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More foreign firms set up headquarters
More foreign companies are locating their Southeast Asian headquarters in Viet Nam, said the Ministry of Industry and Trade in a new report on foreign direct investment in 2009.
| Seminar hails benefits of franchising
Singaporean consultant Johanna Ho has advised Vietnamese entrepreneurs to become franchisees rather than invest in start-ups, saying franchises involve less risk.
Speaking at the Franchise Viet Nam 2010 seminar in HCM City yesterday, Ho, who works for Astreem Corporation Pte Ltd, explained that owning a proven brand and operating a business supported by an experienced group would benefit Vietnamese investors. A company starting up by itself needed a long time to build brands, she said.
Le Ngoc Trung of the Ministry of Industry and Trade said since Viet Nam was an open market with fierce competition among companies, investors should strengthen ties with foreign businesses or take up franchises to improve their competitiveness.
Vietnamese companies too would benefit from franchising out their brands, he said.
At the seminar, 10 Singaporean firms in the food, beverage, and lifestyle industries – including Pasta Mania, Polar Puffs, 3-Monkeys Cafe, Worldwide Wings, and TTQMassage – introduced their brands. | "This trend makes Viet Nam more prestigious in the international arena but requires strict management from local authorities to cope with trade fraud and losses in corporate income tax collections," the ministry wrote.
Distribution was the hot segment, with 169 projects granted licences last year, the report said. Of the total, 41 were new projects while 128 were existing projects seeking to add distribution to their licensed business activities. Of these, 26 were seeking authorisation to distribute consumer goods while the remainder sought to distribute machinery, equipment and raw materials for production.
Most of the foreign enterprises seeking licences in the distribution sector came from elsewhere in Asia, including Taiwan, Japan, South Korea, mainland China and Singapore.
However, twenty-five foreign firms from the US, Canada, the UK, Italy and Singapore also sought licences for franchises in such fields as food service, clothing retail and information technology. A number of these companies also established domestic enterprises to support distribution and domestic management of the franchises.
The Viet Nam Franchise Association has predicted earnings in the franchise sector would continue increase rapidly, reaching US$36 million this year.
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