Vietnam - Due DiligenceVietnam - Due Diligence
Any firm establishing a new business venture in Vietnam should develop business relationships in a positive, but cautious manner. It is imperative that relationship building include adequate due diligence prior to entering contracts or other commercial arrangements: check the bona fides of every business, be it agent or customer or consultant, before entering a business arrangement. One straightforward way to check the quality of a business and its management is to request a list of supplier or customer references. Law firms, accounting firms, and professional due diligence companies like Dun & Bradstreet are also in the market.
One of the most challenging aspects of developing partnerships in Vietnam is verifying the financial bona fides of prospective partners. As noted elsewhere, relatively few firms in Vietnam are audited to international standards. This situation is improving as joint-stock companies submit to more rigorous audits with a view to listing on Vietnam's young, but growing, stock exchange, and as the business sector recognizes the importance of transparency. Private firms may prefer not to disclose assets and funding sources (let alone liabilities), while information on State Owned Enterprises may be considered sensitive by the authorities.
Commercial credit information services in Vietnam are very limited. Until recently, the Credit Information Center, operating under the State Bank of Vietnam (SBV), has been the only credit information resource in Vietnam. Vietnam’s existing public credit registry collects information on large loans from banks, but does not have the resources to cover smaller SMEs, consumer loans, and other credit providers. Faced with such challenges, many foreign parties request international law firms with a presence in country to investigate prospective local partners.
In 2008, the government issued a license to Vietnam WorldVest Base (WVB) Financial Intelligence Services Co. Ltd., allowing it to provide credit rating services on Vietnamese companies. Additional information may be obtained from databases of leading English language periodicals such as the Viet Nam News, the Vietnam Investment Review, and Vietnam Economic Times. These sources may be helpful in determining whether negative information on a company has been published.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
One of the most challenging aspects of developing partnerships in Vietnam is verifying the financial bona fides of prospective partners. As noted elsewhere, relatively few firms in Vietnam are audited to international standards. This situation is improving as joint-stock companies submit to more rigorous audits with a view to listing on Vietnam's young, but growing, stock exchange, and as the business sector recognizes the importance of transparency. Private firms may prefer not to disclose assets and funding sources (let alone liabilities), while information on State Owned Enterprises may be considered sensitive by the authorities.
Commercial credit information services in Vietnam are very limited. Until recently, the Credit Information Center, operating under the State Bank of Vietnam (SBV), has been the only credit information resource in Vietnam. Vietnam’s existing public credit registry collects information on large loans from banks, but does not have the resources to cover smaller SMEs, consumer loans, and other credit providers. Faced with such challenges, many foreign parties request international law firms with a presence in country to investigate prospective local partners.
In 2008, the government issued a license to Vietnam WorldVest Base (WVB) Financial Intelligence Services Co. Ltd., allowing it to provide credit rating services on Vietnamese companies. Additional information may be obtained from databases of leading English language periodicals such as the Viet Nam News, the Vietnam Investment Review, and Vietnam Economic Times. These sources may be helpful in determining whether negative information on a company has been published.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.