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Major features of companies in Vietnam

Major features of companies in Vietnam

Friday 26, 03 2021
In general, companies in Vietnam are lacking in several factors that make successful companies. In addition, they are suffering from discrimination, inequality and encouragement for fair competition

Forms of ownership

There are four main forms of ownership: State, collective, private and mixed.

Legal forms

Companies in Vietnam are formed according to the Law on Business and related legal documents. These are very important legal tools for determining legal status to regulate the behavior of enterprises in general, and at the same time, determine the role of the State for companies in Vietnam.

Legal forms

Another important thing that the law affirms and guarantees the rights and interests of companies is that the State implements a series of incentive policies to encourage domestic and foreign investment, such as allocating or leasing land, building infrastructure of industrial zones, setting up and encouraging investment support funds to provide medium and long-term investment loans, capital contribution ...

Fields of operation

Companies in Vietnam mainly operate in the service and trade industry. In the field of manufacturing, processing and transport (construction, industrial, agriculture, forestry, trade, service), companies are normally located in townships and urban centers.

Technology and market

Most enterprises have very low financial capacity with outdated technology and equipment. In addition, employees often lack of skills and experience. Most of the products are consumed in the domestic market while the quality of the product is poor. However, there are a few enterprises operating in the field of processing agricultural, forestry and seafood products with high export value.

Technology and market

Management qualifications

The management capability of companies in Vietnam is relatively limited while workers are not well-trained. Moreover, most businesses operate independently.

According to Mr. Tran Dinh Thien, former director of the Vietnam Institute of Economics, during more than 30 years of economic reform, companies in Vietnam have gone through two stages of development with two opposite trends.

Management qualifications

From 1986 to 2006, the number of new businesses increased dramatically. It seems that any who was able to grasp the opportunity could change their life and quickly become a billionaire. State administration was also very easygoing. As a result, since 2007, the number of "gone" businesses has reached several hundred thousand.

Not being well prepared for a big game, according to Thien, is the explanation for why Vietnam is still a developing country.

Lack of everything

Regarding the evaluation criteria of corporate strength, Mr. Thien pointed out 6 identifying characteristics of companies in Vietnam and business owners.

Lack of business knowledge foundation and modern business knowledge is the first characteristic. And, this is the result of an unethical startup process, Mr. Thien admitted.

The second characteristic pointed out by the former director is the lack of proper corporate spirit.

The third characteristic is the lack of proper positioning of their functions and real values in the

Lack of everything

Lack of long-term strategic vision is the fourth characteristic.

Next, Mr. Thien said that Vietnamese businessmen are newbies in the global market but are not eager to learn from intellectuals and international experiences. They are lacking in confidence and competitive bravery.

The sixth characteristic pointed out by Mr. Thien is that companies in Vietnam are suffering from discrimination, inequality and lack of encouragement for fair competition.

There should be another reform

If they are not willing to change, it is difficult for companies in Vietnam to go far, and “win” in the fierce global development competition in today's era.

Following the above conclusion, Mr. Thien said that it is necessary to rethink the way to develop businesses. That means to set up again.

Mr. Thien also admits that this is not an easy job, because companies have to overcome the habit of "getting rich easily", to give up short-term thinking, to stop doing business in a “snatching” way that has become a normal way of thinking and behavouring.

This also means starting over, which is not easy. However, Mr. Thien thinks that "nothing is impossible", especially when the number of newly established and registered enterprises has still been higher than the number of enterprises that have to close down over the past difficult time.

VietnamCredit

 

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