Almost every country in the world has regulations for the amount of foreign currency and exchange transactions people living in the state have to abide by.
Vietnam has also controlled the amount of foreign currency that can be sent from within the country to other states. As a general rule, these transactions are required to take place in the local currency, that is, the Vietnamese Dong (VND).
The country also regulates gold, and the main state-controlled financial institution, the State Bank, regulates the foreign exchange transactions.
The country has commercial banks that are given the license to buy and sell foreign currency with private individuals.
Foreign Currency And Businesses
Foreign invested enterprises in the country usually have the ability to send their profits back, and make outgoing remittances in order to acquire materials and supplies.
Other aspects that can also be undertaken using this method include providing services, transferring technology, making payments of wages and other expenses, and paying off loans in other countries, which have to be registered with the State Bank.
Repatriation of capital and profits is also allowed when a business winds up its operations in the country.
As with many developing countries, the State Bank provides certain criteria according to which the exchange rate for US Dollar to Vietnamese Dong conversions take place, with market fundamentals also playing a part.
Major Challenges For Businesses In Vietnam
Alongside the rates for foreign exchange in Vietnam – Globaleye Vietnam being regulated by the State Bank on an average weighted basis, companies or private individuals looking to initiate ventures in the country will do well to also educate themselves on the major challenged posed by the regulatory environment.
The first of these has to do with the barriers to starting a business, which are many.
All of these conditions to start a business make it difficult for new organizations to take hold.
Startups in the country generally have to get approval from the police, announce the establishment in a newspaper, and undertake about half a dozen more tasks before kicking off.
The second element has to do with the taxation environment in the country, which is rigorous to say the least. Corporations have to make over 30 different tax payments every year, which takes hundreds of hours of labor to finish.
In contrast with advanced countries, this number on average can be four times as high, making not only taxation levels, but also the work that goes into making them, very troublesome.
Another important challenge is getting permits to establish physical premises.
Unless your business is moving into a facility that already exists, there are more than ten hoops that you will have to jump through, and come into contact with several official agencies, before your building(s) are given the go ahead.