communication harder. Thus, it requires patience.

2. Working hours

Some Vietnamese people work on weekends. Sometimes, they might send urgent requests or inquiries during this time. This is an aspect of the Vietnamese work culture that you have to take into account, in order to find mutually agreeable solutions when facing these time-sensitive issues.

3. Legal documents

Legal documents are often sent via platforms such as Whatsapp or Zello. While these methods offer convenience and speed, they may not be as secure as conventional methods. Extra precautions are needed to protect sensitive data.

Watch the full interview with Thuy Minh Giang for Business Way TV:

Want to learn more?

If you are interested in reading more articles about doing business in Vietnam, check out our article about how to choose a manufacturing site in Vietnam.

How to choose a manufacturing site in Vietnam

local insight vietnam altios

March 2023

Vietnam ended 2022 with a GDP growth rate of 8%, placing the country at the top World GDP growth rate. With its dynamic economy, and as one of the major ASEAN countries in China + 1 Strategy, the demand for having a manufacturing site in Vietnam has skyrocketed. Now more than ever, companies should seize the opportunity to expand in the country. But how to pick location that meets your business’ needs?

In this article, ALTIOS’ experts will share with you 3 key steps for a mistake-free choice.

1. Secure your manufacturing site in Vietnam's location

This is the key bottleneck for site selection. Many projects were denied after the site check because the government had not approved of the location or park.

In fact, each park has a previously admitted sector list: light and heavy industries can locate in it, as well as sectors whose wastewater reaches National Type B. In other cases, certain parks accept safer industries.

To maximize your and your investor’s time, make sure to secure your business’ location approval and feasibility.

2. Consider these 6 factors for optimal selection

Location:

A well-connected location will become a unique value for a manufacturing site in Vietnam. In fact, the country is divided into 3 main zones: North, Middle, and South, and each one contains different regions with unique advantages. In addition, the presence of possible and future clients, as well as the proximity with local suppliers, also plays a huge role in your factory’s success. Choosing where to set up your business will have a major in pact on its profits.

Manufacturing site legal conditions:

Vietnam has the overall rule for IRC, ERC, environmental, and fire certificates. Certain regions are more preoccupied with investment quality and environmental security, so further documentation may be required, along with evidence for the investors.

These aspects should be well-defined and clarified before the final decision. Moreover, an expert operator can strategically guide the investors to complete processes.
Our international expansion specialists can support you through these crucial steps.

Infrastructure:

Logistics supports:

Every manufacturing site in Vietnam is legally obliged to include:
an internal traffic system, electricity and water systems, a drainage system, a wastewater treatment system, fire prevention and fighting systems, and telecommunications systems.

Since not all locations meet the legal infrastructure standards, ensuring that is the case for your factory will make a huge difference.

Pay close attention to wastewater treatment systems. International investors need good wastewater treatment support to ensure the commitment to the cross-country compliance and ESG values of the global group.

An incidence in a subsidiary can diminish the stock price of the whole group on the Nasdaq or Euronext.

When choosing the right location for your manufacturing site in Vietnam, it is important to consider logistics availability in its varied aspects.

Transportation (road, highway, inland waterway, seaports), high-quality transport supplier–forwarder, as well as the cost for the distance between the different locations.

Abunding with logistical options can positively impact your business’ adaptability to variation.

Keep in mind that the logistics cost in Vietnam is still higher than neighbor countries Thailand and Singapore. For this reason, a fine decision needs to be made to insure an optimal cost

Human resources:

Nowadays, general workers have a fluctuating supply in Vietnam. In some periods, it’s very easy to hire. Sometimes, it’s extremely rare to find general workers. Finding a location that can provide
a stable supply of workforce
is important if your business needs
a high quantity of workers.

As for hiring skilled workers, it is another story. Skilled workers’ availability depends on the current businesses on the site and the existing training and formation in the region. Some training is rare in Vietnam, like die-casting or dyeing. Some training is only concentrated in big cities like IT, and finance.

A good scan of human resources availability needs to be made before choosing your manufacturing site in Vietnam to facilitate recruitment in the future.

Facilities for staff relocation:

When developing abroad, numerous businesses relocate experts and managers from other countries. To ensure international standard lifestyles, the new factory must be well connected to a modern city with international education and healthcare systems.

A prior scan before the final decision can help not only in location selection but also in cost estimation.

3. Build your Business Plan

A check of your manufacturing site in Vietnam will give you many details, including land price, legal consultancy cost for the administrative procedure, current local salary, relocation costs, etc. With this information, the investors can estimate the P&L project.

In many cases, land price is much higher in an adequate location than it is in a less appropriate one, in addition to the logistics costs.
In other cases, every other condition is good, but the lack of international facilities limits the foreign expert relocation.

An optimal decision always needs local insights, that’s the reason why third-party consultation does a great contribution to the expansion’s success.
Reach out to one our experts for more information.

Want to learn more?

If you are interested setting up in Vietnam, read our article How to ensure effective interultural communication for doing business in Vietnam

Altios, accompanied by Polish Investment & Trade Agency, organized a webinar on Vietnam as a destination for Polish companies.

April 2022

Click on the link below to watch the replay of this webinar: https://attendee.gotowebinar.com/recording/8899476124282310150


Vietnam has become a new attractive destination for global investors. Despite the pandemic hard hit, Vietnam finished its 2021 with a 2.58% GDP growth and around 31 B USD of Foreign Direct Investment.

What are Vietnam’s strengths? How can it attract international investors? How to work with Vietnamese partners? Which are critical points for doing business in Vietnam?

The webinar took place on March 17th, 2022 from 9:00 to 10:00 a.m.