Doing business in Asia

Today I found this in my inbox. A brief description of someone wanted to do business in Asia. It doesn't even matter what country this is about:

I have applied for an investment license at the One Stop Unit in March
2009. I have still got no answer. The process is lengthy, complicated
and completely in-transparent. In reality, investors buy themselves to their licenses. I didn't pay, so I didn't get the license.

After all I have given up to make business here. If you are not
ruthless, you will only burn your fingers.

As someone who believe that business is driving development, this story shows the real problem of developing countries: It's not so much poverty or lack of education (though this is a huge problem, but not the cause). It is a lack of desire from governments. Desire in developing the country. Most governments in SE Asia are just fine with the situation, since their members already made enough money for themselves.

Let's see a developing country as a start-up business. The way they do it now is the way start up operated in the time of the first internet bubble. VC (in our example NGO and IMF and Worldbank) gave money, they burned it and asked for more money. Because there was a steady stream of new money coming in, there was no real reason to focus in the business model. That's the way developing countries operate: The infrastructure of the country is not financed by income from operations like taxes, but from donations and support from international institutions. The lack of taxes used to run the country is caused by a) lack of tax collecting processes and b) corruption.
So why aren't countries collecting taxes? Actually they do, but the system is far from transparent. First of all, foreign companies are due to tax, always. Local family businesses have to pay tax as well, but seldom do. The reason is: They won't get caught, and tax officers always think its too much work for them to collect the few dollars from small businesses. Then of course is a total lack of infrastructure and understandable tax laws. The reason is simply again the missing desire. If you want to get tax, you will establish a system.

The main reason why there is no system is corruption. This is all over Asia, and it's the biggest obstacle for the developing countries. Corruption kills competition and kills development of markets. Only the wealthy elite can afford to pay the bribes, so they run moist of the businesses and get a de facto monopoly. Without competition there is no incentive to grow and improve, so most businesses aren't developing much. Just look at state owned Hotels in Asia, or the quality of local run companies in general. Most use quite old equipment, producing same products since 10 years.

Why its important to have foreign companies?
Because they drive markets faster on a higher level. The know the process of competition and they know also they have to work harder then local companies (not only because of corruption, but also because cultural differences, lack of networks in the country a.s.o.) Successful foreign owned companies are a challenge for local companies, so the they have a quite good reason to improve and get the business.

But as long as the desire of the people in charge is their own bank account and not the countries wealth, there is no change at all.

Business Visa to Vietnam only for three months? Work permits easier?

The Word is running a story about new visa regulations.

Based on an article published in on Thanh Nien’s website in July, it seems there is more to the problems people are now facing with visa renewal than was at first thought.


According to Ho Chi Minh City’s police department, there are presently 50,000 foreigners residing in the city. Of these, say the labour authorities, only 14,500 have work permits. As a result, writes Thanh Nien, “Labour authorities are seeking stricter measures to curb the rising number of foreign workers working in the city illegally.”

Such measures may include requiring “foreign workers to acquire a labour permit before entering Vietnam. The body also said immigration agencies should not be allowed to extend visas for foreigners working in the country without the permit.”

It seems that without a certain permission from the immigration authorities you will only get a three months business visa extended. The website http://www.vietnam-visa.com/ is also only offering 1 and 3 months visa.

Anyone any more information about that issue? I am also got some information from tha Word that for a work permit:

you now no longer need a police report from your home country if you have been residing in a city or province of Vietnam for six months or more. Instead, you need to apply for a background check from the local So tu phap (Department of Justice). In addition, providing you can prove you have been working in your field of expertise for over five years, then a university degree is unnecessary. However, it remains desirable.

Share, share, share!!!

When I was at the Webwednesday in Saigon, I was listening to a speech by Bryan Pelz. He is the founder of Vinagame, number one in internetwebsites in Vietnam. In his brief presentation he pointed out that the biggest obstacle in Vietnam is the lack of education. And in business language spoken a lack of cooperation. To develop the market companies must cooperate, to educate customers, to evolve business.

and that's the problem: Vietnam has still ap problem with sharing information. That's why there is no innovation coming from here, that's why they need foreign help in nearly every sector. If you sit on your information and keep it, that you will never know if it's right or wrong and how to do things better. If others don't share you will never get a new idea. And so Vietnam still sticks with coffee, rice and fish (and Nike shoes) as export goods.
The recent web events I joined (except the Webwednesday) are transforming from open geek meetings into beer driven small talks with nothing to learn. In opposite, joining a 2 hours afternoon meeting in Phnom Penh last month brought me a lot of ideas and contacts.

In a world, where are no secrets anymore, just information you don't know yet, it's kind of stupid to hide your ideas. Together with openness in import rules thats the biggest challenge for Vietnam: Transforming into a member of the new global business order.