Running a business in a communist country

The evidence, as best as I can read it, suggests that for any given culture and level of education, the greater the freedom to compete and the stronger the rule of law, the greater the material wealth produced. – Alan Greenspan, The Age of Turbulence

In his book, Greenspan emphasizes the importance of deregulation and argues that the economy works best when people have the freedom to make their own financial decisions. 

It’s pretty true in Vietnam. I’ve been working here for 4 months now, and this is what I’ve learned so far:

You need permits and licenses for just about everything

You need a permit to hold an event. If it includes a musical performance, then you have to invite a government official to a full rehearsal a few days before the event. After he sees the entire program he will then make a decision whether or not to give you the permit. You also need a permission to sell tickets (i.e. pay extra tax on the numbers of tickets sold) and a separate license to be able to advertise your event. All of which involves lobbying. 

Corruption with a capital C

Corruption is everywhere. But it’s not as visible and as welcome as it is here. People readily expect to be bribed to do their job. This includes the police officers, the firemen, the customs officers, the cleaning staff… And the owners of the biggest indoor stadium in Ho Chi Minh City.  You cannot get anything done without money.

People don’t Google

Due to the heavily regulated media, much of what’s going on overseas isn’t being translated and not a lot of people speak English. Despite Google’s successful presence in Vietnam, any new proven concept still has to come with a ton of instructions. And so every business has to educate its customers. E.g. The biggest ticketing company in Vietnam provides instructions on their home page on how to buy a ticket. Event organizers have to explain where to buy a ticket in much greater detail & banks have to explain how to use a credit card. According to Reuters, 20 percent of Vietnam’s population of 87 million have a bank account.

You can skip steps

This is a great “side effect” actually. Due to the stagnation caused by heavy regulation, you don’t have to learn through trial and error as much. Some other developed country has done that for you and so you can just apply what has worked in other markets to your business.

*I wrote this post in 2014 while running Comic Con