With the growing global cooperation in business, Vietnam has also been in the forefront to improve its social-economics legal frameworks. This has been undertaken in the country with the understanding that business legal frameworks are imperative in luring local and international investments. In order to create an environment that is conducive for players in the world of business, the country has been trying to improve its systems accordingly and in compliance with the World Trade Organization’s rules.
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Running a bakery in the country will not be very difficult since the raw materials are readily available. In terms of business ownership, the country’s constitution was amended and now the new civil code permits individual ownership. One of the most important regulatory frameworks which are of significance to us is the application of special sales tax. Taxation has a direct impact on profits and production costs and this has to be scrutinized effectively before launching the bakery. As per the current regulations with regard to taxation, the charges on single business units are a bit friendly.
Due to the nature of our product which is categorized as food, we may enjoy the exception of taxation while in transit. The law provides a tax free policy for foods while on transit in the country and this can be our major advantage especially when the need for expansion arises. When our bakery will have grown in the country we might consider expanding our sales to the neighboring countries using Vietnam as the headquarters in the region. With this ambition, it important to understand the exportation terms of business. The duty rates on imports in the country are classified in three different categories. These categories include the preferential rates, the special preferential rates, and the standard rates. A Certificate of Origin is required for imports to be classified as preferential or special preferential status.
The government expects business to calculate, declare and pay their tax dues without any supervision. The food industry is politically infiltrated and a sour relationship between us and the political elite can cause problems. Acquiring a license to conduct a bakery business in the country is one of the biggest challenges. However, once one has license, things get better. Nonetheless, political instability in the country has been the major inhibiter of fair trading terms. The politicians in Vietnam compose trading laws without considerations of the traders. As a matter of fact, these laws are composed without consulting the stakeholders.
Nonetheless, the country also has a legal framework that aims at protecting the food production industry. There are very high standards of cleanliness and health measures that have been emphasized in the country. Contravening the health conditions placed in the industry can lead to loss of one’s license and in other cases it can attract a jail term. Regulations on the quality of food products in Vietnam are very strict.
Our target market is the upcoming middle class in the country. Due to the economic advancements in Vietnam, an emerging middle class population will be a good market for the business. Our product will include snacks and sweet cakes which are very marketable in the country. Bread and other wheat products are good for business in the country. In addition, the market is not yet crowded currently and this is an advantage for our bakery to establish a stronghold in the market.