Starting a company often takes many months, during which time the company is inactive and requires tens or hundreds of thousands of dollars in capital investment, often before understanding the business, financial, and consumer landscape or local culture.
Such fixed entry strategies can lead to mistakes such as: choosing the wrong pricing model, launching the wrong initial product or service line, establishing the wrong location, pursuing the wrong business model Mistake or choose the wrong business partner or supplier to cooperate. .
Instead, a new market entry model called Global Staffing Solutions (GSS) allows foreign investors to do business in Vietnam without establishing a legal entity, at least in the short term. .
Global Staffing Solutions is a go-to-market strategy that relieves businesses of the stress of establishing a corporate entity and offloads the burden of day-to-day management of employee payroll and tax compliance of that organization to a local company. This frees up important resources for the foreign company to explore its options in a new or unfamiliar market.
Simply put, the way GSS works is that it allows businesses to get their feet on the ground without having to set up a local base.
This service operates with a third-party service provider that contracts separately with both – the foreign company and the foreign employee.
This means that while the day-to-day working and control employee relationship still exists between the foreign company and those being outsourced, the local service provider in Vietnam will handle all the Actual risk mitigation, compliance, pay and benefits measures.
Under the GSS service, foreign companies can enjoy the benefits of hiring full-time employees to work in foreign markets and comply with local laws without the need to spend time and investment to establish themselves. and operate a legal entity abroad.
Specifically, it can bring the following benefits to businesses:
GSS allows foreign companies to hire full-time local employees before establishing the company in the target country. Although local employees are paid by a local third-party company, they actually work for the foreign company. In this way, local staff can conduct preliminary business research for the foreign company and test the local market.
Through GSS, foreign companies can easily hire employees at reasonable local salaries, avoiding unnecessary costs due to lack of understanding of local salary standards and wrong estimates of human resource budgets.
It also provides an opportunity for foreign investors to vet local people and assess their suitability for hiring on a long-term local basis or identify additional skills that the company’s “first” employee will have. company needs to deliver results domestically.
Due to the employment relationship between employees and local suppliers, the HR team can assist the foreign employer in calculating salaries, social insurance contributions, personal income tax (PIT) declaration and reimbursements to their local employees. GSS services free the foreign company from daily management and human resources work so that the company can focus on its business activities.
Under the GSS strategy, local suppliers can ensure that their foreign employees comply with Vietnamese laws and regulations at all times, and proactively assist in obtaining visas and work permits for employees. abroad, set up a bank account as well as declare personal income tax in Vietnam.
This has the added benefit of minimizing many of the legal and practical issues that arise when payments are made to an employee’s overseas private bank account. With the GSS structure in place, foreign employees can transfer money directly from the local company in Vietnam to their local bank account in Vietnam.
Finally, the legal team in Vietnam can also assist in establishing and defining labor contracts with employees according to local labor laws.
Foreign companies can terminate local working relationships at limited cost if there is a mismatch in skills or expectations. Likewise, they can easily scale their HR solution if the working relationship proves successful.
Source: vietnam-briefing
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